Bentley Systems, Incorporated (BSY) Earnings Call Transcript & Summary

Thank you for joining the call today, which is the JPMorgan Equity High Touch Clients of Research Advisory or MiFID out-of-scope clients. The call is for institutional investors only. Therefore, if you are a corporate client or a member of the press, please kindly disconnect from the call. For those of you who might wish to share this presentation with other colleagues, we want to let you know that this session is being recorded, and Bentley will make it available for subsequent viewing on Bentley's Investor Relations website, investors.bentley.com. I will now pass you over to the JPMorgan host for this event, Jackson Ader.

Wonderful. Thank you very much, Connie. Good morning, everybody. As she mentioned, my name is Jackson Ader. I'm a software analyst here at JPMorgan. We are thrilled to welcome everyone to another session on our digital twin seminar. We have Greg Bentley, Founder, Chairman, President and CEO, a number of different titles at Bentley Systems; and Nicholas Cumins, Chief Product Officer. Just a quick reminder. All Q&A, if you'd like to ask Greg and Nicholas any questions, all Q&A are going to be through e-mail. So if you can -- my e-mail is on the screen, [email protected]. But I'm just going to hand it over to Greg and Nicholas. They have prepared a presentation that will last about a half hour, and then we'll jump into a kind of more of a fireside chat after that. But Greg, Nicholas, please take it away.

