Bentley Systems NASDAQ: BSY opened 2026 with what executives characterized as a strong first quarter, as recurring revenue growth and cash generation remained in line with the company’s full-year outlook. Management also spent considerable time outlining how it expects artificial intelligence to reshape infrastructure engineering workflows, including new product instrumentation aimed at enabling “agentic” use of Bentley’s engineering applications through APIs.
AI strategy centers on “API consumption” and application instrumentation
Executive Chair Greg Bentley said Bentley views AI as “more a seminal opportunity than a terminal threat,” arguing that the company’s incumbency with engineering organizations and the breadth of infrastructure data stewarded in Bentley Infrastructure Cloud, ProjectWise, SYNCHRO, and AssetWise positions it well to benefit. He also pointed to Bentley’s modeling and simulation tools as “de facto standards for responsible and deterministic infrastructure engineering,” which he said should be valuable as AI is applied to design and optimization.
Greg Bentley highlighted Bentley’s Asset Analytics initiative, describing it as “spawned by AI” and “already exceeding $50 million in annual revenue run rate,” and said it is being commercialized through subscriptions “denominated in consumption per asset.” He also emphasized the company’s concentration in large enterprise customers, noting that 45% of revenue comes from 220 accounts spending more than $1 million annually, and almost two-thirds of revenue comes from 824 accounts spending more than $250,000 per year, “mostly…through E365 consumption subscriptions.”
CEO Nicholas Cumins said Bentley continues to execute AI initiatives across its portfolio, and highlighted two recent developments:
- Leadership for Asset Analytics: Cumins said Bentley hired Bryan Friehauf as General Manager for Bentley Asset Analytics, citing his prior experience at GE Vernova and Hitachi.
- Infrastructure AI initiative and MCP servers: Cumins said engagement with engineering firms and owner-operators showed “strong demand” for Bentley to instrument applications so they can power customers’ AI-driven workflows. Based on this feedback, Bentley prioritized development of APIs and Model Context Protocol (MCP) servers, and “just released an MCP server for STAAD,” its structural analysis product. Cumins said this enables an AI agent “to interact directly with STAAD to optimize the structural design at machine speed.”
In Q&A, Cumins clarified that API consumption relates to “indirect usage” of Bentley’s engineering applications—AI agents interacting with applications on behalf of users—rather than charging for access to customer data stored in Bentley Infrastructure Cloud. He said the company is discussing “a different commercial approach” for this usage pattern, potentially “API consumption based pricing, maybe token-based,” while Infrastructure Cloud pricing remains user-based “at least in the foreseeable future.”
Greg Bentley added that today Bentley monetizes “only…attended consumption,” and that the company plans to introduce API consumption while learning about costs and customer value before settling on monetization.
Customer data stewardship and Infrastructure Cloud positioning
Cumins said Bentley is not using customer data stored in Bentley Infrastructure Cloud to train its own AI models, unless explicitly directed by a customer. He described data ownership as “a very, very sensitive topic,” and said Bentley provides transparency on what data is used when training is requested. Cumins said this approach helps build trust and can influence platform selection.
Asked whether other vendors training AI on customer data creates an advantage, Cumins said Bentley sees it as a “net positive” for the company, citing customer trust and the ability to train models using synthetic data or data contributed by representative accounts.
On the technical side, Cumins said the initial phase of application instrumentation—such as the STAAD MCP server—still runs with the application “on the desktop,” with AI agent interaction occurring on local computing. Longer term, he said some workloads could move to the cloud as “true…cloud services,” with performance managed similarly to Bentley’s other cloud services.
Operational update: ARR growth, retention, and SMB momentum
Cumins reported year-over-year ARR growth of 11.5% in Q1, “in line with our expectations,” with net revenue retention steady at 109%. He said the Enterprise 365 program continues to drive growth through conversions and “flow uplift at renewals,” while noting Q1 is Bentley’s smallest quarter for renewals.
New logos contributed 300 basis points of ARR growth, “primarily within the SMB segment,” Cumins said. Through the Virtuoso SMB program, Bentley added “over 600 new logos” in Q1. He also said Bentley is seeing increasing contribution from cross-selling and upselling within existing Virtuoso accounts, while noting that the large base naturally creates “a churn dollar amount to overcome each period.” Later, Cumins said overall Virtuoso retention remains stable at a “high double-digit” level and that multi-product usage correlates with higher retention.
