Good morning, everyone, and thank you for joining Bentley Systems Q4 2021 Operating Results and 2022 Outlook Webcast. I'm Carey Mann, Bentley's VP of Investor Relations. On the webcast today, we have Bentley Systems Chief Executive Officer, Greg Bentley; Chief Financial Officer, Werner Andre; Chief Operating Officer, Nicholas Cumins; and Chief Investment Officer, David Hollister. This webcast includes forward-looking statements made as of March 1, 2022 regarding the future results of operation and financial position, business strategy and plans and objectives for future operations of Bentley Systems, Incorporated. All such statements made in or contained during this webcast, other than statements of historical fact are forward-looking statements. This webcast will be available for replay on Bentley Systems Investor Relations website at investors.bentley.com. After our presentation, we will conclude with Q&A. And with that, let me introduce the CEO of Bentley Systems, Greg Bentley.

Hello. As we reflect on our first full year as a public company, I feel that our business is now running at full capacity after overcoming pandemic interruptions. Both our company and our users have adapted to a new normal. I am confident that the interest in digital solutions and infrastructure engineering will persist post-pandemic, driven by the need for infrastructure renewal and resilience, which is placing more demands on our clients while they struggle to expand their workforce. The pandemic has also accelerated the development of digital twins in infrastructure, enhancing our market reach. Since going public, we have made significant strides in our market execution, both with existing enterprise clients and new small and medium-sized business (SMB) prospects. Additionally, we have made strategic acquisitions to better align with global demands for mobility, environmental sustainability, and energy grid advancements. Our business discussions have highlighted the ongoing challenges in capital projects within the industrial resources sector, contrasting with the strong momentum we have seen in public utilities infrastructure. Fortunately, we can report this quarter that there have been no significant changes by sector. Our EPC clients have not yet increased their application usage but have stopped declining, and we anticipate benefits as rising energy prices lead to new capital expenditures, including in renewables and energy storage. Starting with our 2022 operating results, we plan to provide more detailed insights into our revenue segments, particularly separating our resources sector from the traditional industrial infrastructure sector. Furthermore, we are seeing significant growth opportunities in renewable energy with our Seequent offerings, particularly driven by the ongoing digital transformation in the mining industry due to energy transition demands. To assess our business performance, we track our subscription growth and net retention rates. Our annual recurring revenue (ARR) growth metrics have shown improvement, while the net revenue retention (NRR) naturally lags behind our ARR growth due to the time required for new customer names to contribute. We experienced a dip in ARR growth beginning in Q1 2020 due to project halts and work capacity issues, but this decline has been followed by subsequent growth as users returned to full operations. I believe that the lagging NRR will increase as users continue to upgrade their applications. Our application usage and ARR growth have been bolstered by users switching to more specialized applications, providing them with greater productivity and value. I am pleased to report that our application mix accretion has improved from 2.5% in 2020 to over 3.5% in 2021, which directly contributes to our increased ARR growth. This improvement is attributed to our user success teams enhancing our relationships with clients and encouraging them to leverage our more specialized applications. Expanding our reach and supporting existing clients through our E365 program has proven beneficial as we see higher application mix accretion among E365 accounts compared to non-E365 accounts. Overall, our data suggests that our enterprise accounts are responding positively to our enhanced offerings, with potential for further growth, especially in the SMB market, where we see promising opportunities that we are actively targeting. Market research indicates there is a significant number of infrastructure engineering professionals in SMBs, particularly in our key markets like the US and UK. This insight reinforces our strategy to focus on the SMB segment, and we have redirected cost savings from the pandemic into initiatives aimed at this market. The trend in our Virtuosity subscriptions, which combine software licenses with expert support for SMBs, reflects our growing success in this area, with new business growth for these accounts now representing 41% of our overall new business growth in 2021, indicating substantial potential for future growth. Now, for more insights on our go-to-market activities and product leadership for 2022, I will turn it over to Nicholas.