Good. Thank you. And I'm just going to share my screen. And we're underway. Thank you very much for your interest in particular, in infrastructure, digital twins. And of course, that's our interest. We consider ourselves at Bentley Systems for those less familiar to be the infrastructure engineering software company because that's what we've worked on since founding, in fact, by 5 Bentley brothers, and we have just surpassed $1 billion in annual revenues. And those revenues are broken down this way among the world's infrastructure classes, and we consider that we're the market leader in those segments, in green and in public works utilities overall, all of which are great opportunities for infrastructure digital twins. And we're also -- we consider the leader in structural, and geotechnical disciplines, that underlie all of those infrastructure assets, and the potential for infrastructure digital plan. So another way to look at, in fact, our own history as a company is, we began with infrastructure modeling applications. There was 1 and now many that are based on a platform. And then the simulation applications here came later, then we focused on collaboration for infrastructure project delivery, and then asset performance, and have become the most comprehensive for the infrastructure life cycle, but there's an additional opportunity because the applications for modeling and simulation especially tend to be used once during the life cycle of an infrastructure asset. They are used for a certain deliverable, and ever after they are immutable blobs that are not open to being reused for the continued resilience and adaptation of the infrastructure asset over its life cycle. So that's the opportunity for an infrastructure digital twin, if you like, across this life cycle, a cloud service that can be added incrementally to reflect up the data and functionality from all of these modeling and simulation to add intelligence over the life cycle of the infrastructure assets. So that is the infrastructure digital plan opportunity and our approach to it, it can be incrementally added to wherever our users begin. So another institutional way of looking at that beginning, if you like, as we started with computer-aided design. And then, if you like, GIS, geographic information systems, arguably went from 2D to 2.5D. We add into collaboration by way of ProjectWise and AssetWise and the 3D BIM applications, of course, which continue to advance, and always advance. But then when we introduced our cloud service for the purpose in 2015, I actually didn't use the word digital twin. I wouldn't let us use that term until it turned out a new innovation called reality modeling was introduced, and I will explain that further. That enables us, if you like, to move now to 4D digital twins for the life cycle span of this opportunity. So especially what is reality modeling? And why do I think that infrastructure digital twins are qualitatively different than product digital twins? So product digital twin could correspond to a notional abstraction, a product design at a point in time. But infrastructure consists of assets that are particular instances, and are constantly changing. So we say that an infrastructure digital twin needs to capture its digital context. Of course, it's 3D, so it's not a twin if it's not 3D on the digital side, but they don't happen to exist 3D models produced by our applications for most infrastructure assets, most are ground fields. But with reality modeling available since 2016, 1 came from overlapping imagery from photographs or laser scans where needed, 1 can process through our context capture software, the overlapping imagery into a reality mesh, which is a 3D engineering-ready model that captures the digital context that you can have and as operated 3D model for any infrastructure asset. And then the veracity of a digital twin, that's not enough for a digital twin, that's necessary but not sufficient, comes from the digital components, the engineering applications, which need to be semantically aligned, whether there are applications or any other applications. We synchronize from those semantically and especially aligning, and using machine learning to recognize the components in the reality meshes to correspond to that engineering data. And then the last thing needed after digital context and digital components, is digital chronology over the life cycle because the ledger have changes, and the pattern of changes is what's valuable in the infrastructure digital twin to provide all of these advantages and especially I'll talk about the convergence of the IT, OT and ET for this purpose. But here's an example. I'm using the example of communication towers because all the communication telcos are demanding digital twins now because they have the opportunity to add 5G capacity to their towers, every time they do that, they have to reanalyze for structural loading, and wind, and so forth. This is the process of using drone surveying to create the reality model, digital twin, which, as you see, can even be to a millimeter accuracy, depending on how many overlapping photographs are processed with our software. And then machine learning is used to recognize, in this case, the antenna equipment, and then applications to determine what the structural, and wind, and electromagnetic force interferences, and so forth so that they know what capacity they have to safely operate their towers. So you can say for a communication tower digital twin, just as an instance, of an infrastructure digital twin, it starts with the operational context captured by UAVs. It could even be, by the way, from cell phones to produce overlapping photographs. We have an app for that, if you like, for inspections in the field to create these reality measures. If you like, that would be the nervous system for this digital twin. And then the engineering logic, the engineering models that exist for the tower, and the equipment, and machine learning, to recognize and classify and correspond that, if you like, is the brain power for the digital twin. And then the heart of it, if you like, is the change ledger and the cloud service, which supports the immersive visualization and the analytics. And then a final step, we could say, is to add IoT devices. And infrastructure, IoT, I think when you look at it this way, I know some of you, as investors, will have gone through perhaps the trough of disillusionment with industrial IoT, where streams and even drown in lakes of data. We won't have that problem with infrastructure digital twins because they exist, the ET and the IT, to make sense of the frame of reference to know what's actionable and provide the insights from those IoT sensors, for instance, on the communication tower that would measure wind and seismic threats, electromagnetic phenomenon and so forth. So making the infrastructure digital twin a living digital twin with the introduction of infrastructure IoT, another example there would be -- going in the right direction here, a roadway or a bridge digital twin, and this is a project from Korea where they set about to find out for $10,000, could they sufficiently instrument a roadway bridge. And you know you can spend orders of magnitude more than that, adding sensors. But it turns out if you take advantage of the structural models that exist for the bridge, then you can use video, for instance, as Orion expensive sensors and they found that they could have infrastructure digital twins for their bridges to maintain their safety and resilience very affordably. So another living aspect potentially for infrastructure digital twins is below the surface. Earlier this year, we acquired Seequent to become the leader -- by far, it's about 10% of our company now, is for subsurface digital twins, including especially environmental factors in water seepage and flood resilience and so forth, depend on subsurface conditions. And so 1 could have, for instance, digital twins now for [ Earthen ] dams that connect all of this up, and are priceless in what they can do. So we say that this notion where the digital twin can be added wherever you start, let's say there's a project digital twin. So this example is a rare infrastructure project that made it on the front page of The Wall Street Journal for a success story 2 years after the tragic collapse of the bridge in Genoa, the replacement bridge, we can't take any credit for their rainbow in The Wall Street Journal picture here. But the bridge projects succeeded in 2 years with an architect design bridge in Italy, multimodal and ready for life cycle use of the models by virtue of a project digital twin approach using our software. Construction is always about the occupancy of space in time. So a 4D digital twin is the natural solution for infrastructure projects in that respect. And then an asset performance digital twin, in this example, this is the Center for Digital Built Britain and Cambridge, where they have a national digital twin day and shows the reality model capture, including, in this case, in their engine room, if you like, where the asset reliability environment with our software is connected up to -- for an asset performance life cycle digital twin. So to describe our platform approach to this, may I introduce our Chief Product Officer, Nicholas Cumins.

