Bentley Systems, Incorporated Q4 FY2025 earnings call

Greg Bentley discussed financial fundamentals, AI as an opportunity for infrastructure engineering, and long-term perspective. Nicholas Cumins outlined strategy of embedding AI in products and instrumenting platforms, focusing on Bentley open applications, Bentley Asset Analytics, and Bentley Infrastructure Cloud. Werner Andre presented financial results and 2026 outlook, highlighting revenue growth, subscription revenue dominance, profitability, and capital allocation plans.

For 2025, total revenues were $1.502 billion, growing 11% on a reported basis and 10% in constant currency. Subscription revenues grew 13% reported and 12% in constant currency, representing 92% of total revenues. E365 and SMB initiatives are solid contributors, with E365 comprising 45% of subscription revenues. Perpetual license revenues were flat. Services revenues had a full year decline of 6% reported and 7% in constant currency. ARR ended Q4 at $1.462 billion at quarter end spot rates, with constant currency ARR growth rate of 11.5% year-over-year. Resources was fastest-growing sector, Public Works Utilities had strong growth, Power Line Systems was a key driver. Americas was largest region with strong growth, EMEA led by Middle East, Asia Pacific had mixed performance with India strong and China impacted.

2026 total revenues constant currency growth expected in range of 11% to 13%, subscription revenues to grow 11% - 13% in constant currency, service revenues expected to reaccelerate with 15% - 20% growth, perpetual license revenues relatively flat. Constant currency ARR growth projected between 10.5% and 12.5%. Adjusted operating income less operating stock-based compensation expense expected in range of $495 million to $510 million. Free cash flow projected in range of $500 million to $570 million.

Q: What could push constant currency ARR growth closer to higher end?

A: AI is contributing via asset analytics, but takes time to come into ARR per se.

Q: Is $400 million programmatic acquisitions consistent with past?

A: With leverage down, expanding M&A beyond asset analytics possible but not necessarily doing $400 million annually.

Q: Digital twins and pipeline?

A: Digital twin technology underlying products, happening without accounts necessarily aware.

Q: Macro demand and acquisitions?

A: Assuming consistent demand environment with China slowing, no breakout revenue from acquisitions.

Q: Services revenue recovery?

A: Driven by Maximo related business improvement.

Q: New packaging?

A: New packaging of ProjectWise resonating, Connect adopted with positive feedback.

Q: AI on design side?

A: Leveraging network and customer base, co-innovation initiative, focus on adoption over monetization now.

Q: Go to market on asset analytics?

A: Intend to white label for engineering firms, established directly with certain assets first.

Q: Long-term ownership debate and AI?

A: No proclivity to worry about AI displacement, engineering firms willing to budget for technology.

Q: Which AI opportunity sooner?

A: Asset analytics immediate, API consumption and monetization with accounts ongoing.

Q: Data monetization pace?

A: Already monetizing project data, longer run potential to monetize third-party data via ecosystems like Cesium