Thank you, Greg. We have data to product portfolio overview in the 10-K report to reflect the important product advancements we made in 2021. We continue to build on that foundation and extend the comprehensiveness of our product portfolio. In particular, engineering applications with our modeling and simulation products for engineering practitioners; enterprise systems for engineering collaboration, construction, and asset performance supporting digital workflows across the entire infrastructure lifecycle; geo-professional applications with the combination of Seequent, original Bentley geotechnical products, and sub-Seequent acquisitions for the subsurface; industry solutions with industry-specific capabilities to advance infrastructure for mobility, environment, and grids. And at the center of our portfolio, iTwin, our infrastructure digital twin platform powering an increasing number of Bentley and third-party products. I would like to highlight the performance of SYNCHRO in Q4 and throughout 2021. SYNCHRO is our construction management solution, which we have extended to be uniquely suited for heavy civil projects. As you might recall from Greg's comments during the Q3 operating results, with SYNCHRO we are taking a distinct approach to construction, where some of our peers are focusing on automating 2D workflows, our focus for SYNCHRO is on helping the industry advance to 4D by leveraging digital twins. The industry has validated our approach with accelerated growth in 2021 across the spectrum of construction organizations including SMB. SYNCHRO has been adopted so far by 58 of the ENR Global 100 top contractors and by 77 of the top 100 contractors outside of China. Now, let me take a moment to explain what we mean by 4D. SYNCHRO powered by iTwin allows construction teams to create a 4D construction model by leveraging 3D models from the design phase and adding time, the fourth dimension. It is used for construction planning and scheduling to communicate with key stakeholders and collaborate with trade partners. It is also used in project execution to track progress, as well empower construction teams with information and the context they need to make informed decisions. SYNCHRO featured prominently at the year in infrastructure in 2021 with many winners of the going digital awards crediting SYNCHRO. I would like to highlight 1 winner. Replacing the aging bridge on East 138th Street in New York City may seem uncomplicated at first glance, but located 1 mile South of Yankee Stadium, it is in a highly congested area and the management of traffic during construction is a significant quality of life issue to the local community. The New York State Department of Transportation, the owner of the bridge opted for a digital twin solution to manage the complex sequence of traffic lane closures. They used SYNCHRO to create a 4D construction sequencing model and engage with stakeholders to take important decisions without having to work manually through more than 200 plan sheets. This project sets a new standard for what can be accomplished by DOTs by going digital. You can read more about this project in the 2021 Infrastructure Year Book. From a regional standpoint, our new business growth continue to accelerate in Latin America, primarily driven by additional usage in our E365 accounts, in particular, of open flows or product line for the water infrastructure. The new business growth also accelerated in the Middle East benefiting from renewed investment in infrastructure, including industrial and resources. And as expected, Australia and New Zealand bounced back in Q4 benefiting from renewed investment in both public works and in industrial. 2021 began as a difficult year in China, as mentioned by Greg in previous calls. We confirmed a strong rebound of new business growth in Q4, but not enough to close the gap for the full year. We take the long view in China. It remains an important growth opportunity for Bentley given its massive investments in infrastructure. And the biggest projects in China continue to leverage our technology to innovate, 6 of 19 winning projects of the Going Digital Awards in infrastructure were from China. A few words about Seequent now, which had a great Q4 and a great year 2021. Seequent had strong performance across all regions, the fastest growing region over this quarter was Asia-Pacific. South America was its second fastest growing region followed by Europe, Middle East, Africa, and North America. In all these regions, Seequent benefited from continued investments in mining required to support the world's energy transition. In addition to mining, Seequent's growth remained strong in civil, we expect that growth to accelerate over time as we continue to drive synergies with the rest of Bentley. With Seequent, we are offering the most comprehensive product portfolio for geo professionals. We completed 4 additional acquisitions in 2021 to complement that portfolio, the most recent one being AR2Tech in December for geo statistics and spatial analysis. Leapfrog, the original product of Seequent used to model the subsurface led the growth in Q4. You can think of Leapfrog as a foundation product for geo professionals, on top of which we offer additional products to provide a better understanding of the subsurface. Case in point, we doubled the revenue for 2 acquisitions made in 2021. Imago, to capture and process digital images of drill cores and chips; and MX Deposit, to manage drill hole and other field data. In order to illustrate how these products come together. I would like to highlight First Majestic. First Majestic is a Canadian company, which owns and operates 4 mines in Mexico and the US. First Majestic uses Seequent's Leapfrog geo to develop a realistic representation of the geology at each site. And Leapfrog Edge to aid resources estimation and when geological models are changed, resource estimates also change dynamically. Seequent Central allows the company to publish models and resource estimates so that they are available to everyone in real time, on-site or remotely, including resource geologists based in Canada. First Majestic recently implemented Imago Integrated with Leapfrog geo to make more confident, profitable exploration and mining decisions based on digital images of drill cores and chips. They are also using GeoStudio to evaluate the slope stability of tailing dams and filter tailings, as well as PLAXIS for deep excavation and tunneling analysis. This is just one of many situations that underscore the potential for portfolio expansions and synergies subsurface. Now I would like to hand back to Greg to talk about corporate developments.

