Bentley Systems $BSY

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Some people may know I worked at CAD industry for a while: I actually explained a bit here (search for “my 1st employer”).

I heard about Bentley Systems many years ago, but until fairly recently, to be precise in year 2020, it came to public market. Here is their IPO prospectus filed in Sept 22, 2020. In last year or so, I traded and still own some of their stocks $BSY (note this class of stocks has less voting power compared to the Bentley families, and this is quote common in tech stocks, btw. More explanation in the next paragraph). And in last few days, the stock dropped quite a bit and I added a bit more in the last few days too.

Their main competitor includes another former employer of mine: AutoDesk $ADSK. I didn’t stay at AutoDesk as long as the 1st employer of mine. Unlike AutoDesk and many medium sized software companies, Bentley has a small quarterly dividend: 5 cent per share. Note the Bentley families still has the voting power. It’s probably one of the few family controlled software companies in the world. Many software companies are public and has no controlling shareholder: with the exception of Alphabet (Google), Meta Platform, and Hashicorp $HCP etc. Founders usually have control of the company via Dual Class Stock. In a way Berkshire Hathaway has a similar structure too: A share has way more voting power than B share, and Warren Buffett and his family has the control.

It seems they just exceeded $1 b annual revenue in year 2022 (here are the link to their annual reports in recent years).

Future and risk factors

Family control. No check and balance from outside shareholders. Note this is true for many companies. The exception is usually when a stock underperforms the market for a long time, an activist shareholder may emerge, e.g. Nelson Peltz vs. Disney at this time.

Likely lower growth or even negative growth in China, both in terms of R&D and end market. This is similar to many west/US tech companies. APAC (Asia Pacific made up about 18% of the revenue, so this is still manageable).

US recession, or no growth. Possible, but software companies usually sell products in multiple years, eventually the growth will come back, even with the economy cycle.

Competition. AutoDesk is the main competitor. Also one source said Siemens has 14% stake in Bentley. Also, do you remember MetaVerse?

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