Sector and regional demand: resources leads, with Seequent a key driver
On sector performance, Cumins said resources was the fastest-growing sector across all geographies and that Bentley expects another strong year for Seequent, supported by improving mining fundamentals. Public works and utilities, Bentley’s largest sector, had a “solid quarter” driven by global infrastructure investment. Cumins also cited ongoing momentum at Power Line Systems from grid resiliency demand and international expansion. Industrial growth was described as solid, while commercial facilities were “relatively flat.”
Regionally, Cumins said the Americas saw solid U.S. growth supported by stable public funding for transportation, grid, and water projects, and robust private investment, particularly in resources and “AI-related data centers and power generation.” Latin America had a “standout quarter,” driven by Seequent and mining as well as increased focus on transportation. EMEA was Bentley’s fastest-growing region, with strength outside the Middle East offsetting some conflict-related project delays and consumption shifts. Asia-Pacific delivered solid growth led by India, with improved momentum in Australia; Cumins said China remains a headwind and represents about 2% of ARR.
Cumins provided additional context on Seequent, saying that since Bentley acquired the business nearly five years ago, subsurface ARR in civil infrastructure has grown “by a factor of four,” partly through cross-selling. He also said Seequent has continued to grow in mining amid increased focus on critical minerals, and described applications in geothermal energy and groundwater management. Cumins said resources is now Bentley’s second-largest sector at “more than 20%” of sector-attributable ARR and remains the fastest-growing. In Q&A, he said Bentley does not expect Seequent to accelerate further in 2026, but rather to continue at the level seen toward the end of 2025, with Q1 supporting that assumption.
Financial results: revenue growth, refined profitability metric, and cash flow outlook maintained
CFO Werner Andre reported Q1 revenue of $424 million, up 14.5% year-over-year and 11.9% in constant currency. Subscription revenues were 93% of total revenue and grew 14.7% (12.2% in constant currency). Perpetual license revenue declined 18% in constant currency, which Andre said remains “a very small part” of the business and less predictable. Services revenue rose 25.8% in constant currency, driven by “long-awaited re-acceleration in Maximo-related services” in the Cohesive business.
Andre said last-12-month recurring revenue reached $1.44 billion, up 13.3% year-over-year (11.5% in constant currency), and retention remained high with a 99% constant currency account retention rate and 109% constant currency net revenue retention. ARR ended the quarter at $1.495 billion, with constant currency ARR growth of 11.5% year-over-year and 2.5% sequentially, “all organic and in line with our expectations.”
GAAP operating income was $126 million. Andre emphasized a refined operational profitability measure introduced with the 2026 outlook—adjusted operating income less operating stock-based compensation (AOI less operating SBC)—intended to remove M&A-related volatility tied to stay bonuses. AOI less operating SBC was $141 million with a 33.2% margin, which Andre said aligned with expectations and supported the plan for annual margin improvement despite operating expenses being “more weighted towards the first half.”
Free cash flow was $188 million in Q1, which Andre said was in line with expectations given tougher comparisons from strong year-end collections in 2025 and the front-half expense weighting in 2026. On a last-12-month basis, free cash flow was $492 million, up 13%, and Andre said Bentley remains on track to meet its full-year free cash flow outlook of $500 million to $570 million.
On capital allocation, Andre said Bentley repaid $678 million of 2026 convertible notes at maturity using cash on hand and credit facility borrowings, reducing fully diluted share count by about 10.66 million shares, or 3%. The company repurchased $54 million of stock and paid $21 million in dividends. Net debt decreased by $134 million during the quarter, and leverage fell from 2.1x to 1.9x adjusted EBITDA.
After quarter end, Andre said Bentley closed a new $550 million term loan A under its credit facility accordion feature to repay revolver borrowings and lower interest cost. He said total borrowing capacity under the credit facility increased to $1.850 billion, providing flexibility ahead of 2027 notes maturity and to fund acquisitions, repurchases, and dividends.
Andre said the company remained comfortable with the 2026 outlook range provided on the Q4 call. He noted the U.S. dollar strengthened slightly versus the exchange rates assumed in the outlook, reducing Q1 revenue by about $2 million from currency changes, and that if end-of-April rates persist, Q2–Q4 GAAP revenue would be negatively impacted by about $3 million relative to the outlook assumptions.
About Bentley Systems NASDAQ: BSY
Bentley Systems, Inc is a global software provider specializing in infrastructure engineering applications for the design, construction, and operations of roads, bridges, rail and transit systems, water and wastewater networks, power plants and grids, industrial facilities, and communications infrastructure. Founded in 1984 by brothers Keith and Barry Bentley, the company is headquartered in Exton, Pennsylvania, and maintains offices and development centers across North America, Europe, Asia, and Australia.
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