Thank you, Greg. Hello, everyone. So we believe digital twins are a paradigm shift for the infrastructure industry. They're also fundamental to the evolution of the company. Now we don't see ourselves as the infrastructure digital twin company, we see ourselves as the digital twin platform company. So I need to explain a bit. When I joined Bentley about 14 months ago, what I saw is that the company had built a great platform made of cloud services that are used to create and leverage digital twins in infrastructure workflows. What I also saw is an increasing number of use cases for potential digital twins, so much that not 1 vendor can actually address all of them. So clearly, this is about an ecosystem in order to address all of these use cases, and it does create an opportunity for us to provide a platform for that ecosystem. So our opportunity as Bentley is to be the platform for infrastructure digital twins, to be the platform of choice for infrastructure digital twins. So what is that platform? And what makes it unique? 5 things, actually. First of all, our platform is purpose-built for infrastructure digital twins. You can use some of the services independently and they provide value on their own. You could use some of the services of the platform to visualize, for example, some engineering data coming from some application without having to access that application. But of course, the beauty is to be able to leverage all these services in the context of a digital twin. Second, that platform is proven. The company has been at it for a while when I joined, and we're still investing a lot into that platform. It's proven because it is used today in multiple use cases across the infrastructure life cycle through applications that are coming from Bentley, through applications coming from partners. It is used today to power digital twin. So it's proven. Third, it's fundamentally open. The core of it, the core of the platform is open source. Why is that important? In the infrastructure industry, the life cycle of an asset, it can be 50, 100 years. So you do not want to have any vendor lock in, if you want to have a chance for your platform to be adopted by owners, operators, and other companies. It is open because of the breadth of file formats that the platform is able to ingest, whether we're talking about ET, IT or OT data, as Greg was explaining, whether we're talking about file formats that are proprietary to Bentley or other vendors, even competitors or standard formats. The platform is able to ingest all of that. And it's open in the sense that it's interoperable with other platforms, for example, Omniverse from NVIDIA. Third, it's the most advanced platform for infrastructure digital twins. At the heart of it is, its strength, its ability to synchronize, to align and to aggregate data without losing any of the quality of that data, of that engineering quality so that it can be used in engineering workflows. You might see some other platforms out there who do a fabulous job in creating a beautiful hybridization in 3D and even in 4D of an infrastructure asset through a mesh, but it will be at the expense of the quality of the data. And therefore, that representation cannot be used in engineering workflows. Well, that's not the case with the iTwin platform. We make sure that as we synchronize and align and aggregate that data, we're not losing any of that quality. And along the way, of course, we're tracking all of the changes to that data. So you can roll it back to understand who changed what for what reason, you can roll it forward to address questions, what happens if and so on and so forth. And last piece, last point, is flexibility. The platform can be used to create a digital twin from a design model or simply by capturing reality. It is flexible in the sense that it runs on public, and cloud, and private account, platforms. Our default public cloud platform is Azure, but you could run it also into a private cloud platform like Azure government cloud. And it's flexible because of its pricing model. It is based on consumption. You only pay for what you use. Next slide, please. So if I look at the history of Bentley, this is not the first time we've been building a platform. In fact, our first platform was MicroStation, and Bentley had an ecosystem of [ ICs ] creating vertical applications based on MicroStation. But what we're talking about now is building a platform and an ecosystem, which is in order of magnitude more sophisticated, broader than what we had with MicroStation. Because we are talking about an ecosystem of partners creating solutions that cover the full scope of the life cycle of the infrastructure, not just 3D design applications in design engineering, but digital twin solutions in construction or even in operations, which is where actually 80% of the life cycle cost of the infrastructures are incurred. Next slide, please. So the approach we're taking to building up that ecosystem, first and foremost, is comprehensive, because we intend to move the entire industry forward together with our partners. We are reaching out and working with strategic partners such as Microsoft, Siemens, knowledge partners such as the Digital Twin Consortium, of which we are a founding member, system integrators, digital integrators, and [ ISVs ]. Now it's a long-term play for sure, how long, how far out? We are at the start of our journey. And we know that it's going to be a marathon. It's not going to be a sprint. Next slide, please. So in order to ramp up the [ ISVs ] part of the ecosystem, we've established the iTwin ventures on to invest $100 million in start-ups early-stage companies to evangelize the use of iTwin platform to create digital twin applications. And we're on track to meet our first year goals. We just announced actually investments into 2 companies, [indiscernible] We've also launched iTwin ecosystem sponsorship program where we offer grants to both [ IVs ] to create digital twin application using the iTwin platform and also 2 system integrators so that they can build up their team, their skills in leveraging the iTwin platform to create digital twin solutions. Next slide. Now the infrastructure industry is at a pivotal moment build back better, means obviously building better infrastructure, but it also means building better and building better means building digitally. So 1 of the most fundamental changes in our industry is the role of the engineering firms. They are truly going digital. So what do we mean by that? Increasingly, when they hand over the infrastructure asset at the end of the project, they are handing over a digital twin of that asset. And in fact, in a recent survey, almost 40% of the CEOs of engineering firms expect that in 3 years, their clients will require that they deliver digital twins, and simulation results together with infrastructure assets. Now many of them are actually going 1 step beyond. They're going beyond the handover of the infrastructure asset, and the digital twin to the owners and operators. They are offering digital services to the owners and operators powered by digital twins. In fact, almost 50% of the CEOs of the same engineering firms expect digital twins to be the most valuable in operations in 2024. So what are they doing? They're establishing digital business units, they're actually truly becoming digital integrators. Now when I talk to CIOs and CTOs of these digital business units of these newly formed digital integrators of these engineering firms, I will tell them that they shouldn't have to resort to DIY, to do it yourself. I tell them that they should leverage our platform and focus on creating these digital twin solutions on top, especially as all of them will say that their #1 challenge is their ability to attract and retain talent. You have to be able to do more with less, they have to be able to do more with the team that they have at hand. And therefore, it will be a waste of their time and effort to build everything from scratch. So we encourage them, of course, to use the iTwin platform to create their solutions. Now digital twin solutions are a way for engineering firms to leverage their domain expertise, their proprietary analytics, and even to innovate on their own business model by taking responsibility for the outcomes of the infrastructure assets. They are uniquely positioned to do this. We think this can be a significant enhancement to the enterprise value. Now we serve as a platform for that transformation to them. We are not at all into the data business. We are not into the analytics business. We are truly a platform business. Back to you, Greg.

