Digitization, ARR Growth Help Bentley Clock 21% Q2 Revenue Growth; Raises FY21 Revenue Outlook

Bentley Systems Inc BSY reported second-quarter FY21 revenue growth of 21% year-on-year to $222.9 million, beating the analyst consensus of $212.4 million.
Segments: Revenues from Subscriptions rose 17.6% Y/Y to $185.5 million, Services increased 83% Y/Y to $26.1 million, and Perpetual licenses declined 8% Y/Y to $11.4 million.
Annualized Recurring Revenue (ARR) grew 23% Y/Y to $882.4 million in constant currency.
Adjusted EPS of $0.23 beat the analyst consensus of $0.14.
Margins: The gross margin contracted 406 bps as costs shot up 45.6% Y/Y. The adjusted EBITDA margin contracted 30 bps to 30.9% as expenses rose 33.3% Y/Y.
Bentley Systems generated $16.2 million in operating cash flow and held $131.2 million in cash and equivalents. It generated $149 million in operating cash flow during the six months ended Jun. 30.
Outlook: Bentley raised FY21 revenue guidance from $895 million – $920 million to $945 million – $960 million above the analyst consensus of $917.3 million.
It increased the constant currency ARR growth rate from 8% – 10% to 22% – 24%.
Price Action: BSY shares closed at $64.41 on Tuesday.

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