Many thanks, Nicolas. And now on to corporate development where I would also like to step back for the big picture. First, priorities we all share and need to track of our environment, social, and governance goals. Our new state-of-the-art website here brings together everything you would like to know in one place. But our ESG website emphasizes that at BSY we are almost uniquely able and motivated to go beyond what's conventionally reported. Our greater contribution is to empower infrastructure engineering through going digital to profoundly advance the UN sustainable development goals, which we also all share. My way of keeping this in front of mind for BSY colleagues is to instead think in terms of ESDG. Infrastructure engineering is literally the limiting factor in achieving, especially the SDG’s highlighted here. So at BSY we can assess our corporate development in relation to three ESDG priorities: our business, our investments, and our current initiatives closely aligned with the advancement through going digital with the world’s mobility, environment, and grids infrastructure by our users. The most effective way to understand our ESDG handprint is to review our infrastructure yearbook, which annually presents our users' nominations for going digital awards. The finalists and winners judged by international expert juries and our own Founders Honorees. The physical 2021 yearbooks will be with you shortly, but here online you can now search, for instance, by each of these ESDG priorities and interactively view these multimedia case studies. The mobility priority has been our sweet spot, representing the largest proportion of BSY revenues for roads and bridges, rail and transit, and municipal engineering. But also within the green CapEx funding needs that we have referenced in this way, since last quarter, mobility is also the largest priority as it is within the actual funding allocation of the US infrastructure investment and Jobs Act IIJA, which we also referenced in this way last quarter and which is generally representative of the new government infrastructure investment commitments everywhere in the world. Here are the Going Digital Award winners in mobility categories and here are the additional projects honored by our founders within the mobility priority. Please note their global diversity. Turning now to the environment, ESDG priority. This also represents a very significant portion of our business, including along with water and wastewater, renewable energy generation and Seequent's foundation from mining and for environmental modeling and monitoring. And within green CapEx, the direct environment ESDG priority is, of course, significant as within the relevant segments within the IIJA. Here are the Going Digital Award winners in environment categories, and here are the projects honored by our founders related to the environmental priority. Now, in addition to these awards from BSY, I would like to highlight a project that resulted in a just announced award to BSY as the Microsoft Asia Pacific region, Social Impact Sustainability Changemaker Partner of the Year. The award recognizes the role of our iTwin platform applied with Microsoft's Azure IoT services and deploying digital twins to improve the operations of offshore wind farms in South Korea. This work was done for Doosan, the company which develops not only the wind farms but also the turbines themselves. As usual, we think the credit should go to Doosan, but like Microsoft, we are proud to empower sustainable development goals. Lastly for the grids ESDG priority, this has already represented the portion of our business shown here prior to the just closed acquisition of Power Line Systems. And within green CapEx, the grids ESDG priority is acknowledged as requiring very substantial new investment, as indeed funded to this significant extent within the IIJA. Here are the Going Digital Award winners in grids categories. And here are the additional projects honored by our founders relating to the grids ESDG priority. I would like to rephrase BSY’s corporate development as a public company by updating these self-descriptive titles that we’ve used in every introductory presentation starting with our IPO Roadshow. Though Ray Bentley has now joined Barry Bentley in retirement after 38 years, during which Ray never took a sector. Our founders all remain board members and very enthusiastic shareholders as you can see from our control group’s SEC filings. Our platform DNA has enabled our integrated comprehensive starting with MicroStation as the foundation for our modeling and simulation applications followed by ProjectWise and AssetWise systems respectively for project delivery and asset performance and now the iTwin platform for digital twin cloud services, which has led to what I regard as conclusive market leadership in infrastructure engineering software for mobility. But for the overall environment ESDG priority there had not been a conclusive such market leader until last year when our wherewithal as a public company enabled us to leapfrog into this tremendous opportunity through our platform acquisition of Seequent, enabling the integration of subsurface modeling and infrastructure IoT monitoring, including for water, flood, geotechnical, and seismic environmental resilience across mining and all other infrastructure assets. The momentum and potential are both unprecedented in our experience. But the grid integration opportunity is by consensus the most urgent for the world to address energy reliability and the constraining bottlenecks in renewable generation, storage, electrification, and communications that jeopardize economies and quality of life. And here our platform acquisition of Power Line Systems also only possible as a public company completes our existing platforms reach from transmission through substations to distribution and communications. This unparalleled constellation of our comprehensive portfolio for going digital across infrastructure engineering and now across all the world’s ESDG priorities supports our unprecedented confidence for 2022 and then beyond. I just don't see how we could be better positioned than we are now. Despite ebbs and flows of geopolitical and regional economic concerns, our geographic diversification and balance, especially strengthened by Seequent’s complementary footprint imports more resilience than ever. Not only did we demonstrate dependable growth even through the pandemic, but we used the resulting savings for the initiatives I have mentioned that are already increasing our rate of growth, including in our 2022 outlook. We saw that early pandemic disruptions in our users work capacity somewhat reduce their consumption during 2020 with a knockdown effect of making 2021's year-over-year comparison appear relatively more favorable. Our outlook for 2022 is to accelerate growth from the compounded levels since pre-pandemic. And in fact, from 2020 to 2022, we will add more than a digit, we expect over 40% to our annual revenues, mostly attributable to business performance, while also increasing our recurring proportion. In covering our tone of business, I quantified the increasing BSY spending intensity we are achieving in enterprise accounts at the same time as our new business focus on the ultimately, perhaps even larger SMB opportunity. Now a company can presumably grow faster by spending more to go-to-market at the expense of its operating margins. At BSY, our perhaps simplistic approach to this tradeoff is to internally commit to 1 margin percent per year of expansion in our sustainable margins, normalized from non-recurring savings in excess of the reinvestment as in these pandemic years. Subject to this operating margin constraint at 33% for 2022, we will continue expanding the initiatives which we have concluded from experience are serving to increase our long-term growth all else being equal. This includes continued expansion of our user success resources, especially to support expansion of E365 for faster accretion in enterprise accounts. Also continued expansion of our SMB dedicated resources supplemented by a significantly increased SaaS and development expenditures, now that we are through our initial Sarbanes-Oxley systems freeze on a new digital experience for the e-commerce self-service that SMB engineer prospects and users greatly prefer. While putting that altogether, I now ask David to introduce our new BSY investment organization and activities and then to introduce Werner, his CFO successor to go over our financial performance for 2021 and for our 2022 outlook. Thanks.

