Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Total stock‑based compensation expense consists of the following:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Restricted stock and RSUs expense	$	14,375	$	13,988	$	44,052	$	41,441
Bonus Plan expense (see Note 11)	1,057		3,847		11,237		11,729
ESPP expense (see Note 13)	622		634		1,837		1,809
Stock grants expense	—		—		600		600
Stock option expense	—		—		—		343
DCP elective participant deferrals expense (1) (see Note 12)	43		35		130		170
Total stock-based compensation expense (2)	$	16,097	$	18,504	$	57,856	$	56,092

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

(2)As of September 30, 2024 and December 31, 2023, $1,878 and $4,043 remained in Accruals and other current liabilities in the consolidated balance sheets, respectively.

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Cost of subscriptions and licenses	$	520	$	1,254	$	882	$	3,420
Cost of services	705		671		2,343		2,385
Research and development	5,018		4,977		14,981		14,687
Selling and marketing	3,305		3,244		9,625		9,057
General and administrative	6,549		8,358		30,025		26,543
Total stock-based compensation expense	$	16,097	$	18,504	$	57,856	$	56,092

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 September 30, 2024, equity awards available for future grants under the 2020 Plan were 20,112,700.

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	(968,364)		(786,574)		(181,790)		36.50		39.15
Forfeited and canceled	(266,736)		(228,703)		(38,033)		39.84		42.95
Unvested, September 30, 2024	3,259,853	(2)	2,907,123		352,730		$	44.52	$	44.87

(1)For the nine months ended September 30, 2024, the Company only granted RSUs.

(2)Includes 35,093 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 $40.82, for the nine months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30, 2024 and 2023, restricted stock and RSUs were issued net of 171,314 and 137,675 shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $8,671 and $6,062, respectively.

As of September 30, 2024, there was $86,995 of unrecognized compensation expense related to unvested time‑based restricted stock and RSUs, which is expected to be recognized over a weighted average period of approximately 1.9 years. As of September 30, 2024, there was $5,141 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, September 30, 2024	—	$	—

For the nine months ended September 30, 2024 and 2023, the Company received cash proceeds of $4,007 and $10,590, respectively, related to the exercise of stock options. The total intrinsic value of stock options exercised for the nine months ended September 30, 2024 and 2023 was $40,775 and $102,667, respectively.

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

Stock Grants

For the nine months ended September 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.

Equity Awards Subsequent to September 30, 2024

In October 2024, the Company granted 265,233 time‑based RSUs, which generally vest ratably on each of the first four anniversaries of the grant date. The unrecognized compensation expense related to these RSUs is approximately $13,200, which is expected to be recognized over a weighted average period of approximately 4.0 years.

Additionally, in connection with an acquisition, in order to promote key colleague retention, in October 2024, the Company granted 205,592 time‑based RSUs, which vest ratably on each of the first three anniversaries of the closing date of the acquisition. The unrecognized compensation expense related to these RSUs is approximately $10,200, which is expected to be recognized over a 2.8 year period.