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1. Company Snapshot

1.a. Company Description

Bentley Systems, Incorporated, together with its subsidiaries, provides infrastructure engineering software solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific.The company offers open modeling and open simulation applications for infrastructure design integration, which include MicroStation, OpenRoads, OpenRail, OpenPlant, OpenBuildings, OpenBridge, OpenSite, OpenFlows, STAAD and RAM, SACS, MOSES, AutoPIPE, SITEOPS, CUBE, DYNAMEQ, EMME, and LEGION; and geoprofessional applications for modeling and simulation of near and deep subsurface conditions, including Leapfrog, AGS Workbench, GeoStudio, Imago, MX Deposit, Oasis montaj, PLAXIS, and OpenGround.It also provides project delivery systems that support collaboration, work-sharing, and 4D construction modeling for infrastructure project delivery enterprises, such as ProjectWise, ProjectWise Design Review Service, and SYNCHRO; and asset and network performance systems, such as AssetWise ALIM, AssetWise Asset Reliability, AssetWise Enterprise Interoperability, AssetWise 4D Analytics, AssetWise Linear, and Seequent Central.


In addition, it offers industry solutions comprising AssetWise Linear SUPERLOAD, AssetWise Linear Analytics, AssetWise Inspections, ContextCapture, OpenCities, OpenUtilities, OpenTower, OpenWindPower, Power Line, SPIDA, OrbitGT, sensemetrics, PlantSight, and WaterSight.The company serves civil, structural, geotechnical, geoscience subsurface engineers, architects, geospatial professionals, city and regional planners, contractors, fabricators, and operations and maintenance engineers.Bentley Systems, Incorporated was incorporated in 1984 and is headquartered in Exton, Pennsylvania.

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1.b. Last Insights on BSY

Bentley Systems' recent performance was impacted by a decrease in stake by Asset Management One Co. Ltd., which trimmed its holdings by 7.1% during the second quarter. Additionally, the company's earnings estimate revisions do not suggest further strength down the road. Despite matching Q3 earnings estimates, the stock has a "Moderate Buy" rating from analysts, with one sell rating and four hold ratings. Institutional investors, such as Sumitomo Mitsui Trust Group Inc., have increased their positions, but this may not be enough to offset negative sentiment.

1.c. Company Highlights

2. Bentley Systems' Q3 Earnings: A Strong Performance Driven by AI Adoption

Bentley Systems reported a robust third-quarter performance, with total revenues reaching $376 million, up 12% year-over-year on a reported basis and 11% on a constant currency basis. Subscription revenues grew 14% year-over-year for the quarter in reported and 12% in constant currency. Adjusted operating income less stock-based compensation expense was $104 million for the quarter, up 16% year-over-year, with a margin of 27.7%, up 100 basis points. The company's EPS came in at $0.172, missing estimates of $0.27.

Publication Date: Nov -06

📋 Highlights
  • Q3 Revenue Growth: Total revenues reached $376 million, up 12% year-over-year (11% constant currency), driven by 14% growth in subscription revenues.
  • AI Implementation Spending: Median reported AI implementation spending is 19 basis points of gross revenue, projected to surge to 71 basis points over three years.
  • ARR Expansion: Annual Recurring Revenue (ARR) grew 10.5% year-over-year, with a net revenue retention rate of 109% and 300 basis points of growth from new logos.
  • Productivity Gains: Bentley software enabled engineering firms to achieve productivity improvements of 15-25% in project delivery, driven by AI and digital tools.
  • Regional Performance: Asia Pacific led growth, supported by India and Southeast Asia, while EMEA’s Middle East region outperformed, despite softer conditions in Australia and New Zealand.

Growth Drivers

The company's growth was driven by its users' increasing adoption of AI-driven initiatives, with a notable shift in spending from office spaces to data centers. According to Greg Bentley, the AEC Advisors' survey highlights a dramatic shift in spending, with technology spending as a percentage of revenue increasing by 40% over 6 years, coinciding with the company's revenue growth. The company's Infrastructure AI co-innovation initiative is expected to drive further growth, with the median reported AI implementation spending projected to increase to 71 basis points over the next 3 years.

Valuation and Outlook

With a P/S Ratio of 9.7 and an EV/EBITDA of 42.78, the market appears to be pricing in significant growth expectations. The company's ROE of 23.96% and ROIC of 12.58% indicate a strong ability to generate returns. Analysts estimate next year's revenue growth at 10.4%, which suggests a continued upward trajectory. The company's guidance for Q4 expects ARR growth to be stronger than Q3, driven by renewals and potentially M&A or big asset analytics opportunities.

AI Adoption and Infrastructure Investment

The company's focus on Infrastructure AI is driving growth, with users investing heavily in AI and the company's engineering applications playing a new role in interacting with AI agents. The company's customers are being affected by labor shortages, and the company is seeing a growing trend of customers looking to invest in technology to help alleviate these challenges. Infrastructure investment in Asia Pacific was strong, particularly in India and Southeast Asia, and is expected to continue, supporting long-term growth and development.

Conclusion on Financials

The net new ARR was down year-over-year on a constant currency basis, but this was expected. The company is expecting a big step-up in net new ARR in 4Q, driven by M&A and asset analytics deals. The company's financial performance is expected to continue its upward trajectory, driven by its focus on AI adoption and infrastructure investment.