Thank you, Greg. I plan to discuss our recent acquisition of Power Line Systems and our immediate priorities for PLS. To start, let me provide an overview of our BSY investments group and how it complements our core software business. We are actively pursuing acquisitions that can be incubated or accelerated outside of our core area or that enhance it, which we refer to as acceleration initiatives. Our BSY Investment Group also manages iTwin Ventures, our corporate venture capital fund aimed at promoting infrastructure digital twin applications. We believe that the adoption of digital twins can be significantly supported by a network of digital integrators, including our own Cohesive Group and our digital construction works. I'll delve deeper into our acquisition activities over the past year, which have been quite busy. Our strategy of balancing build versus buy has resulted in a robust pipeline of opportunities. We successfully completed 14 acquisitions in this timeframe, with 12 being smaller tuck-in deals that fit within our operational strategy. Notably, we closed two major acquisitions that represent new platforms or large-scale additions, specifically Seequent, which is performing very well, and Power Line Systems. You heard Greg’s insights on what he refers to as ESDG, and I want to emphasize that each of our 2021 acquisitions aligns with our key growth themes in mobility, environment, or grid. Our investment strategy extends from the early stages of business through to maturity. Through our open-source iTwin platform, we provide developers with tools, support, and partner programs for businesses at all stages. At the end of 2020, we launched iTwin Ventures, committing up to $100 million to foster an ecosystem of applications utilizing digital twin technology. In its initial year, iTwin Ventures has been active, investing in early growth and seed stage companies with promising digital twin solutions, and exploring opportunities right from seed to pre-seed stages. We've also implemented an ecosystem sponsorship program to encourage iTwin platform adoption alongside the funding we provide. As businesses mature, we seek acquisition opportunities, some of which we incubate or accelerate before integrating them into Bentley Systems. Examples include our acquisitions of Sensemetrics and Vista Data Vision, focusing on seamless integration of IoT data with the iTwins platform. Our acquisition of Power Line Systems represents a more established business operating within our BSY investments acceleration team. We previously shared details about this acquisition, confirming a $700 million payment along with a unique structure that grants a tax-deductible step-up valued at approximately $90 million. We opted for a cash payment funded through our senior secured credit facility. Although we anticipated closing the deal by the end of 2021, the HSR process extended it by 30 days, pushing the closing to the end of January 2022, which will proportionately affect our expected revenues from PLS for that year. As for our priorities in 2022 regarding grid solutions, there is a significant opportunity arising from the need to strengthen electrical grid infrastructure, extend its capabilities, and enhance it for alternative energy sources, backed by ample private and public funding. In 2022, we aim to ramp up our sales and marketing efforts and expand geographically. We'll also introduce our structural digital twin for utilities and consolidate our structural communications and grid offerings into one group, recognizing the growing opportunity for colocating telecom equipment with high voltage power structures. Thus, we will merge PLS, SPIDA, and OpenTower into our Grid Integration Group. Lastly, I want to touch on Cohesive, our digital integrator business, which has two primary goals. First, we aim to develop a thriving business model that encourages a wider ecosystem of digital integrators among our current engineering firm users. Second, we want to enhance the pull-through of Bentley Systems software products and adoption of digital twins. Cohesive was launched in May 2020 with the acquisition of Cohesive Solutions, a consultancy leveraging IBM Maximo for transformation. We have followed up with four additional acquisitions and integrated an existing consulting business into our operations. After a successful integration initiative called One Cohesive, we are now experiencing scale leverage efficiencies and a growing backlog of new business. Recent successes include an eight-figure contract with Evergy for Maximo solutions and collaboration with Thales for a governmental Maximo project in Canada. Infrastructure asset operations and optimizing existing assets present a key opportunity for introducing infrastructure digital twins and driving iTwin technology adoption. I highlight our involvement in major projects like the UK National Highways Smart Motorways program and the HS2 high-speed rail project, showcasing the depth of our Cohesive team's contributions. That's a summary of what we are doing in BSY investments, and Werner will now discuss our 2021 operating results and our outlook for 2022.

