Company Overview
Bentley Systems, Incorporated (BSY) is the infrastructure engineering software company, dedicated to advancing the world's infrastructure for better quality of life. The company has a long and storied history, with its origins tracing back to 1984 when the Bentley brothers founded the business. Over the past four decades, Bentley Systems has evolved into a leading provider of comprehensive software solutions that empower infrastructure professionals to design, build, and operate better and more resilient infrastructure across a diverse range of sectors.
Product Portfolio
Bentley Systems' comprehensive portfolio of integrated software offerings spans professional disciplines, infrastructure sectors, geographies, and the entire infrastructure lifecycle. The company's product portfolio is organized into several key segments:
Bentley Open Engineering Applications serve as cloud-connected desktop modeling and simulation tools that support a wide variety of engineering disciplines. Key applications in this segment include MicroStation, OpenBridge, OpenBuildings, OpenFlows, OpenPlant, OpenRail, OpenRoads, OpenSite, OpenTower, OpenTunnel, and OpenUtilities. These applications work together to improve infrastructure engineering quality and productivity, resulting in better project designs and deliverables.
Seequent Geoprofessional Applications support modeling and simulation to help geoprofessionals and infrastructure engineers develop a detailed understanding of near and deep subsurface conditions. Key applications in this segment include AGS, Central, GeoStudio, Imago, Leapfrog, MX Deposit, Oasis montaj, OpenGround, and PLAXIS.
Bentley Infrastructure Cloud extends enterprise collaboration during project delivery and helps manage engineering information during asset operations and maintenance. This segment includes ProjectWise for project delivery, SYNCHRO for construction, and AssetWise for asset operations.
Bentley Asset Analytics solutions utilize artificial intelligence to automatically detect and analyze issues, ultimately improving overall asset performance. These solutions are applied to specific asset types and use cases, including Blyncsy for inspecting and detecting roadway conditions, Bridge Monitoring for identifying and classifying bridge defects, Dam Monitoring for assessing, monitoring, and analyzing risks to dams, and OpenTower iQ for creating digital twins of cell tower infrastructure.
Underpinning these product offerings is Bentley Systems' Cesium and iTwin Platform, a cloud-native technology platform that enables the creation, curation, and leveraging of infrastructure digital twins. This powerful platform not only enhances Bentley's existing products by adding digital twin capabilities but also supports the development of a new generation of iTwin-native, data-centric applications that leverage AI to increase engineering productivity.
Growth Strategy and Acquisitions
Since its founding, Bentley Systems has pursued a strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses. This approach has allowed the company to expand its portfolio and strengthen its offerings across various sectors. A significant milestone in the company's history was its initial public offering (IPO) in September 2020, which provided additional resources to continue its growth strategy through acquisitions and investments.
The acquisition of Seequent Holdings Limited in 2021 marked another important development for Bentley Systems. This acquisition enabled the company to incorporate modeling and simulation of full subsurface depths into its infrastructure digital twin capabilities, advancing infrastructure resilience and sustainability. In 2022, Bentley Systems further expanded its capabilities by acquiring PLS, a leader in software for the design of overhead electric power transmission lines and their structures, bolstering the company's grid digital twin solutions.
Navigating Challenges
Throughout its history, Bentley Systems has successfully navigated challenges common to many technology companies, such as keeping pace with evolving customer needs and rapidly changing industry dynamics. The company has addressed these challenges through continuous innovation, strategic acquisitions, and a focus on delivering comprehensive software solutions that address the diverse needs of its global customer base across the infrastructure lifecycle.
Financials
Bentley Systems' diversified revenue streams, with 90% of its 2024 total revenues coming from subscriptions, have provided the company with greater visibility, quality, and consistency in its financial performance. For the full year 2024, the company reported total revenues of $1.35 billion, up 10.1% (10.3% on a constant currency basis) compared to the prior year. Subscription revenues, which now account for 90% of total revenues, grew 13.2% (13.4% on a constant currency basis) to $1.22 billion.
The company's annualized recurring revenues (ARR) stood at $1.28 billion as of December 31, 2024, representing a constant currency growth rate of 12% year-over-year. Excluding the impact of China, the company's ARR growth rate was 12.5% on a constant currency basis. Bentley Systems' last twelve-month recurring revenues dollar-based net retention rate was 110% as of the end of 2024, reflecting the company's ability to consistently retain and grow its recurring revenues within existing accounts.
