Bentley Systems CEO Greg Bentley joins Yahoo Finance’s Zack Guzman to discuss the company’s stellar public debut.
Video Transcript
ZACK GUZMAN: This focus will be on Bentley Systems. It’s a company that provides software for construction and infrastructure progress– or projects, I should say. And the company raised $237 million by offering more than 10 million shares at $22 a share. And today that company is seeing a pop in those shares here, trading now above $30 a share, quite the pop here on day one of trading.
But it’s an interesting company, one that was founded back in the ’80s by the Bentley brothers. Who are the Bentley brothers? Well, we’ve got one on the show here today. Joining us now is Greg Bentley, Bentley Systems CEO.
And Greg, congrats on the day one pop here. I just want to dig into what the company does a bit more, because this is a profitable company, which isn’t always the case for companies in your space. But talk to me about where the growth has come from over the last couple of years as you’ve reached profitability.
GREG BENTLEY: Well it’s been 36 years in the making, Zack, so we’re not, as you say, a usual IPO. I might say as well that while we’re glad to be accomplishing this milestone, and especially because the majority of our business, the majority of infrastructure in the world and infrastructure engineering, where we’re the largest in support of that, is distributed globally. And the majority of our revenues, the majority of our colleagues are outside the US.
But they’re well aware of that IPO on the NASDAQ is the best way for a return on hard work and persistence, as in our case over these 36 years since our founding. But in our case, trading publicly isn’t an end in itself, but a means to an end, which is to reward our colleagues, whom have earned equity amounting to a third of the company’s ownership, over this period of time.
And the company hasn’t actually generated any proceeds from the offering. All of the sales are sales by our deserving colleagues to achieve a market valuation for their stock. And we owe all of our success to our colleagues and have made them all shareholders this year in anticipation of the IPO.
What we have done the last several years is what we’ve done over the 36 years is serve civil engineers, structural engineers, geotechnical engineers, and those who work with them for the project delivery and then the construction and operations and maintenance of infrastructure. So we lead the world in engineering software for roads and bridges, rail and transit, water and wastewater, structural engineering, geotechnical engineering.
But we’ve had rather a low profile over our lifetime and are glad now to come to the notice, and especially to help civil engineers and those working on infrastructure to get some credit for that as well, hopefully.
ZACK GUZMAN: And as you note, I mean, a lot of the projects that are using your services here, your software, are essential projects when we think about what’s being done out there. But as you say, a lot of that comes from outside the US.
And you highlight that a lot of your growth is coming from this APAC region, including China. Talk to me about how volatile that might be moving forward, because we talk about projects in China and the way that US-Chinese relations are stressed right now. But it does represent one of the quickest growing regions for you guys. So talk to you about expectations there, as you look to expand in this side, outside US growth areas.
GREG BENTLEY: Well, fully half of the infrastructure spending in the world will take place in Asia, 30% of that in China alone. So although it’s about 5% of our business at the moment, it’s a large portion of our opportunity. And we’re actually unique in being well-satisfied with our business and our positioning in China. We are well-established there. Everything new that we do is adopted first and fastest in China.
The Chinese also wish to be the engineers to the world, so they’re glad to embrace global software and contribute to global software standards, so haven’t had concerns about intellectual property. It is the case that there may be a worry about geopolitics, nothing we can do about that. But it hasn’t been an impediment so far.
The sort of thing we worry about at the moment is that there isn’t a public cloud infrastructure in China. We’re one of the top 25 users of Microsoft’s Azure Cloud service in the world. But in China, we have to work our way around there not being comparable cloud services in China. We in our accounts have to work harder as a result to engineer around that. And we do it.
But we’re very enthusiastic about our work in China. The Chinese do the most ambitious projects. They are eager to have their cities be digital cities and take full advantage of digital.
ZACK GUZMAN: Yeah, I will say, I mean, the thing that stands out to me here too, when we think about software space and how maybe it’s been a bit more resilient than others here, you’re still tied to very much real projects playing out in physical space and only noting about a 3% to 5% decline back in the months of March and April, when the use of your applications were down, but now rebounding to those pre-COVID-19 levels in the month of June.
But very interesting stuff, and again, a pretty big pop here on day one of trading, as shares now above $30. Thanks again for taking the time to chat with us though. Greg Bentley, Bentley Systems CEO.
GREG BENTLEY: Many thanks.