Thank you, David. I will start with our revenue performance. Our fourth quarter revenues of $267.7 million grew 21.9% over the same quarter last year. Most of that growth comes from subscriptions, which grew 25.2% over the prior year. We attribute the acquisition of Seequent to account for just under 13%; foreign currency headwinds offset just under 2%, and therefore our business performance comprises just over 14% of growth on a constant currency basis. Our perpetual license revenues decreased by $2 million for the quarter compared to the prior year and represent approximately 7% of total revenues. Our professional services revenues are 9% of our total revenues and increased $5 million over the same quarter last year, representing a growth of 25%. The continued growth in our services business is attributed to our investments into the Cohesive Digital Integrator businesses. Full-year revenues are $965 million, which is an improvement of 20.4% over the prior year. Similarly, subscription revenues improved by 19.7% over the prior year, with about 2% coming from currency tailwinds, 6% from Seequent, and just under 12% from business performance. Perpetual licenses are down $4.3 million for the full year, reflecting preferences for subscriptions, and professional services are up about 53% for the full year, reflective of Cohesive. Moving onto recurring revenue performance, our last 12-month recurring revenues increased by 19.7%. The mid-year onboarding of Seequent contributed about 6 percentage points to this improvement. Our strong relationships with our accounts are evident in our 98% account retention rate, and our constant currency recurring revenues net retention rate now stands at 109%. Our annual recurring revenue (ARR) is up 26% compared to the same time last year. As mentioned in prior quarters, Seequent contributed 13% of that growth, and since this is a constant currency metric, business performance accounts for the remaining 13%, which includes new business growth from our focused S&P initiatives. I want to caution that ARR growth in 2021 is against the pandemic and EPC-included dip in 2020. To illustrate this, we are showing our ARR growth performance since 2017 in relation to an accelerating trend line. The significant dip in 2020 sets a lower comparative basis, thus increasing our ARR growth in 2021, which would have otherwise aligned more closely with the trend line. Also, Seequent, which is about 10% of our business and continues to grow at least twice as fast as Bentley, contributed to an ARR growth inflection starting with its acquisition in mid-2021. Now I am showing our 2022 outlook, projecting constant currency ARR growth between 14% and 16%, which includes growth of 2.5% from the onboarding of Power Line Systems and growth of 11.5% to 13.5% from business performance, including Seequent. Our GAAP operating income was $43.3 million for Q4 2021, down $11 million, and $94.6 million for the full year 2021, down $55.6 million from the prior year. These GAAP results reflect substantial incremental charges for acquisition-related expenses, primarily from Seequent, alongside incremental amortization from purchase intangibles also primarily relating to the Seequent acquisition, non-cash stock-based compensation, and a one-time accounting charge of $91 million related to the modification of a portion of our non-qualified deferred compensation plan from an equity settled arrangement to a cash-settled arrangement. Our adjusted EBITDA metric normalizes for these activities, with a fourth quarter improvement in adjusted EBITDA of 13.9% and for the full year adjusted EBITDA of $324.9 million, an improvement of 22% relative to 2020. Within our adjusted EBITDA metric, there is more to our margin performance over time that needs to be understood. We have now completed our first year as a public company and our second year of the pandemic. We are committed to an annual expansion of our adjusted operating margins by about 100 basis points. David previously explained the shift of our compensation structure for certain top executives from only cash-based compensation prior to our IPO to a mix of cash and stock-based compensation post-IPO. The stock-based compensation add-back favorably impacted our margin performance starting in Q4 2020. We normalize our EBITDA margin as if the post-IPO compensation structure had been in place from the beginning of 2019. David also discussed significant pandemic-related cost savings quantified at $42 million, which benefited our cost structure in 2020. For 2021, we expected these costs to return fully to our cost structure and we thus added them pro forma in normalizing our 2020 margin performance. Therefore, on a pro forma basis, we show a normalized adjusted EBITDA margin of approximately 30% in 2019, 31% in 2020, and we guided towards 32% for 2021. Now for our 2021 actual performance. Our operating cost structure again benefited from reduced travel and life events, though to a much lesser degree than in 2020. We quantify these cost benefits at $13 million relative to what we expected to incur as a post-pandemic run rate, and we normalized for such savings to provide a comparison of normalized period-over-period margin performance. Towards the end of 2021 and into 2022, we see these costs aligning more closely with the expected post-pandemic run rate, and our incremental public company operating costs are now fully absorbed in our cost structure. With an actual adjusted EBITDA margin of 33.7% and a normalized adjusted EBITDA margin of 32.3%, we fully delivered on our adjusted EBITDA margin commitment of approximately 32% for 2021. For 2022, we see significant opportunities to invest in top-line growth. Our goal is to set our margin expansion target at approximately 33%, which is 100 basis points above our normalized 2021 margins. Our outlook is informed by our current tone of business and assumes stability in foreign currency exchange rates, without contemplating platform acquisitions that are not yet concluded. It does factor in the acquisition of Power Line Systems. Accordingly, we expect revenues between $1.110 billion to $1.140 billion, representing growth over 2021 revenues of 15% to 18.1%. This expected growth was partly offset by foreign exchange headwinds, estimated at $18.5 million, particularly from a stronger US dollar than last year. Given the effective natural hedge, the FX impact on margins is significantly mitigated. We project constant currency ARR growth to be between 14% and 16%, and we expect adjusted EBITDA to be between $370 million and $380 million, approximately a 33% adjusted EBITDA margin. I also provide additional details on interest, taxes, CapEx, outstanding shares, and dividends. Regarding liquidity, our Q4 GAAP operating cash flows of $80.6 million decreased by 2.1%, while our full-year operating cash flow of $288 million increased by 11.5% over the previous period in 2020. We expect, on average, our business to efficiently generate cash flows from operations at a ratio of 85% to 90% of adjusted EBITDA. Both our Q4 operating cash flow and our full-year 2021 operating cash flow were at the high end of this range, with cash conversion ratios of 91% and 89%, respectively. In December, we entered into very favorable terms for a new $200 million senior secured term loan, which will mature in November 2025, coinciding with the maturity of our $850 million revolving credit facility. We used the funds from the term loan, along with cash on hand and availability from our undrawn revolving credit facility, to finance the acquisition of Power Line Systems, which was finalized at the end of January 2022 for an all-cash consideration of approximately $700 million. In 2021, we spent around $121 million related to stock-based compensation share repurchases. For 2022, we plan to significantly reduce our cash expenditure for such net settlements by distributing shares to participants on a gross basis. We will allocate the cash savings to fund programmatic acquisitions and to pay down debt. I also remind you that during the first and second quarters of 2021, we completed the issuance of our 2026 and 2027 convertible notes for a combined principal of $1.27 billion, incurring an annual cash interest obligation of only $3 million. These unsecured notes carry attractive conversion strike prices. We view this as not a permanent part of our capital structure and applied most of the proceeds to finance the approximately $900 million cash consideration for our acquisition of Seequent. As of the end of December, considering pro forma adjustments for the financing of the $700 million cash purchase price for our acquisition of Power Line Systems, our pro forma net debt senior leverage was 1.6 times, and our pro forma availability under the revolving credit facility stood at $358 million. Including the convertible notes as part of our indebtedness, our pro forma net debt leverage was 5 times as of the end of December. Our business, with its predictable and visible cash flows, manages this well. Our capital structure is strong and able to support continued growth initiatives and programmatic acquisitions that we intend to pursue. With that, we are ready for Q&A. Thank you.

