Description of Business and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Summary of Significant Accounting Policies

Business and Operations

Bentley Systems is the infrastructure engineering software company. The Company’s purpose is to advance the world’s infrastructure for better quality of life. The Company’s products and solutions empower people to design, build, and operate better and more resilient infrastructure through the adoption of Bentley Systems’ intelligent digital twin solutions.

The Company serves enterprises and professionals across the infrastructure lifecycle by improving project delivery and asset performance. The Company’s Bentley Open engineering applications and Seequent geoprofessional applications are primarily cloud-connected desktop modeling and simulation applications that support the breadth of engineering and geoprofessional disciplines. Bentley Infrastructure Cloud, provided via cloud and hybrid environments, extends enterprise collaboration during project delivery, and helps manage engineering information during operations and maintenance. Bentley Asset Analytics solutions automatically detect and analyze issues to trigger key operational workflows, improving overall asset performance. Powering these products is our Cesium and iTwin Platform, the Company’s cloud‑native technology platform to create, curate, and leverage infrastructure digital twins, which was augmented through the acquisition of Cesium in September 2024. Through the Company’s platform, existing products are becoming increasingly iTwin-enabled to take advantage of digital twin capabilities, and the Company is developing a new generation of iTwin-native, data-centric applications that leverage AI to increase engineering productivity.

Basis of Presentation and Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. The consolidated financial statements and accompanying notes have been prepared in U.S. dollars and in accordance with GAAP. The Company is party to joint ventures, which are accounted for using the equity method. All intercompany accounts and transactions have been eliminated in consolidation.

Gains and losses resulting from foreign currency transactions denominated in currencies other than the functional currency are included in Other income (expense), net in the consolidated statements of operations. The assets and liabilities of foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date, and revenue and expense amounts are translated at average rates during the period. Foreign currency translation adjustments are recorded as a component of Other comprehensive income (loss), net of taxes in the consolidated statements of comprehensive income.

Accounting Policies

The Company’s consolidated financial statements are prepared in accordance with GAAP, which require us to select accounting policies and make estimates that affect the reported amount of assets, liabilities, revenues, and expenses, and the related disclosure of contingent assets and contingent liabilities. Actual results could differ materially from these estimates.

Information on other accounting policies and methods that we use in the preparation of our consolidated financial statements are included, where applicable, in their respective footnotes that follow. Below is a discussion of accounting policies and methods used in our consolidated financial statements that are not presented within other footnotes.

Cost of Revenues — Cost of subscriptions and licenses in the consolidated statements of operations primarily include headcount‑related costs, as well as cloud‑related costs incurred for servicing the Company’s customers using cloud provisioned solutions and the Company’s license administration platform. Cost of subscriptions and licenses also include channel partner compensation for providing sales coverage to users, depreciation of property and equipment, and amortization of capitalized software costs associated with servicing software subscriptions and the Company’s ACDP described below, and amortization of intangible assets associated with acquired software and technology. Cost of services in the consolidated statements of operations primarily include headcount‑related costs, as well as depreciation of property and equipment and amortization of capitalized software costs, used for providing training, implementation, configuration, and customization services to customers.

Software Development Costs — The Company’s software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external accounts, before technological feasibility is reached, are included in Research and development in the consolidated statements of operations. Research and development expenses, which are generally expensed as incurred, primarily consist of headcount‑related costs. In general, technological feasibility is reached shortly before the release of such products.

