Sitikantha Panigrahi: Great, congrats on the quarter and very impressed with margin and cash flow. Thank you.
Eric Boyer: Thanks and the next question comes from Clarke Jeffries from Piper Sandler.
Clarke Jeffries: Hello, can you hear me.
Greg Bentley: Yes.
Clarke Jeffries: Thank you for taking the question. You know Greg, I noticed that you mentioned you’ll be overseeing the asset analytics opportunity and the prior question you mentioned moving the needle with some of these opportunities and if they will be lumpy. I just wanted to ask, are there any other near-term 2024 opportunities and I think, specifically, do you plan to accelerate the industrial or vertical coverage for asset analytics as a business model, any preview of expansion beyond Blyncsy and cell towers that we’ve already talked about?
Greg Bentley: Well, we have said that our programmatic acquisition priorities this year will be in this asset analytics space. We have — we’re working on consolidating our offerings there so that we can leverage and share platform capabilities, including the processing economics of AI and inspection and to produce insights and we’re going to get very, very good at how reliable and fast and efficient is our processing. It’s our way of participating in the AI workloads, if you like, the compute load and we want to have multiple vertical offerings where we have, as you say only towers and Blyncsy so far. We’ll target others, for instance, transmission and distribution infrastructure. And we know there are the types of small companies that we had previously been participating in through our iTwin Ventures fund in small investments.
We’re more interested now in outright acquisitions as in the case of Blyncsy and incorporating them to take advantage of these economies of scale. One of the other aspects of economies of scale and asset analytics is offering to the engineering firms who are ahead of our business. So they should be in the asset analytics business with their own proprietary analytics laid on to the processes that produce the instant on Digital Twin insights, where they can add their knowledge of particular assets and their services to interpret and prescribe and perhaps even design and construct the resulting improvements in operations and maintenance to be able to offer them a full menu for any asset type where they may be the incumbent engineers serving the owners.
We want to help get them quickly into the business where they don’t have to set up their own back office to do the processing and learn the technology of the AI. Ultimately, those go-to-market is leveraged in that respect and technology back office and the other respects. So we have big eyes and you might say, a big appetite to accomplish some more investments, including acquisitions, but we will also make as well as buying in the asset analytics area. We see it as all upside and we have a good head start now that has really reinforced our intention to invest there. But investing corresponding with the ARR growth we gained from all things we have already.
Clarke Jeffries: So yes, shared infrastructure investments this year, but definitely ARR opportunity as well alongside it. Thank you very much.
Eric Boyer: Thanks Clarke, next question comes from Kristine Owen from Oppenheimer.
Kristen Owen: Great, thank you for taking the questions and good morning. Congratulations both Greg and Nicholas. I wanted to ask about the resources growth and ask you to maybe double-click on that, help us understand how much of that portfolio today is CAPEX versus OPEX activity and any updates that you could share on cross-selling synergies for Seequent across the broader portfolio?
Nicholas Cumins: Yes, the majority of our business in resources is mining. The rest of the resources sector performed as in previous quarters. But in fact, mining also performed as in the previous quarter, which is there is still a slowdown in investments in new mines or major expansion of existing mine. Now the interesting thing is even with that slowdown, Seequent in mining is still growing faster than the company average, right. So it’s still actually a growth driver for us, even in other environments. And that’s because Seequent is not just used just for exploration of new mines or major expansions of existing mines, but throughout mine operations. And in fact, we are a bit taking advantage, so to speak, of the slowdown to strengthen our position with existing accounts.
There’s such a pressure to be more efficient. That’s fantastic for an incumbent to strengthen the position. And we are overlaying this with more investments from a product standpoint and specifically for mining operations. Now within Seequent, so the majority of the revenue of Seequent is also in mining. But the fastest growth part is actually civil, as I commented in the prepared remarks. And that’s also a continuation of what we’ve seen in Q4. What’s very interesting here is that not only is the geotechnical product business growing and you could argue, well, that was the historical business that Bentley had for the subsurface that we transferred to Seequent. But what’s more interesting, I think, is the geomodeling piece of civil is growing very fast.