Thank you, Nicholas, and I'd like to conclude here with helping you as investors to be oriented and calibrate, how far this has come, infrastructure digital twins. So first of all, we have a Going Digital Award series that's part of our year-end infrastructure virtual event that's going on now. So hundreds of our accounts nominate their projects for going digital awards. Independent juries boil it down to 57 finalists in these 19 categories that are shown here. And I want to report that this year, 36% of the finalists credit reality modeling, the continuous surveying process I described from overlapping imagery to start with the reality mesh and engineer to that, capturing in effect the beginning of a digital twin. So that's 36%, significantly up. This didn't exist, wasn't possible 5 years ago. There's 1 in particular I'd like to bring to your attention because it won the next reality award within Microsoft U.S. this year at their Ignite conference and it has to do with bridge inspection. So in the upper left here is the way it's traditionally been done on this bridge in Minnesota, an engineering firm used reality modeling, our context capture, and the Microsoft mixed reality, including halloween, as you can see in the lower right, to a step change in improvement in bridge inspection can be pertained to any bridge or any asset actually. And so it's main strength now on the main stage for Microsoft. And of course, this enables the engineer to be virtualize and do -- the right engineer do a better job of inspection and resilience of such infrastructure assets as this. And then coming right up to the present, this week, if we all wondered what Jensen of NVIDIA would reveal, it was our iTwin for the NVIDIA Omniverse, and we all want to be well versed in this. I'm going to show on the right iTwin for the Omniverse in the case of the design of a rail station. On the left, is the Unreal Engine. So all of these immersive environments, the better they get, the more valuable digital twins are, and the immersive environments in these metaverses and omniverses are great for 3D visualization and navigating scenes, which could be actual infrastructure. But for infrastructure, engineering you would like a 4D visualization as you see, for instance, on the left, with a time slider that needs the iTwin platform and its ledger of changes of the physical and engineering reality over the life cycle of the infrastructure. So we're unique in being able to do that, and eager to do that with all of these last mile go-to-market visualization that can be for the visualization environments when used with the iTwin platform. And then there was reference to the news of the day, of course, the UN Climate Conference in Glasgow is prioritizing the work for civil, and structural, and geotechnical engineers. But here is Goldman Sachs estimate of $6 trillion a year needed annually in investment to meet those goals. You could translate those to our areas of market leadership. Now those are needs, but in the U.S. finally, we have incremental investment for infrastructure. This incremental investment can likewise be mapped to these needs. The point is, even if you had all of that investment, you could only add a bit of capacity to our existing infrastructure. The infrastructure we depend upon for all goals, including energy transition, resilience, and adaptation, is the infrastructure we have today, and infrastructure digital twins, are the most economical way to capture and increase their fitness for purpose, taking advantage of the modeling and simulation that already exists for most of these assets and making it available in ways that, I'm going to suggest, could be priceless. So we don't know forensically what were the reasons for disasters such as this 1 yet or I don't know, probably had to do with some subsurface conditions, some construction inspection issues, and aging and deterioration. But if there would be a living digital twin, I'm confident that we could avert such disasters infrastructure as occurred in our own country this summer, and elsewhere in the world this month. So I want to conclude here with examples. These are the 26% of this year's finalists and Going Digital Awards who credit explicitly our iTwin platform for their digital twin endeavors. And here are, to start with, a bunch of them, which -- where the projects absolutely had to be done during the pandemic years. So they advanced ahead in adoption of digital twin so that they could work virtually everywhere and with everyone to get this done. An example here, I think, on the lower right is the world cup soccer for younger players. So they couldn't have gotten that project done during the pandemic without digital twins, and advance that significantly. This set of examples are those having to do with 4D construction modeling, and that jumped ahead in a pandemic where you couldn't be literally on the job site and where distancing was important. So the top 2 are in Singapore are always at the lead in going digital, and then the lower left in actually the U.S., believe it or not. And then in the lower right, this is the project, I think, in Switzerland for international consortium of fusion energy. And then the last examples I'd like to show you, if I can advance the final slide, are examples in China. So China, everything we do is adopted first and fastest in China, including for infrastructure digital twins where they use their private cloud environments. And this is the way that projects are done at the scale of scope and innovation in China. China would like to be the engineers to the world. Digital twins should enable the rest of us to catch up in ambition and scope because with digital twins, infrastructure engineers can work on projects anywhere, and especially for the resilience and adaptation of our existing infrastructure. So with that, Nicholas and I would welcome your questions. Jackson, back to you.

