Bentley Systems Q4 Earnings Call Highlights

Key Points

• 2025 results: Revenue was $1.502 billion (up ~11% reported, 10% constant currency) with subscription revenue up ~13% and comprising 92% of sales; adjusted operating income less stock‑based comp was $430 million (28.6% margin) and free cash flow totaled $520 million (up 24%).
• 2026 outlook: Management guides constant‑currency revenue growth of 11%–13% (to $1.685B–$1.715B) and ARR growth of 10.5%–12.5%, with adjusted operating income less operating SBC of $495M–$510M, free cash flow of ~$500M–$570M, and capacity for dividends, buybacks and up to $400M/year of programmatic M&A.
• AI and data strategy: Bentley plans to embed AI across products (Open Applications, Asset Analytics) and use ProjectWise/iTwin as an AI‑ready data foundation, while giving customers control over whether their proprietary data is used for model training via a Data Agreement Registry.

Bentley Systems NASDAQ: BSY executives used the company’s fourth-quarter earnings call to highlight steady subscription-led growth in 2025, a financial outlook calling for continued low double-digit momentum in 2026, and what leadership described as a long-term opportunity to apply artificial intelligence across infrastructure engineering workflows.

2025 results: subscription growth and margin expansion

For full-year 2025, CFO Werner Andre said total revenue was $1.502 billion, up 11% on a reported basis and 10% in constant currency. Fourth-quarter revenue was $392 million, increasing 12% reported and 10% in constant currency.

Andre said subscription revenue remained the primary driver, rising 13% reported (12% constant currency) for the full year, and 13% reported (11% constant currency) in the fourth quarter. Subscription revenue accounted for 92% of total revenue, up from 2024. He added that E365 represented 45% of subscription revenue, up from 42% in 2024.

Other revenue categories were mixed. Andre said perpetual license revenue was essentially flat for both the quarter and year, while service revenue declined 6% reported (7% constant currency) for the year, with a modest increase in the fourth quarter.

On profitability, Andre reported GAAP operating income of $79 million in Q4 and $363 million for the year. Adjusted operating income less stock-based compensation (SBC) was $94 million in Q4, representing a 24.1% margin, and $430 million for the year, up 16% with a 28.6% margin. He said the full-year result reflected 110 basis points of margin improvement, consistent with the company’s outlook.

Free cash flow for 2025 totaled $520 million, up 24% year-over-year. Andre noted Q4 collections were particularly strong and emphasized that the fourth quarter is Bentley’s largest renewal period, which can introduce year-to-year variability based on the timing of collections.

ARR, retention, and new logo activity

CEO Nicholas Cumins said fourth-quarter annual recurring revenue (ARR) increased 11.5% year-over-year in constant currency, with net revenue retention stable at 109%. He added that Bentley again contributed 300 basis points of ARR growth from new logos, primarily in the SMB segment, and said the company has added at least 600 new SMB logos through its online store for 16 consecutive quarters.

Andre said Bentley ended Q4 with ARR of $1.462 billion at quarter-end spot rates and posted sequential quarterly ARR growth of 4%, which he said aligned with expectations given typical fourth-quarter seasonality and the timing of asset analytics deals and programmatic acquisitions. For the full year, he said M&A contributed less than 40 basis points to ARR growth.

Andre also cited last-twelve-month recurring revenue growth of 12% year-over-year, representing 93% of total revenue, and said constant-currency account retention was 99%.

Sector and regional demand: resources and utilities lead

Cumins described resources as Bentley’s fastest-growing sector in Q4, highlighting Seequent’s role in expanding the company’s addressable market into mining, new energy sources, and groundwater. He said Seequent’s performance during a mining slowdown demonstrated resilience because it is “deeply embedded in operational workflows rather than cyclical capital projects,” and he expressed confidence it would remain a growth engine as market conditions improve.

Public works and utilities, Bentley’s largest sector, delivered another quarter of strong growth, driven by global infrastructure investment and what Cumins called standout performance from Bentley Asset Analytics. He also pointed to Power Line Systems benefiting from demand for grid resilience and increased power generation. Industrial growth was described as solid, while commercial facilities were relatively flat.