Hey, Carey, are you going to organize the Q&A? Carey, you might be muted.

I needed to get unmuted. Sorry about that. We will begin with Jason Celino from KeyBanc.

Greg, can you hear me?

Yes.

Perfect. I can't see again my video on, I guess that's okay. So Greg, now the comments on SMB, very nice to see continuing all throughout the year, but what modules are you seeing the most uplift in? Is at this point are you saying these SMB customers supplementing their design and modeling processes with Bentley? Or are they replacing their existing solutions?

Well, I think the majority of it would be replacing existing solutions. Many of them have not been aware of us. We are reaching them with social media marketing and so forth. But there is a significant minority where they are starting with specialized products, the more expensive products that, again, they find us through querying and we convert those sales. But I think the majority of it is competitive gain.

Okay. Interesting, you know, and then maybe one quick on PLS. The acquisition before you guys bought them, it was running at EBITDA margins of doubled that of Bentley, but based on kind of the guidance outlook, it looks like Bentley is reinvesting that difference into the PLS organization, so does the 2022 revenue and ARR guidance just assume PLS continues to grow at the historical level? And then I guess, could we see upside with the investments and ramp up?

We anticipate faster growth, which justifies our increased spending. Previously, under private equity ownership, there was a focus on maximizing current profitability, but that’s not our approach. We aim to secure long-term benefits. Our goal is to complete several years of development plans for PLS within a year, particularly to globalize our offerings and enhance grid integration. We see tremendous opportunities in the current market for transmission and integrated grids, which drives our efforts within our acceleration group, allowing us to achieve more through our increased investment. This is a shift from past practices, but we maintain continuity with PLS and the integrated group, which now includes SPIDA and our Tower business. Would you like to elaborate on that, David Hollister?

No, we are indeed investing some of that margin windfall, if you will, Jason and we expect gross returns as a result.

Okay. Perfect. I will get back in queue. Thank you.

Yes, we’ll next go to Matthew Broome from Mizuho.

Okay. Great. Hope you can all hear me? Hi, everyone.

Yeah. Hi.

Hi. So it's great to see your LTM net retention rate recover from the pandemic from your presentation, it sounds like you expected to track ARR growth above even where it is right now. So how sustainable is net revenue retention above that sort of 108% to 110% range?

Well, we had been tracking this chart that we showed you sort of internally and we believe there was kind of a mathematical relationship there, which we think is borne out now, and we are sharing, all of those numbers are numbers you have seen before. But putting them together in that way sort of suggests the way it works. It can get as high in ARR as ARR growth, because the ARR growth includes the new name ARR growth, which runs about 2% of our ARR per year. But can it grow faster? Well, application mix accretion is a reason to think that it can. We haven't talked about inflation, maybe this year it is a percent or two more when we are sort of not normalized to think in those terms, but E365 we believe fundamentally in substance is the way to maximize the net retention, the accretion, the introduction of more usage, and more specialized applications that our accounts want and need. They want and need it now, because they need to get more work done without being able to hire more people and going digital is the answer for that and the E365 program is how we introduce these success blueprints that they have more appetite for than ever right now.

Right. Regarding the E365 topic, the vast majority of your enterprise licensing is now E365. Do you still anticipate significant ELS conversions, or will it be more challenging to persuade the remaining enterprise customers to switch?

Well, what I showed there on the chart was the accounts that spend over 100,000 per year for us, so that would be other than our definition of SMB. I realize that's emphasis on the end, when you get up to 100,000 per year. But the portion, the largest portion in fact of our ARR at present are these 100,000 per year plus accounts, we count them as enterprise accounts that are not yet on E365. And many of them were never on ELS. ELS was kind of an in-between program and we will be introducing E365 to those accounts for many years to come we think.

Okay, great. And I am sorry, if I could just squeeze one last one in. Just in terms of SYNCHRO, really interesting to see the strong new business growth there, particularly given the construction industry headwinds. And clearly, it does look like there is a lot of demand for that 4D modeling that you were talking about. How large do you see this market opportunity and to what extent I guess this construction management software focus for investment for Bentley going forward? That's it for me.

I want to stress that we are not focusing on the entire construction sector, but rather on the part that is suitable for 4D modeling. I will turn it over to Nicolas for more insights.

Exactly, Greg. So our focus is on heavy civil, we are not going after any construction industry out there. And our focus is actually to skate where the truck is going, right? We are a relatively new entrant in that market and we are going after accounts, firms that are willing to embrace 3D and are willing to add this fourth dimension with scheduling now. So it's just a net new growth opportunity for us.

If I can say the example of the New York DOT that Nicholas showed is really promising for us, because this is a DOT, let's say we are never going to get our work done with traditional 2D plan sets, let's leapfrog all the way to 4D and work on making the 3D package the legal construction document. It's a very big step, but we hope the IIJA, the Jobs Act will help institutionalize this greater ambition of which the New York DOT is an example. And that involves SYNCHRO. So the plan is, we'd say, construction hearing include that how we are going to build it and how you design it.