Bentley Systems' financial performance has also been bolstered by its strategic acquisitions, including the landmark acquisition of Cesium in September 2024, which significantly expanded the company's platform ecosystem of geospatial digital twin developments. The company's programmatic acquisition strategy has further enhanced the comprehensiveness of its software portfolio, filling in white spaces and improving technical and commercial integration.
In terms of profitability, Bentley Systems' adjusted operating income with stock-based compensation (Adjusted OI wSBC) for the full year 2024 was $372.22 million, representing a margin of 27.5% and a year-over-year increase of 15%. This performance reflects the company's commitment to expanding its operating margins by approximately 100 basis points annually, a goal it has consistently achieved.
The company's net income for the full year 2024 was $234.43 million. For the most recent quarter (Q4 2024), Bentley Systems reported revenue of $349.82 million, up 12.6% year-over-year, with a net income of $50.09 million.
Liquidity
The company's strong cash flow generation has also been a key highlight, with cash flows from operations reaching $435.29 million in 2024, up from $416.70 million in the prior year. Bentley Systems' free cash flow, net of stock-based compensation, was $421.25 million in 2024, underscoring the company's ability to efficiently convert its adjusted operating income into free cash flow.
As of December 31, 2024, Bentley Systems had $64.01 million in cash and cash equivalents. The company's debt-to-equity ratio stood at 1.37, while its current ratio and quick ratio were both 0.54. Bentley Systems also had access to $1.16 billion under its $1.30 billion revolving credit facility, providing ample liquidity for future growth initiatives and operational needs.
Geographic Performance
Bentley Systems' global presence is reflected in its revenue distribution across different regions. For the fiscal year 2024, the Americas region contributed $717.00 million in revenue, accounting for 53% of the total. The EMEA (Europe, Middle East, and Africa) region generated $388.38 million in revenue, representing 29% of the total, while the APAC (Asia-Pacific) region contributed $247.71 million, or 18% of the total revenue.
Industry Trends
The infrastructure engineering software industry is being significantly impacted by the rapid growth of artificial intelligence (AI) technologies. The global AI market is projected to grow from $757.58 billion in 2025 to $3.68 trillion by 2034, representing a compound annual growth rate (CAGR) of 19.2%. In the United States alone, the AI market is expected to expand from $146.09 billion in 2024 to $851.46 billion by 2034, with a CAGR of 19.33%. These trends present significant opportunities for Bentley Systems to leverage AI in its product offerings and further enhance its infrastructure digital twin capabilities.
2025 Outlook
Looking ahead to 2025, Bentley Systems provided a financial outlook that is consistent with its long-term objectives. The company expects total GAAP revenues to be in the range of $1.461 billion to $1.490 billion, or $1.481 billion to $1.510 billion on a constant currency basis, representing an approximately 1.5% headwind to revenue growth. Subscription revenues, which are anticipated to account for 90% of total revenues, are expected to grow between 10.5% and 12.5% on a constant currency basis.
The company's outlook for constant currency ARR growth is also in the range of 10.5% to 12.5%, while its adjusted operating income with stock-based compensation margin is expected to be approximately 28.5%, delivering on its commitment to expand its operating margin by approximately 100 basis points annually. Bentley Systems' free cash flow outlook for 2025 is in the range of $450 million to $455 million.
Additionally, Bentley Systems plans to increase its quarterly dividend by $0.01, further demonstrating its commitment to returning value to shareholders. The company also expects to have doubled its constant currency subscription revenues and ARR from 2020 based on its 2025 outlook, highlighting its strong growth trajectory.
Conclusion
Despite the ongoing geopolitical and economic challenges, Bentley Systems has demonstrated its resilience and ability to navigate through turbulent times. The company's diversified revenue streams, comprehensive software portfolio, and strategic acquisition efforts have positioned it as a leader in the infrastructure engineering software market. As the industry continues to embrace digital transformation and AI-driven solutions, Bentley Systems is well-equipped to capitalize on the growing demand for its innovative solutions and drive sustainable long-term growth.