That's great. Greg, Nicholas, thank you so much for that. Okay. So Greg, I think if you want to -- you can stop sharing your screen, that way we can all there we go. And now they can see us in the full screen. So there's a bunch that I want to follow up on. And probably if we just start. Fundamentally, there was 1 thing that you mentioned about the trough of disillusionment with digital twin or the IoT in product or discrete or what people think of as non-infrastructure.

Industrial IoT, if you like.

Sure. And your point was that actually in infrastructure, you don't expect to go through that trough. And you mentioned a couple of reasons why. But could we just go into a little bit more detail what gives you the confidence there? And why is there such a difference?

Well, we're later in it. So the Army Corps of Engineers is 1 of our largest users in the world and responsible for a lot of the infrastructure in the U.S. The Army Corps of Engineers says that this is the year of sensors and IoT in the U.S. So you're starting it in 2022 when these approaches for digital twins have now ripened so that we can bring the OT, the sensors together. In fact, we have software to drag and drop them into a digital twin with an existing 3D model, and where we can capture and semantically align and open for analytics the engineering applications as well. I think industrial IoT, you just started with sensors before this greater maturity had been possible. Even 5 or 6 years ago, it would not have been possible for the reasons I described to have an infrastructure digital trend because you couldn't have the as operated 3D model and the exact operating conditions. Now not only can you have the as-operated 3D model, and continuously survey it, because all you need to do is send the drones up again in the same flight pattern and so forth, and then record the differences, look at the corrosion advancing and so forth, from machine learning and bring any needed interventions to the attention of the engineers. But then they can jump into these immersive visualization environment ,and find all the engineering information they wouldn't even have looked for before because I knew they couldn't find it to be able to find it immersively in the 3D as operated digital twin that's familiar with them. These, I think, are opportunities that industrial IoT didn't have that way of being sure, that how you put the sensor information into the context of what was engineered, and does it -- is it an exception to react to or not? I think that the work of infrastructure engineers now will include designing the sensor environments and triggers and so forth in a digital twin.