3. NewsRoom

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Cetera Investment Advisers Sells 1,538 Shares of Bentley Systems, Incorporated $BSY

Dec -02

Source: defenseworld.net

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Bentley Systems Upgraded To Buy On AI Infrastructure Growth And Valuation Dip

Dec -01

Source: seekingalpha.com

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Bentley Systems, Incorporated Declares Fourth Quarter 2025 Dividend, Announces Extension of Stock Repurchase Program

Nov -21

Source: businesswire.com

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Bentley Systems, Incorporated (BSY) Presents at Global Technology, Internet, Media & Telecommunications Conference 2025 Transcript

Nov -18

Source: seekingalpha.com

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Bentley Systems, Incorporated (BSY) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Compared to Estimates, Bentley Systems (BSY) Q3 Earnings: A Look at Key Metrics

Nov -05

Source: zacks.com

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Bentley Systems, Incorporated (BSY) Matches Q3 Earnings Estimates

Nov -05

Source: zacks.com

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Bentley Systems Announces Third Quarter 2025 Results

Nov -05

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.81%)

6. Segments

Enterprise Subscriptions

Expected Growth: 12%

Strong demand for infrastructure development, increasing adoption of digital twins, and growing need for data-driven insights drive Bentley Systems' Enterprise Subscriptions growth. The company's expanding product portfolio, strategic acquisitions, and partnerships also contribute to its 12% growth. Additionally, the shift towards subscription-based models and the rising importance of infrastructure resilience and sustainability further support this growth.

Term License Subscriptions

Expected Growth: 10%

Bentley Systems' Term License Subscriptions growth is driven by increasing adoption of infrastructure engineering software, rising demand for digital twins, and growing need for construction and engineering firms to digitize their workflows. Additionally, the company's strategic acquisitions and expanding partner network contribute to its growth.

SELECT Subscriptions

Expected Growth: 11%

Bentley Systems' 11% growth in Subscriptions is driven by increasing adoption of digital twins in infrastructure projects, growing demand for cloud-based collaboration tools, and expansion into new markets such as China and India. Additionally, the company's strategic acquisitions and investments in emerging technologies like AI and IoT are contributing to its growth momentum.

Services - Other

Expected Growth: 9%

Bentley Systems' Services - Other segment growth is driven by increasing adoption of digital twin technology, growing demand for infrastructure development, and rising need for asset performance management. Additionally, the company's expanding presence in emerging markets and strategic partnerships are contributing to the 9% growth rate.

Perpetual Licenses

Expected Growth: 8%

Strong demand for infrastructure development, increasing adoption of digital twins, and growing need for efficient project delivery drive growth in Perpetual Licenses from Bentley Systems. Additionally, the company's strategic acquisitions, expanding partner network, and continuous innovation in software solutions contribute to the 8% growth rate.

Services - Recurring

Expected Growth: 13%

Bentley Systems' Services - Recurring segment growth of 13% is driven by increasing adoption of subscription-based models, expansion of its SaaS offerings, and growing demand for digital twin solutions in infrastructure and construction industries, resulting in higher recurring revenue and improved customer retention.

7. Detailed Products

MicroStation

A CAD software for 2D and 3D design and drafting, used for architecture, engineering, and construction projects.

ProjectWise

A project collaboration and management software for infrastructure projects, enabling teams to work together and share information.

AssetWise

An asset performance management software for industries such as oil and gas, transportation, and utilities.

OpenRoads

A civil engineering software for designing and analyzing roads, highways, and other transportation infrastructure.

OpenBridge

A bridge design and analysis software for engineers and architects.

OpenBuildings

A building information modeling (BIM) software for architects, engineers, and contractors.

OpenSite

A site design and land development software for architects, engineers, and surveyors.

LEGION

A pedestrian simulation software for analyzing and optimizing pedestrian traffic flow.

iTwin

A digital twin software for creating and managing digital replicas of physical infrastructure assets.

8. Bentley Systems, Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Bentley Systems, Incorporated has a diverse range of products and services, making it difficult for substitutes to emerge. However, the increasing adoption of cloud-based solutions and open-source alternatives poses a moderate threat.

Bargaining Power Of Customers

Bentley Systems, Incorporated has a large and diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often critical to customers' operations, making it difficult for them to negotiate prices or terms.

Bargaining Power Of Suppliers

Bentley Systems, Incorporated has a diverse supply chain and is not heavily dependent on a single supplier. The company's strong financial position and long-term contracts with suppliers also reduce the bargaining power of suppliers.

Threat Of New Entrants

The software industry has high barriers to entry, including significant research and development costs, complex technology, and established customer relationships. These barriers make it difficult for new entrants to compete with Bentley Systems, Incorporated.

Intensity Of Rivalry

The software industry is highly competitive, with many established players and new entrants vying for market share. Bentley Systems, Incorporated faces intense competition from companies like Autodesk, Trimble, and ESRI, which can lead to pricing pressure and increased marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.53%
Debt Cost 3.95%
Equity Weight 36.47%
Equity Cost 9.34%
WACC 5.91%
Leverage 174.22%

11. Quality Control: Bentley Systems, Incorporated passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

43.05$

Current Price

43.05$

Potential

-0.00%

Expected Cash-Flows