Bentley Systems, Incorporated

Total revenue in Q2 was $411 million, up 12.8% year over year, or 12.2% in constant currency. Subscription revenue rose 13.6% year over year and represented 92% of total revenue; services revenue increased 9.4%, and perpetual license revenue was about $10 million, down roughly $0.5 million year over year. ARR ended the quarter at $1.536 billion, with 12% constant-currency growth and 2.9% sequential growth. GAAP operating income was $89 million, and adjusted operating income less operating SBC was $116 million, with a 28.3% margin. Free cash flow was $64 million in the quarter and $252 million for the first half. Management kept full-year free cash flow guidance at $500 million to $570 million and said 2Q and first-half performance remained in line with expectations. Werner Andre said the company is tracking to the annual margin improvement commitment, and noted that if end-July FX rates held, second-half revenue would be negatively impacted by an incremental $8 million to $10 million versus the outlook.

Nicholas Cumins said the quarter reflected strong execution against favorable end-market demand, especially in resources and public works/utilities. He emphasized that AI is being positioned as a hybrid layer on top of Bentley’s deterministic engineering applications, with the company releasing five additional MCP servers since last quarter and seeing very positive customer response. His tone was confident and educational: adoption comes first, monetization follows next year, and Bentley intends to remain open to whatever AI model customers choose.

Werner Andre highlighted the quarter’s financial strength: $411 million of revenue, 92% subscription mix, $1.486 billion of last-12-month recurring revenue, 99% account retention, 109% net revenue retention, and $1.536 billion of ARR. He said AOI less operating SBC was $116 million for the quarter and $257 million for the first half, with first-half margins held back partly by early-year operating investments and the go-live of new finance and quote-to-cash systems. He also said free cash flow of $64 million in the quarter and $252 million in the first half represented about 47% of the full-year outlook, and that the company closed a new $550 million Term Loan A, reduced net debt by $32 million in the first half, repurchased $155 million of stock, paid $42 million of dividends, and ended with 1.9x net debt leverage and $1.2 billion of credit facility capacity.

Analysts focused heavily on whether ARR growth could sustain or improve, and management said continued strength in resources, public works/utilities, and potentially a large acquisition and Asset Analytics deals would be needed to reach the top end of the range. Questions also centered on AI monetization and competition; management said monetization is not planned this year, should start next year, and will be priced reasonably so it does not block adoption. On PLS, management said the business has been a consistent growth engine both in and outside the U.S., with future upside if permitting reform finally moves ahead. They also reiterated that AI strategy and product investment priorities remain centered on Bentley Open Applications, Bentley Infrastructure Cloud, and Seequent.