Bentley Systems, Incorporated

What they do

Bentley Systems offers a comprehensive portfolio of cloud-connected desktop modeling and simulation applications (Bentley Open Applications, Seequent), a collaboration and engineering information management platform (Bentley Infrastructure Cloud), and asset analytics software. The software serves enterprises and professionals across the infrastructure lifecycle for sectors including public works/utilities, resources, industrial, and commercial/facilities. Powering these products is the Cesium and iTwin Platform for infrastructure digital twins and AI capabilities.

Revenue drivers

• Public Works/Utilities — Approximately 59% of sector-attributable annualized recurring revenues (ARR). Includes roads, rail, bridges, tunnels, airports, ports, federal/state/municipal agencies, and networks for electricity, gas, water, wastewater, and communications.
• Resources — Approximately 27% of sector-attributable ARR. Includes mining, oil and gas upstream, offshore, pipelines, environmental management, and renewable energy.
• Industrial — Approximately 9% of sector-attributable ARR. Includes process and discrete manufacturing, oil and gas downstream, and power generation.
• Commercial/Facilities — Approximately 5% of sector-attributable ARR. Includes campuses, office buildings, retail facilities, and hospitals.

Recent performance

For Q1 2026 (ended March 31, 2026), total revenues were $424.2 million, up 14.5% year-over-year (11.9% constant currency). Subscriptions revenue was $392.5 million, up 14.7% (12.2% constant currency). ARR reached $1,494.5 million, with constant currency ARR growth of 11.5%. Operating income margin was 29.8%, cash from operations was $193.4 million, and net income per diluted share was $0.30 ($0.38 adjusted).

Strategy

Management emphasizes advancing AI initiatives across the portfolio, instrumenting engineering applications to support AI-driven workflows and enable a new long-term economic engine where software is leveraged by AI agents at machine scale. They are focused on deepening the use of digital twins and the iTwin Platform to make products more data-centric. The company aims to maintain its leadership in Public Works/Utilities and resources sectors while pursuing programmatic acquisitions. Capital allocation priorities include returning capital to shareholders via dividends and share repurchases, and managing net debt leverage under 2x, as evidenced by a recent $550 million Term Loan A refinancing.

Risks

• Demand volatility from infrastructure cycles — The company's sales depend on accounts' infrastructure project spending, which has long timelines and is subject to economic declines in any of its four main sectors.
• Government spending reductions — A decrease in government spending on infrastructure could lower demand for Bentley's software and negatively impact results, as public works/utilities represent ~59% of sector-attributable ARR.
• Inability to quickly adjust expenses — A substantial portion of operating expenses is personnel and facilities-related, making it difficult to offset potential revenue declines from discount requests or extended payment terms.
• Forecasting uncertainty for long-cycle projects — The company may invest in capacity based on expected demand that takes longer to materialize or fails to develop, leading to misalignment between costs and revenue.

Outlook

Management stated that Q1 2026 was a strong start reflecting solid market fundamentals, with the Resources business being the fastest-growing sector and steady demand from Public Works/Utilities. They believe this provides a solid foundation for the year. The CFO noted that results position the company well within its full-year financial outlook, and the recent credit facility amendment increases financial flexibility for strategic priorities.