Leapfrog Works, which I referred to, this is the adaptation of the core product of Seequent called Leapfrog for the civil industry. And here, we’re literally creating a market, right. And the value proposition we have is just very unique and very strong. It’s because of a better understanding of the subsurface. We can reduce the financial risk, we can use the — reduce the technical risk of project delivery. We can also improve the carbon footprint. And then the other part of the Seequent business is in energy, energy transition, in particular. It must have been almost two years ago, I commented on Seequent software being used for geothermal. And that’s a strong part of the business, but Seequent software is used more and more for offshore wind platforms as well to have a better understanding of the subsea subsurface conditions if you’re going to do fixed foundations for these offshore platforms, yes.
So tremendous growth opportunities beyond mining with civil and with energy, but mining itself, even in the context of a slowdown, we’re growing very well.
Eric Boyer: Thanks Kristen. The next question comes from Jay Vleeschhouwer from Griffin Securities. [Multiple Speakers]
Jay Vleeschhouwer: Sorry about that. So I’d like to ask a question about portfolio management. Last fall, you spoke at the Infrastructure Conference about a number of new industry solutions. I believe the number was eight at the time. More broadly, over the last year or so, we’ve spoken, Nicholas, you and I, of your intent to simplify the portfolio, particularly with respect to the number of open modules you have trying to improve the salability, for example, through the channel. The question therefore is, can you update us on how the progress of portfolio simplification or reconfiguration is progressing and as that occurs, do you think that could play into some effects on consumption or that is to say, might simplification improve consumption over time?
Nicholas Cumins: Absolutely because as we simplify the portfolio, we simplify the way our accounts or users can discover new capabilities that I can benefit from. So we remove friction in that discovery process. We make it as easy as possible for them to understand how else Bentley can help. So that’s indeed one of the main reasons for the simplification of the portfolio. And simplification of the portfolio, just to make it clear to the audience, we’re not part of that conversation that we had, Jay. It doesn’t mean that we are reducing our coverage or comprehensiveness, not at all, right. Our portfolio comprehensiveness is what makes us very distinct. What we mean by portfolio simplification is just how can we make it easier to discover the breadth and depth of capabilities that Bentley has to offer.
And it’s true that the main mechanism that we use in order to simplify that portfolio is the industry lens. And it’s both a lens that we’re using from a go-to-market standpoint. So it’s easier for you to discover for a given industry such as, I don’t know, electric utilities or water utilities, what Bentley has to offer, but we also use it from a product standpoint to make sure that our products integrate great with non-Bentley software, but they integrate even better with Bentley software. And that’s when we come into industry solutions specifically, the eight that you were referring to, Jay, there’s another one that we launched just a couple of months ago called Electric Distribution Design. We did that at DISTRIBUTECH. And this is a bit of an obstruction, if you will, on top of many capabilities that we have, where we test the integration and we ensure the true synergies between our product capabilities to help solve a given industry business problem.
Greg Bentley: Just a little commercial for my asset analytics question. I say mine because I’m going to be hanging on to that for a bit after the CEO transition. The idea there is where we had, had a broad set of offerings. For instance, we talk about the solutions for dam safety, let us say. For those asset types where we can package it up to a standard price per asset to generate the AI insights. And we’ve so far done that with communication towers, obviously, and now with miles of roadway, where, for instance, the new offering we were talking about here is crowd-sourced imagery to identify the reflectivity of the lines, that how often do they need to be repainted, where it can be boiled down to something which can be programmatically delivered on a standard menu at a standard price.
We can package that up into asset analytics and have it be instant on for any engineering firm that wants to add that, offer that plus more to their own accounts. So we’re trying to find that which can be most digestible and there’s a lot more in common with communication towers from one to the next and roadway miles from one to the next, than there is for dams. So we’re imagining we can add more asset types to the asset analytics menu, the instant on menu to yet try more so to shorten the sales cycle and increase the pace of monetization. But that’s in addition to what Nicholas has described on the Industry Solutions side.
Jay Vleeschhouwer: Thank you very much.
Eric Boyer: Thanks Jay. Next question comes from Michael Funk from Bank of America.