Got you. Now does Bentley have their own, like you said, finding the trigger or the anomaly in the real-time data coming from the sensors in the field? Have you developed your own kind of predictive maintenance or algorithms there? Or can customers maybe go outside the company and get some solutions that way?

Well, of course, it's all about an ecosystem, but we are the leaders in software for asset reliability. According to ARC, we're by far the leader. And so we have many applications to do with, I'd like to say APM would be asset performance management. I say it means asset performance modeling where you use the engineering for reliability strategies. So we are a leader in that. What we don't do is work order management to respond to that. We work with for instance, the Maximo environment to connect that up. So it's all about an ecosystem, but engineering asset performance modeling, we are rather advanced in our own right on that.

Should we be thinking then that -- I mean, is it your expectation that because the infrastructure digital twins are -- like you said, you let the industrial IoT a kind of work out some of the kinks, right? And now we're starting a little bit later. Do you expect the growth rate of use cases or just overall use of digital twin to be faster or greater in infrastructure rather than the traditional industrial IoT?

Okay. Well, this is why I tried to -- for investors to see we're at 26% with up of the winning, of the finalist projects. We're at 36%, where you have the as-operated 3D model that could give rise to a digital trend. So I do not wish to overstate the pace at which we move in infrastructure. I like to say -- people ask, well, why the software, why is going digital slower in infrastructure than it is in product and part management. And I say, because infrastructure organizations aren't R&D organizations. They are public works, it's governments and so forth. And then the engineering firms that do have the work, that's half of our business. The other half is [indiscernible]. They're not R&D organizations either. So we do a lot of the R&D for going digital and we can push what we can't pull. That's why it's really important that the engineering firms now want to improve their own business model so that they don't only sell their hours doing project delivery, but have a longitudinal recurring revenue subscription opportunity by being the creators and the curators of the digital twin services. So we'll simply be the platform behind their white labeling of our infrastructure digital twins with their own proprietary analytics and brands as whole. That will help us sell to the owner operators at a greater rate, which is what it takes to catch up to that potential. So it's still early, but I used the example of communication towers because all the world's communication towers are now owned by special purpose towercos who have purchased the assets from the carriers, and are now sharing the towers across multiple carriers. And they are very motivated in going digital. They need to know what their inventory is, how much they can add their revenue potential. And it enables, of course, the rest of going digital. We can't do that without the communication towers adding capacity for 5G and so forth. So that is going very quickly. And on our own operating results call earlier this week, we reported a jump in our new business growth rate from a multimillion dollar ARR accretion and communication tower operators. So what they're doing is exactly what should apply to every other infrastructure asset in turn. The drone surveying, the machine learning, the corrosion management, the engineering, remodeling as -- it's the same game plan, but communication towers are on the run. Everyone else has got to catch up over a period of time, which I think is during the coming decade.

Great. Nicholas, I think it was in your portion of the presentation when you were talking about the ventures, the iTwin Ventures and that you have actually incorporate, I think, brought 2 of those partners in-house and acquired them recently. And so I'm curious, I assume you look at that venture as a -- see what the usage is and maybe bring some people in-house. But I'm just curious, first of all, I mean, do I have that characterization right? And then secondly, what's the make versus buy decision like, especially when you're talking about technology that's tuck-in or unproven at this point, I guess, in terms of its commerciality.

Yes. Well, you -- I think you did explain it well in a sense that, yes, we are using the investment funds to really seed the market with more companies using our technology. And then we're learning from that also on how they're using the technology on what works, what can be done better, et cetera. The primary intent is not actually to find companies that we could potentially acquire. Now this will be the case in the longer run right now, but that's not the primary intent. The primary intent is really to see the market to help [ ISVs ] adopt the platform and then get all the learnings along the way on our site.

