Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Total stock‑based compensation expense consists of the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Restricted stock and RSUs expense	$	15,987	$	13,530	$	29,677	$	27,453
Bonus Plan expense (see Note 11)	4,879		3,336		10,180		7,882
ESPP expense (see Note 13)	591		600		1,215		1,175
Stock grants expense	600		600		600		600
Stock option expense	—		—		—		343
DCP elective participant deferrals expense (1) (see Note 12)	44		38		87		135
Total stock-based compensation expense (2)	$	22,101	$	18,104	$	41,759	$	37,588

(1)DCP elective participant deferrals expense excludes deferred incentive bonus payable pursuant to the Bonus Plan.

(2)As of June 30, 2024 and December 31, 2023, $5,372 and $4,043 remained in Accruals and other current liabilities in the consolidated balance sheets, respectively.

Total stock‑based compensation expense (income) is included in the consolidated statements of operations as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Cost of subscriptions and licenses	$	(732)	$	1,132	$	362	$	2,166
Cost of services	756		707		1,638		1,714
Research and development	5,082		4,424		9,963		9,710
Selling and marketing	3,542		2,943		6,320		5,813
General and administrative	13,453		8,898		23,476		18,185
Total stock-based compensation expense	$	22,101	$	18,104	$	41,759	$	37,588

Stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period, which is generally the vesting period. Specifically for performance‑based RSUs, stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period based on the number of awards expected to vest at each reporting date. The Company accounts for forfeitures of equity awards as those forfeitures occur.

Bentley Systems, Incorporated 2020 Omnibus Incentive Plan

The 2020 Plan provides for the granting of stock, stock options, restricted stock, RSUs, and other stock‑based or performance‑based awards to certain directors, officers, colleagues, consultants, and advisors of the Company, and terminates in September 2030. The 2020 Plan provides that 25,000,000 shares of Class B common stock may be issued for equity awards. Equity awards that are expired, canceled, forfeited, or terminated for any reason will be available for future grant under the 2020 Plan. As of June 30, 2024, equity awards available for future grants under the 2020 Plan were 20,033,122.

Restricted Stock and RSUs

Under the equity incentive plans, the Company may grant both time‑based and performance‑based shares of restricted Class B common stock and RSUs to eligible colleagues. Time‑based awards generally vest ratably on each of the first four anniversaries of the grant date. Performance‑based awards vesting is determined by the achievement of certain business growth targets, which include growth in annualized recurring revenues (“ARR”), as well as actual bookings for perpetual licenses and non‑recurring services. Performance targets are generally set for performance periods of one year to three years.

The following is a summary of unvested restricted stock and RSU activity and related information under the Company’s applicable equity incentive plans:


							Time-		Performance-
							Based		Based
			Time-				Weighted		Weighted
	Total		Based				Average		Average
	Restricted		Restricted		Performance-		Grant Date		Grant Date
	Stock		Stock		Based		Fair Value		Fair Value
	and RSUs		and RSUs		RSUs		Per Share		Per Share
Unvested, December 31, 2023	3,303,849		2,938,208	(3)	365,641	(5)	$	39.87	$	39.21
Granted	1,191,104	(1)	984,192	(4)	206,912	(6)	50.90		49.49
Vested	(754,222)		(572,432)		(181,790)		43.29		39.15
Forfeited and canceled	(195,712)		(161,116)		(34,596)		38.05		42.38
Unvested, June 30, 2024	3,545,019	(2)	3,188,852		356,167		$	42.75	$	44.90

(1)For the six months ended June 30, 2024, the Company only granted RSUs.

(2)Includes 47,710 RSUs which are expected to be settled in cash.

(3)Includes 199,076 time‑based RSUs granted during the three months ended March 31, 2022 to certain officers and key employees, which cliff vest on January 31, 2025.

(4)Includes 300,964 time‑based RSUs granted during the three months ended June 30, 2024 to certain officers, which vest 20% on each of December 15, 2025, 2026, 2027, 2028, and 2029.

(5)Primarily relates to the 2023 annual performance period. Includes 185,186 performance‑based RSUs granted during the year ended December 31, 2022 with extraordinary terms, which are described below.

(6)Primarily relates to the 2024 annual performance period. Includes 1,335 additional shares earned based on the achievement of 2023 performance goals for performance-based RSUs granted during the year ended December 31, 2023.

During the year ended December 31, 2022, the Company granted 185,186 performance‑based RSUs to certain officers and key employees, which vest subject to the achievement of certain performance goals over a three‑year performance period (the “Performance Period”). For each year of the Performance Period, one‑third of the performance‑based RSUs will be subject to a cliff, whereby no vesting of that portion will occur unless the Company’s applicable margin metrics (which, for 2022 was Adjusted EBITDA margin, and for 2023 was and 2024 will be Adjusted OI w/SBC margin, excluding the impact of foreign currency exchange fluctuations) also equals or exceeds the relevant target level for such year. Provided that the applicable margin targets are met, the total number of performance‑based RSUs that will vest is determined by the achievement of growth targets, which include growth in ARR, as well as actual bookings for perpetual licenses and non‑recurring services. Final actual vesting will be determined on January 31, 2025. The 2023 Adjusted OI w/SBC margin target, excluding the impact of foreign currency exchange fluctuations, and the 2022 Adjusted EBITDA margin target for the performance‑based RSUs were met.

The weighted average grant date fair values of RSUs granted were $50.66 and $40.80, for the six months ended June 30, 2024 and 2023, respectively.

For the six months ended June 30, 2024 and 2023, restricted stock and RSUs were issued net of 142,407 and 104,773 shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $7,256 and $4,336, respectively.

As of June 30, 2024, there was $100,721 of unrecognized compensation expense related to unvested time‑based restricted stock and RSUs, which is expected to be recognized over a weighted average period of approximately 2.0 years. As of June 30, 2024, there was $8,467 of unrecognized compensation expense related to unvested performance‑based RSUs, which is expected to be recognized over a weighted average period of approximately 1.0 year.

Stock Options

The following is a summary of stock option activity and related information under the Company’s applicable equity incentive plans:



		Weighted
		Average
	Stock	Exercise Price
	Options	Per Share
Outstanding, December 31, 2023	916,429	$	5.74
Exercised	(911,429)	5.74
Forfeited and expired	(5,000)	5.74
Outstanding, June 30, 2024	—	$	—

For the six months ended June 30, 2024 and 2023, the Company received cash proceeds of $4,007 and $9,700, respectively, related to the exercise of stock options. The total intrinsic value of stock options exercised for the six months ended June 30, 2024 and 2023 was $40,775 and $93,656, respectively.

As of June 30, 2024, there was no remaining unrecognized compensation expense related to unvested stock options.

Stock Grants

For the six months ended June 30, 2024 and 2023, the Company granted 11,391 and 12,639 fully vested shares of Class B common stock, respectively, with a fair value of $600.