Great. Thanks very much and nice quarter.

We will now go to Matt Hedberg from RBC.

Hey guys. Thanks for taking my question. Yeah, and congrats from me as well on a strong closed year. You guys spent a lot of time on the presentation talking about digital twin. And I know we have talked about digital twin really since you are predating your IPO. Is there any help you can give us on sizing that business? I believe exiting 2020 you talked about an 8-figure run rate, any additional update on sizing or relative growth of digital twin?

My quick answer is that it's essentially a multiple of what we're currently doing, as it incorporates civil and structural engineers' simulation and modeling throughout the lifecycle of assets. For instance, take the transmission grid and power line structures opportunities. Some of you might have seen the segment recently highlighting the unreliability of our energy grid, which is continually aging. The Federal Energy Regulatory Commission is now mandating dynamic ratings of the grid's capacity, which indicates that we can safely operate it at higher temperatures. However, we need to develop a better understanding of what we have and its capacity, rather than assuming it based on how it was originally constructed. This creates an opportunity for digital twins for existing transmission structures and lines. In many cases, power line structures have been designed using these methods. Now, we have the chance to transform them into living, four-dimensional digital twins to enhance resilience and address vulnerabilities. This represents a vast opportunity compared to the initial design work; instead of representing just one year of effort, it encompasses decades of potential work.

The quantification is significant because it is essential to the industry's evolution. The entire industry is shifting towards digital twins, and we cannot view it as a tangent or merely a specific product line. All of our products will be integrated within the context of digital twins. Our strategy centers on monetizing our digital twin solution, particularly through the iTwin platform, which serves as our infrastructure digital twins platform and supports both Bentley and non-Bentley products. In terms of monetization, we can consider this platform from two perspectives. For Bentley products, while we don't disclose revenue by specific brand, we have doubled our revenue across all Bentley products powered by iTwin, including SYNCHRO and OpenTower iQ, which David mentioned in relation to the grid. From a third-party perspective, our current focus is on adoption rather than immediate revenue growth. Being relatively new as a platform, launched a little over a year ago, we've increased the number of partners actively developing on it tenfold within a year. This indicates significant traction from an adoption standpoint, and over time, this will lead to monetization through the products, applications, and solutions that our partners create on the platform.

Got it. That makes a lot of sense. Warner, I have a financial question for you. You have the Seequent anniversary and Power Line contributing to revenue this year. While we can understand how those two factors affect the top line, regarding margin expansion, you're guiding for about a basis point of expansion, which is encouraging despite all the investments. Is there anything we should consider about whether those are more front-end weighted? Also, when can we expect full linearity of operational margin improvement, and is there anything to think about in that regard?

I will just throw in because I am an old finance guy, a 100 basis points, not 1 basis point.

I believe the current consensus aligns well with our expectations regarding revenue and margin allocation. We anticipate a strong fourth quarter, consistent with our historical performance, which remains unchanged with the inclusion of Seequent. With Seequent, the revenue distribution may be more balanced in the first three quarters. The current revenue outlook seems accurate, with a stronger fourth quarter and margins maintaining consistency throughout the year. Additionally, we expect expenses to rise somewhat towards the end of the year due to various factors we’ve discussed previously, including year-end activities and certain incentives that are more front-loaded. Our metrics are projected to improve starting April 1. Overall, the growth appears to be steady across the year, with a slightly higher EBITDA margin anticipated in the first quarter compared to the end of the year.

Got it. Thanks a lot. Well done guys.

We will next go to Baird, Joe Vruwink.

Great. Hi, everyone. I would like to get your latest thoughts on infrastructure stimulus, both here and abroad. It seems the funds have started to flow, so local agencies have it, projects are being committed, what's your latest thought on your customers being in a position to see an uplift in their business activity from the stimulus that's passed? And then are you also seeing that more directly tie into uplift in demand for your products, so that you can kind of connect one-to-one if the second half, let’s say, more firms are going to be receiving their funding, their project activity that might actually manifest in acceleration for Bentley?

When you inquire about the engineering firms and their increasing business activity, it's evident that their business development efforts are on the rise. For instance, in mobility, more contracts are entering various stages of being awarded, and the engineering firms are closely monitoring that. In relation to our business, they are looking at programs like E365 that can enhance their productivity enabling them to take on more work without hiring additional staff. However, much of this new work is still forthcoming. Some firms are engaging with owners to file applications for funding, but there may be delays in federal agencies processing and approving these applications, which is a cause for concern. Nonetheless, progress is being made. A significant factor is overcoming regulatory hurdles, particularly concerning the transmission grid. The Infrastructure Investment and Jobs Act includes measures that expedite permitting processes, which can otherwise take a long time for expansion projects. The anticipation of new work being initiated by reducing the time needed for permits is a significant development, especially in the integrated grid sector of our business opportunities. It's not just about the distribution of funds, but also about several enhancements. For instance, in mobility, the introduction of 3D construction documents for 4D processes is gaining attention. There was an informative article in Engineering News-Record this month on this topic, which is expected to boost demand for our solutions.

So just related to those, when you think about exiting this past year with a 13% organic ARR growth rates, the guidance for next year it starts at 12% to 14%, or 11.5%, 13.5% obviously the base for comparisons are more difficult one. But do you think it's possible that given some of the things you have mentioned so far, continued success with SMB application accretion and the infrastructure stimulus layered on top that there is a potential to actually accelerate further from this band you have now been in?