And the 2 examples that Nicholas mentioned, [indiscernible] are only minority investments on our part. They are not acquisitions.

Correct. Now on the other hand, I think if you followed our company, we've been quite active in acquisitions that complement the platform. Greg mentioned a very large acquisition we made with Seequent, which is all about getting a better understanding of what's happening under the ground, which helps us be so much more performance with the engineering construction project themselves, and then with the performance of the asset itself, with just a better understanding of what lies beneath. Greg also mentioned acquisitions of Sensemetrics and Vista Data Vision, which is an additional IoT layer that we're bringing to the platform. So those are 2 activities, right? 1 is to really see the market, invest minority in some of companies to encourage them to use the iTwin platform. Another 1 is constantly on the local, for technology that will be needed in order to accelerate our strategy when it comes to the iTwin platform.

Are there any things within the product -- either the product portfolio or maybe or use case wise that you feel still has room for Bentley to either build out or acquire to a kind of round out your positioning in the space?

I mean the -- I think I mentioned it, the number of use cases of digital twins is growing very rapidly. And what I mean by the number is really just the sheer scope. There are new use cases that come up, they keep taking us by surprise. So of course, along the way, we learn about how we need to evolve our platform to better support those use cases. And that's why we're always on the lookout in need for some technology that could be built or that could be acquired in order to make the platform stronger and support those use cases.

Now 1 of the things about expanding the platform is that I imagine you're also bumping up against different competitors or new competitors. So when I hear -- when we saw the Seequent acquisition, I thought, okay, that a kind of sounds like Hexagon, right? Or when you're talking about certain infrastructure projects, I think to myself, "Okay, that sounds like Autodesk." So I'm curious, who do you see as your core competitors across the platform? And then by extension, by extending the platform, are you indeed bumping into some competitors that you might not have 5, 10 years ago?

We really see ourselves as the infrastructure digital twin platform, purpose sale for infrastructure digital twin. For sure, we're going to run into other platform with capabilities that can overlap with ours. For sure. You mentioned some of the competitors who are also investing in digital twins. We actually welcome that. We really see that more as a proof of where the market is going, as an endorsement. But we really have a the platform, which is purpose built for infrastructure digital twins. What makes us unique? I commented on that a bit. Besides the fact that we're purpose-built, that platform is really used today. It's really proven and it's established. It is powering multiple applications from Bentley and foreign partners alike. Its ability to bring together all sorts of different data to really align it with high-level precision, engineering precision, and it's our fundamental commitment to openness.

1 of the things you mentioned about -- and I definitely want to get into the infrastructure bill in a minute. But before we get there, one of the things I think, Greg, you mentioned was that building back better means like building better as well, and that engineering companies are going to be handed over more than just like, "Okay, here's the blueprint and good bye." Could I possibly -- between fatigue solvers and structural simulation, could I, instead of needing the real-time 4D digital twin, could I cobble together some collection of solvers and simulation tools to say, "Well, I really I can kind of simulate how this infrastructure plan is going to look over the next fill in the blank number of years." And do people try that rather than adopting your software?