Regionally, Cumins said the Americas delivered strong growth, supported by a favorable U.S. infrastructure investment backdrop and large project backlogs. He said private investment in data centers—driven by AI compute demand—was also creating tailwinds for infrastructure engineering applications, particularly for power and water networks. In EMEA, growth was led again by the Middle East, while Europe delivered a strong quarter; the U.K. was softer due to product pauses earlier in 2025, though Cumins said the design and engineering pipeline was improving. In Asia Pacific, India grew solidly, China (about 2% of ARR) remained impacted by economic and geopolitical headwinds, and Australia showed signs of recovery.

In response to a question on macro assumptions, Cumins said the company’s 2026 guidance assumes a demand environment “remarkably consistent” with 2025, noting that the main slowdown in recent years had been in facilities and commercial buildings.

AI strategy: product embedding, platform instrumentation, and data stewardship

Executive Chair Greg Bentley argued that AI represents an “unprecedented opportunity” for Bentley, rather than a displacement risk, citing the industry’s need for precision, safety, standards, interoperability, and professionally sealed deliverables. He said Bentley’s role as a system of record—especially via ProjectWise within Bentley Infrastructure Cloud—positions the company to steward proprietary engineering data and enable AI training under customer control.

Cumins said the company’s approach is twofold: embedding AI capabilities into products and instrumenting platforms so users and partners can build AI-driven workflows. He outlined three focus areas:

• Bentley Open Applications: using AI to automate interactions and tasks (including examples such as a Python assistant for MicroStation, drawing annotation in OpenRoads, and site layout optimization in OpenSite+), while enabling iterative testing and improvement of AI-orchestrated designs.
• Bentley Asset Analytics: applying AI (primarily computer vision) to imagery, then using engineering applications to interpret conditions and produce actionable engineering intelligence, with the potential to trigger downstream actions in third-party systems such as IBM Maximo.
• Bentley Infrastructure Cloud: positioning ProjectWise and iTwin as a data foundation, with iTwin mapping data into a base schema to enable AI-ready search and future model tuning or custom model training by customers using their own proprietary data.

Cumins emphasized Bentley’s “principled approach” to data ownership, saying customers decide if their data can be used for AI training and can grant or revoke consent through a Data Agreement Registry.

2026 outlook: revenue growth, ARR, and profit dollars

Andre guided to 2026 constant-currency revenue growth of 11% to 13%, translating to $1.685 billion to $1.715 billion at current exchange rates. Subscription revenue is also expected to grow 11% to 13% in constant currency, with perpetual license revenue expected to remain relatively flat. Service revenue is expected to re-accelerate, rising 15% to 20% in constant currency, which Andre attributed to the increasing scale of asset analytics and a strong order book in the Cohesive Maximo business.

For 2026, Andre projected constant-currency ARR growth of 10.5% to 12.5%, noting that upside from AI-powered asset analytics initiatives is “not necessarily annual recurring.” Greg Bentley echoed that point in Q&A, saying AI is contributing through asset analytics, but some inspections are not performed annually, making classification as ARR less straightforward.

Andre also said Bentley will shift its profitability outlook presentation to a dollar range to reflect changing FX exposure and business mix, and refined its key metric to “Adjusted operating income less operating stock-based compensation.” For 2026, he projected adjusted operating income less operating SBC of $495 million to $510 million and free cash flow of approximately $500 million to $570 million. He said cash flow guidance reflects variability in fourth-quarter collections and noted that repaying the 2026 convertible notes would introduce about $30 million of cash interest outflow compared with a negligible amount in 2025.

On capital allocation, Andre said Bentley ended 2025 with net debt leverage of 2.1x and stated that the company has capacity for dividends, share repurchases, and up to $400 million in programmatic acquisitions annually. Management said it is expanding its M&A openness beyond asset analytics as leverage has come down, while stressing it is not necessarily targeting that full annual amount.

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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