Under its ACDP (the Company’s structured approach to an in‑house business incubator function), the Company capitalizes certain development costs related to certain projects once technological feasibility is established. Technological feasibility is established when a detailed program design has been completed and documented, the Company has established that the necessary skills, hardware, and software technology are available to produce the product, and there are no unresolved high‑risk development issues. Once the software is ready for its intended use, amortization is recorded over the software’s estimated useful life (generally three years). For the years ended December 31, 2024, 2023, and 2022, total costs capitalized under the ACDP were $3,878, $4,558, and $7,060, respectively. Additionally, for the years ended December 31, 2024, 2023, and 2022, total ACDP related amortization recorded in Cost of subscriptions and licenses in the consolidated statements of operations was $3,720, $7,711, and $6,626, respectively. The Company evaluates the recoverability of capitalized ACDP costs whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. No impairment of capitalized ACDP costs occurred for the years ended December 31, 2024 or 2022. During the year ended December 31, 2023, the Company recognized impairment charges of $1,835 related to certain ACDP projects, which were recorded as amortization expense in Cost of subscriptions and licenses in the consolidated statements of operations. As of December 31, 2024 and 2023, $12,961 and $13,148 of ACDP capitalized costs were recorded in Other assets in the consolidated balance sheets, respectively.

Advertising Expense — The Company expenses advertising costs as incurred. Advertising expense of $6,383, $5,365, and $6,888 is included in Selling and marketing in the consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022, respectively.

Cash and Cash Equivalents — The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. As of December 31, 2024 and 2023, all of the Company’s cash and cash equivalents consisted of money market funds and cash held in checking accounts maintained at various financial institutions. Cash equivalents are recorded at cost, which approximates fair value.

Accounts Receivable and Allowance for Doubtful Accounts — Accounts receivable primarily represent receivables from customers for products and services invoiced by the Company for which payment is outstanding and also unbilled accounts receivable (see Note 3). Receivables are recorded at the invoiced amount and do not bear interest.

The Company establishes an allowance for doubtful accounts for expected losses during the accounts receivable collection process. The allowance for doubtful accounts is presented separately in the consolidated balance sheets and reduces the accounts receivable balance to the net realizable value of the outstanding accounts receivable. The development of the allowance for doubtful accounts is based on an expected loss model which considers historical write‑off and recovery experience, aging trends affecting specific accounts, and general operational factors affecting all accounts. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The Company considers current economic trends and takes into account reasonable and supportable forecasts of future conditions when evaluating the adequacy of the allowance for doubtful accounts. If circumstances relating to specific customers change or unexpected changes occur in the general business environment, the Company’s estimate of the recoverability of receivables could be further adjusted.

Activity related to the Company’s allowance for doubtful accounts was as follows:


	Year Ended December 31,
	2024		2023
Balance, beginning of year	$	8,965	$	9,303
Additions to reserve	7,365		6,651
Write-offs, net of recoveries	(7,634)		(7,106)
Foreign currency translation adjustments	(301)		117
Balance, end of year	$	8,395	$	8,965

Concentration of Credit Risk — Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and cash equivalents, and receivables. To reduce credit risk, the Company performs ongoing credit evaluations of its customers and limits the amount of credit extended when deemed necessary. Generally, the Company requires no collateral from its customers. The Company maintains an allowance for potential credit losses, but historically has not experienced any significant losses related to individual customers or groups of customers in any particular industry or geographic region. No single customer accounted for more than 2% of the Company’s total revenues for the years ended December 31, 2024, 2023, or 2022.

The Company’s cash and cash equivalents are deposited with financial institutions and invested in money market funds that the Company believes are of high credit quality.

Internal-Use Software Implementation Costs — The Company has entered into cloud-based software hosting arrangements related to new internal-use information technology systems, including a new enterprise resource planning system, human capital management system, and customer relationship management system for which it incurs implementation costs. Certain costs are capitalized and included in Prepaid and other current assets or Other assets in the consolidated balance sheets, depending on the short- or long-term nature of such costs. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized internal-use software implementation costs are amortized, beginning on the date the related software is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement primarily as a component of General and administrative in the consolidated statements of operations. Options to extend the hosting arrangement are considered in determining the remaining term when it is reasonably certain that the option will be exercised. As of December 31, 2024 and 2023, capitalized internal-use software implementation costs were $18,791 and $4,779, respectively.