I think we are accelerating, and things sort of couldn't feel better in terms of these three directions of mobility and environment, which is growing tremendously in a month. We think our mining is cyclical. The cycle we are in, I think is going to last until the economy is decarbonized in the world. And then the grid opportunity that I mentioned, they all feel like they can accelerate. Now, it must be said, the world is on edge at the moment following a pandemic with a brutal war. So we are sort of inclined to be circumspect and improve it throughout the year here. But certainly, we couldn't be more excited by how we can help infrastructure engineering here in 2022.

Thank you very much.

We will next go to Sophie Li from Berenberg, please.

Hi, thank you for taking my questions. I have one question, possibly for Greg, specifically regarding the E365. Can you provide more details about the recovery in the oil and gas sector? Also, at what stage of the recovery are we currently? Given the high oil prices today, are you anticipating any increase in demand from that segment in fiscal year 2022?

I wouldn't go so far as to say expecting it, but believing logically that it should occur. I can't tell you where we are in the recovery, I think we are at the bottom or at the end of the trough based on usage, and its capital projects that are down there, the industry needs to sweat the operations of existing assets on the OpEx side. And I expect the question about Russia, we mentioned Russia during the past year as one of the first to benefit from higher oil prices and spend on civil infrastructure that was some new business growth that we commented upon. Overall, our exposure Russia is on the order of about 1% of our revenues. So there's not a lot at risk and we already are subject to some sanctions and now some new sanctions as to Russia, but it seems logical to me that there will need to be new investment in industrial capacity, and E365 is the program they are all on. So as soon as they are busier, we won't have to wait a year as we once would have done in the previous commercial program to benefit from that, and I hope it will be 2022. I think they believe it will be 2022.

That's very helpful. Thank you.

Well, let's go to Kash Rangan from Goldman.

Hey, Greg. Congratulations on wrapping up the fiscal year. I'd love to hear your thoughts on factors like ESG and decarbonization, as it seems the civil infrastructure sector could outpace commercial. While commercial has performed better than civil over the past decade, with low-cost capital and a building boom, do you believe there might be a shift where civil starts to lead? Additionally, I'm interested in your views on the SMB market. As you explore that opportunity, do you think we can pursue it without negatively impacting margins, or could margins actually improve by leveraging channels like resellers compared to the previous direct model? Thank you.

Let me start with SMB since it's fresh in my mind. We want to establish a new channel that offers a digital experience, aiming for a direct and no-touch approach. As software developers, we are eager to get started with this in 2022. We had to pause to complete the Sarbanes Oxley documentation and certification of our current processes, but we are committed to going fully digital for the SMB opportunity moving forward. This will involve significant spending on our part, as we're allocating margin that would otherwise contribute to our bottom line for 2022. However, increasing our SMB penetration and capturing market share from competitors will ultimately enhance our margins, since we won’t need additional expenditures on product development for this initiative. Regarding your first question, civil will definitely surpass the commercial and facility sector in growth rate. The commercial and facility sector will face challenges as companies adapt to new work styles. We are adjusting our infrastructure to support a more empowered workforce and will utilize smaller, design-intensive facilities that promote collaboration, while acknowledging that much of the work can be done remotely. This shift is happening globally, and I believe your prediction is accurate.

Thank you so much.

We have time for one more question, Michael Funk from Bank of America.

Yeah, thank you for fitting me in. I really appreciate it. So thinking back to PLS, I think part of the justification or benefit is with herbal lane, Bentley sales force and sales motion. I know, it's early days, but any thoughts there on potentially driving the upside to revenue growth and the synergies? And then second, just thinking about wireless specifically in that industry, still hearing a lot about increase in site development, so wondering where you think we are in that cycle?

I would like Nicholas to discuss the industry solutions aspect. The PLS has been successful in engaging with transmission engineers, who are familiar with PLS, although there is still much opportunity globally. On the enterprise side, the digital twin opportunity presents significant benefits from our industry solutions. The 5G location, if that’s what you’re inquiring about, is an intriguing opportunity we refer to as Grid Integration, which we will likely provide an update on in the next quarter. Nicholas, could you address the sales synergies?

Yeah. In general, we are strengthening the industry as I mentioned in our growth markets. One of the key growth industries for us is electric utilities. Now, if you remember as we presented PLS, we said that there go to market investments were relatively little, there is a big part of the business which is through channels. You could argue Bentley is going to become the overall Group, the biggest channel for the PLS software, right? So we see synergies across the accounts, the traditional PLS accounts with the traditional Bentley account here in North America. But we see, of course, a huge potential for PLS outside of North America, that's something that they wanted to do on their own. And that's something that we will be able to accelerate now that PLS is part of Bentley.

And I guess it's fair to a similar thing at your guidance a restored PLS result is really not much of that synergy baked into your guide for this year, is that fair?

We anticipated $30 million in subscription revenue for 2022. We closed a month later than expected, and that $30 million is based on PLS's historical growth, which has been somewhat faster than Bentley Systems. It's not an easy target, but we are aiming for more than $30 million internally. However, the guidance we provided reflects the $30 million adjusted for the absence of January revenues.

Great. Thank you. Look forward to hearing more on 5G as well. Thank you.

Well, we will have to leave it there. Thank you, everybody, and we will see you next quarter. Cheers.

Thank you.