Well, no, I don't think so, but a huge opportunity -- Just to talk about structural and solvers, that's a kind of an image that can come to mind as the bridge ages or suffers collision damage and so forth. Very interesting counterpart to that is water systems underground and that start to leak and so forth. There exists the engineering models for these assets, but the engineering models are models of the way it was meant to be built, maybe even it wasn't built that way. But certainly, it's corroded, damaged, and so forth. But if you -- and you would want to say, "Well, how do we know if it was designed with 8-inch members, but they look rusty and so forth, is it still safe?" We have the original engineering model, but you run the engineering, we are like a visual engineering model on the original dimensions, it's going to tell you it's safe. So the answer is a strategy where you recalibrate the existing model. And it turns out that -- I use example of bridges, and their counter corresponding example below ground with measuring capacities, and actual observed pressure is in a water system. But suppose it's a bridge, use video to watch the bridge deflect as a truck goes over it. You use machine learning to say how heavy was that truck based on how squished the tires were. Then you back into if it was -- you've got to rerun the model to say, what does it act like the capacity of that 8-inch number is, and it might act like it's now a 6-inch number given the fatigue. And then you say, okay, well, now is it's still safe, recalibrate. So those are just examples. Genetic algorithms are used to converge to what is the recalibration of the model. It's a whole aspect of science that becomes important now that you can actually observe. And so when we talk about sensors, and cameras, and video, and so forth, just embedded cameras ultimately will be -- there will be cameras everywhere in what we do. They may be there for consumer purposes or otherwise, but we'll have constant inputs to be able to -- the point is the original engineering information, the ET, the brainpower for the digital twin, you can't be without that. And it's synchronizing that, aligning it semantically. So the applications you're describing, the simulation applications, the BIM and modeling at, those can continue to advance. There's no reason to change those. Nothing needs to start over. We'll have this cloud service layer that puts this reverse and inverse modeling. When Nicholas talks about subsurface conditions, what's above the ground, we can see it's deterministic. What's below the ground, we can't see, so it's probabilistic. And the way you put those together, because it's that combination that determines the safety and when every city will flood, we just don't when, what is at risk, how do you harden infrastructure assets against environmental threats and so forth. It just all comes together in ways that this -- what makes it possible is finally being able to have the engineering that will not be trapped in inscrutable format, but rather be opened up to this analytics. The analytics I'm describing is the future stuff of infrastructure engineering. When their tasks get automated by our better software all the time, this is what infrastructure engineers will primarily work on is analytics for better performance. And I thought you were going to ask the question, would it be possible to have a business model where they get paid for how much throughput occurs in the train station or what's the uptime of the metro, and so forth. And just work out their own analytics to improve that. I think that time will come when these things are possible, and the challenges are so important to quality of life, it will ultimately come about. It will benefit a whole ecosystem and not only us, but the iTwin platform to provide this semantic alignment, spatial alignment, synchronization. And then the immersive visualization, we'll be using everyone's technologies for that. But it is adding the change ledger of time, over time that corresponds to the project planning, the design reviews, and then the construction modeling. The 4D modeling is really important in construction because if the construction modeling starts all over again, you'll lose the engineering modeling that was done during the design stage. So that's why we work on all of this at once comprehensively for the big opportunity.

Okay. So we only have a couple of minutes left. So I'll leave the infrastructure bill. You guys talked about it on your last quarter earnings call. So I encourage investors, if you want to get more into, reads on that, just go back to the transcript on the earnings folks. We don't have time here. But 1 question I did have -- so you mentioned construction. How does the Bentley platform interact with some of the major a kind of the project management of the construction of these infrastructure -- of these infrastructure projects? And does that feed back into your iTwin platform?

The low-hanging fruit in construction is 4D modeling. So we say construction era, the engineering and the construction should be considered together. Dumbing down 3D designs to 2D digital paper for construction is an approach that we don't need to help with. It's enriching the 3D design to a 4D construction sequence, which is digital plan. The digital plan is of the essence in making headway and actually reducing risk and improving visibility during construction. So there's a lot of construction digital initiatives that are working on going from 3D to 2D. What we're working on is going from 3D to 4D. That's ultimately where it winds up.

Why not have a Bentley construction management or project management solution that can handle the 3D and 4D digital twin, so that someone can actually be on the construction site and not have to dumb it down?

Well, we want to do that for the substantive modeling and construction and the industrialization of modular construction. That if you're going to industrialize construction, so not everything is one-off, and the simulation, the digital twin of how it comes together, is of the essence. You can see the interfaces and so forth. And industrial has actually made some considerable progress in that. But on construction administration, there are good solutions. We just generally don't work on administration sorts of things. We would rely on an ecosystem for that as well.

Okay. Awesome. All right. We're a little over time. This was great. Greg, Nicholas, thank you so much, and thanks for the presentation. I thought it was wonderful. But we really appreciate everybody joining us this morning, and really appreciate Bentley's participation.

We appreciate everyone's interest. And we'll be sure to have a version. I know the Internet goes up and down a bit with our many visualizations. We'll be sure that the version on our website doesn't have any hiccups, and people can go back and review there as they would like. Thank you.

Great. Thank you.