- 2025 Free Cash Flow Margins: Achieved 35% free cash flow margin, with truly free cash flow (less SBC) at 30%, driven by operational efficiency.
- 2026 Revenue Guidance: Projects constant currency revenue growth of 11–13%, with subscription revenue expected to grow 11–13% annually.
- Asset Analytics Milestone: Reached $50 million annualized run rate for asset consumption revenue in 2025, bolstered by acquisitions (Pointivo, Talon).
- Q4 ARR Growth: Annual Recurring Revenue increased 11.5% YoY, with net revenue retention stable at 109% and new SME logos contributing 300 bps ARR growth.
- Programmatic Acquisitions: Plans to allocate $400 million annually for strategic acquisitions post-deleveraging, with leverage reduced to a "healthy level."
Segment Performance
The company's Q4 ARR increased 11.5% year-over-year, with net revenue retention stable at 109%. The Resources sector was the fastest-growing sector, driven by Seequent's resilience in the mining sector. The Public Works Utilities sector, the largest, delivered strong growth, driven by sustained global infrastructure investment. The Americas saw strong growth, driven by a favorable macro backdrop for infrastructure investment.
AI-Driven Growth Opportunities
The company is investing in AI across its portfolio, with three key areas: leveraging AI to enhance engineers' work, Bentley Asset Analytics using AI to process imagery and detect features on assets, and Bentley Infrastructure Cloud serving as the data foundation for AI. The asset analytics strategy reached a $50 million run rate milestone for asset consumption revenue, with OpenTower iQ and Blyncsy having a breakthrough year. As Greg Bentley noted, "AI is not a risk to Bentley Systems but an unprecedented opportunity, given the company's distinctive fundamentals in infrastructure engineering."
2026 Financial Outlook
The company expects total revenues constant currency growth to be in the range of 11% to 13%, with subscription revenues expected to grow between 11% and 13% in constant currency. Adjusted operating income less operating stock-based compensation expense is projected to be in the range of $495 million to $510 million. Free cash flow is projected to be in the range of $500 million to $570 million, representing a healthy increase.
Valuation and Growth Prospects
With a P/E Ratio of 41.39 and an EV/EBITDA of 24.84, the company's valuation multiples suggest a premium for its growth prospects. The company's ROE of 23.93% and ROIC of 8.43% indicate strong profitability. Analysts estimate next year's revenue growth at 11.0%, which is in line with the company's guidance. The company's ability to drive growth through AI-driven initiatives and its asset analytics platform positions it well for long-term success.