Bentley Systems Q1 2025 slides: Recurring revenue growth drives earnings beat

Introduction & Market Context

Bentley Systems, Inc. (NASDAQ:BSY) delivered strong first-quarter results for 2025, exceeding analyst expectations with revenue of $371 million and earnings per share of $0.35, compared to forecasts of $366.41 million and $0.30, respectively. The infrastructure engineering software provider saw its stock rise 3.55% in pre-market trading following the May 7 earnings release, reflecting investor confidence in the company’s growth trajectory and strategic initiatives.

The company’s performance comes amid increased global demand for infrastructure solutions, with Executive Chair Greg Bentley emphasizing the company’s global citizenship and CEO Nicholas Cummins (NYSE:CMI) highlighting unprecedented demand for "better and more resilient infrastructure."

Quarterly Performance Highlights

Bentley’s Q1 2025 results showed solid growth across key metrics, with total revenue increasing 10% year-over-year to $371 million. Subscription revenue, which now comprises 92% of total revenue, grew by 11% to $342 million, while license and service revenues contributed $11 million and $18 million, respectively.

As shown in the following revenue performance chart, the company continues to shift toward a subscription-based model:

The company’s recurring revenue performance remained strong, with Last Twelve Months (LTM) recurring revenues reaching $1,273 million, up from $1,126 million in the prior year period. Account retention rates have also improved, reaching 110% in Q1 2025:

Bentley’s Annual Recurring Revenue (ARR) growth has shown resilience, particularly when excluding China, demonstrating the company’s ability to maintain growth momentum despite regional challenges:

Strategic Initiatives

Bentley’s growth strategy centers around three key initiatives: Enterprise 365 (E365) for large enterprise accounts, Virtuosity for small and medium businesses (SMB), and digital twins for comprehensive infrastructure lifecycle management.

The E365 program has shown significant traction, growing from 25% of total ARR in 2020 to 45% in 2024, reflecting strong adoption among both project delivery firms and owner-operators:

The company continues to innovate with new product offerings, including the recently launched Seequent Evo, a cloud-based platform for geological and environmental data management:

Bentley also announced a strategic partnership with Google (NASDAQ:GOOGL) to enhance infrastructure asset analytics by integrating Google Street View with Bentley products, potentially opening new market opportunities:

Detailed Financial Analysis

Bentley’s profitability metrics showed improvement in Q1 2025, with GAAP operating income increasing to $115 million from $92 million in Q1 2024. Adjusted Operating Income (AOI) less Stock-Based Compensation reached $126 million, up from $112 million in the prior year period:

The company maintains a strong balance sheet with $84 million in cash and $1.3 billion in available credit capacity, providing ample liquidity for future investments and acquisitions:

Bentley’s global presence spans 189 countries with 41,000 accounts and $1.3 billion in annual revenue. The company has offices in 42 countries and employs 5,500 colleagues worldwide, providing geographic diversification that enhances business resilience:

Forward-Looking Statements

For the full year 2025, Bentley provided a positive outlook with total revenues expected to reach between $1,461 million and $1,490 million. Subscription revenues are projected to grow 10.5% to 12.5% in constant currency, while ARR growth is anticipated at similar rates:

The company expects to maintain strong profitability with an AOI less SBC margin of approximately 28.5% and generate free cash flow between $415 million and $455 million. The effective tax rate is projected to be approximately 21%.

Bentley’s focus on recurring revenue streams, global diversification, and strategic initiatives in digital twins and AI-driven solutions positions the company well for continued growth in the infrastructure engineering software market. As infrastructure investment increases globally, Bentley’s comprehensive portfolio across various sectors and lifecycle stages provides multiple avenues for expansion while maintaining resilience against regional economic fluctuations.

Full presentation:

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