Bentley Systems, Incorporated (BSY) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on August 6, might help the stock move higher if these key numbers are better ...

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Group 1 - Bentley Systems, Incorporated (BSY) has shown a year-to-date return of 2.2%, outperforming the average return of -1.7% for the Computer and Technology sector [4] - The Zacks Consensus Estimate for BSY's full-year earnings has increased by 4.4% over the past 90 days, indicating improving analyst sentiment [4] - Bentley Systems is currently ranked 2 (Buy) in the Zacks Rank, which is a stock-picking model focusing on earnings estimates and revisions [3] Group 2 - Bentley Systems belongs to the Internet - Software industry, which consists of 167 companies and is currently ranked 51 in the Zacks Industry Rank [6] - The Internet - Software industry has seen an average gain of 6.9% year-to-date, indicating that BSY is slightly underperforming its industry [6] - In contrast, Broadcom Inc. (AVGO), another stock in the Computer and Technology sector, has a year-to-date return of 4.4% and is also ranked 2 (Buy) [5]

Core Viewpoint - The article discusses the investment potential of Bentley Systems (NASDAQ: BSY), highlighting a buy rating based on its valuation becoming attractive and the expectation of growth acceleration in the future [1]. Group 1: Investment Philosophy - The investment approach is fundamentally based, focusing on long-term durability and affordability rather than merely low multiples [1]. - The article emphasizes the importance of a robust balance sheet and steady long-term growth without cyclicality as key factors in selecting investment opportunities [1]. - It acknowledges the risks associated with investing in successful companies, particularly the potential of overpaying for stocks, underscoring the significance of valuation [1]. Group 2: Market Outlook - There is a belief that in certain situations, the potential for growth can outweigh immediate price concerns, suggesting a favorable outlook for companies with significant development runways [1].

Revenue Growth - Total revenues for the three months ended March 31, 2025, were $370,542, representing a 9.7% increase compared to the same period in 2024[119] - Subscription revenues increased to $342,318 for the three months ended March 31, 2025, up 11.5% year-over-year[119] - Annual Recurring Revenue (ARR) reached $1,319,256 as of March 31, 2025, reflecting a constant currency ARR growth rate of 12%[119] - Revenues from the Americas increased by 8.0% to $198,975, driven by subscription revenue growth from existing accounts[128] - EMEA revenues grew by 13.0% to $107,005, primarily due to subscription revenue expansion in the United Kingdom, Africa, and the Middle East[128] - Last twelve-month recurring revenues rose by $147,017, reaching $1,272,574 in Q1 2025, driven by strong account retention and new accounts[156] - The recurring revenues dollar-based net retention rate improved to 110% in Q1 2025 from 108% in Q1 2024, indicating effective revenue growth from existing accounts[148] - Total revenues for the three months ended March 31, 2025, were $374.319 million, a 10.8% increase from $337.421 million in the same period of 2024[173] - Subscription revenues increased to $345.651 million in Q1 2025, up from $306.757 million in Q1 2024, reflecting a growth of 12.7%[173] Operating Performance - Operating income for the three months ended March 31, 2025, was $115,184, compared to $91,931 for the same period in 2024[119] - Cash flows from operations were $219,415 for the three months ended March 31, 2025, compared to $204,969 in the prior year[119] - Adjusted operating income for Q1 2025 was $143,525, up from $131,682 in Q1 2024, marking a year-over-year increase of 9.9%[169] - Operating cash flow for Q1 2025 was $219.415 million, an increase of $14.446 million compared to $204.969 million in Q1 2024[176] Expenses and Income - Research and development expenses increased to $72,450 for the three months ended March 31, 2025, up 6.0% year-over-year[137] - Total operating expenses increased by 3.1% to $189,699 for the three months ended March 31, 2025[137] - For the three months ended March 31, 2025, income before income taxes was $111,825, compared to $92,548 for the same period in 2024, representing a year-over-year increase of 20.8%[146] - The effective tax rate decreased to 18.3% in Q1 2025 from 24.0% in Q1 2024, primarily due to increased discrete tax benefits recognized[146] - The company recorded discrete tax benefits of $5,073 in Q1 2025, significantly higher than $2,138 in Q1 2024, contributing to the lower effective tax rate[146] Cash and Debt Management - Long-term debt decreased to $1.244 billion as of March 31, 2025, down from $1.388 billion at the end of 2024[180] - Cash and cash equivalents totaled $83.637 million as of March 31, 2025, compared to $64.009 million at the end of 2024[174] - The company has $1.299 billion available under the Credit Facility as of March 31, 2025[180] - Net cash used in investing activities was $3.044 million for Q1 2025, a decrease from $3.849 million in Q1 2024[176] Shareholder Returns - The company repurchased 673,898 shares for $30.014 million during the three months ended March 31, 2025, compared to 302,598 shares for $15.006 million in the same period of 2024[183] - The company paid quarterly dividends of $0.07 per share in Q1 2025, an increase from $0.06 per share in Q1 2024[186] Future Outlook - The company expects continued favorable growth in recurring revenues due to strong account retention and the addition of new accounts[154] - ARR resulting from contracts with consumption measurement durations of less than one year was 50% of total ARR in Q1 2025, up from 48% in Q1 2024[152]

Financial Performance - Bentley Systems' ARR reached $1319 million as of March 31, 2025 [138] - The company's LTM recurring revenues grew by 13% (13.6% in constant currency) to $1273 million [134] - First quarter revenue showed growth, with subscriptions up 13% (15% in constant currency) and total revenue up 10% (11% in constant currency) [131] - GAAP operating income increased by 25% to $115 million, while AOI less SBC increased by 12% to $126 million [141] - The company anticipates total revenues between $1461 million and $1490 million for the full year 2025 [150] Growth Drivers and Initiatives - E365 as a percentage of total ARR continues to increase [48] - Virtuosity has achieved its thirteenth consecutive quarter with at least 600 new logos [98] - The company is prioritizing going digital, with infrastructure engineering operating at capacity [85] Geographic Performance - The Americas generated $717 million in revenue, EMEA $388 million, and APAC $248 million in 2024 [76] - Latin America experienced a very strong quarter [108, 113] Capital Allocation - The company has $84 million in cash and $1300 million in available revolver credit capacity [146] - The company reduced net bank debt by $135 million [148]

Company Performance - Bentley Systems reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, and up from $0.31 per share a year ago, representing an earnings surprise of 16.67% [1] - The company posted revenues of $370.54 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.61%, compared to revenues of $337.76 million in the same quarter last year [2] - Over the last four quarters, Bentley Systems has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Bentley Systems shares have declined approximately 6.3% since the beginning of the year, while the S&P 500 has decreased by 4.7% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $361.2 million, and for the current fiscal year, it is $1.15 on revenues of $1.48 billion [7] Industry Context - The Internet - Software industry, to which Bentley Systems belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $371 million, up 10% year over year, and 11% on a constant currency basis [29] - Subscription revenues grew 11% year over year, now representing 92% of total revenues, up one percentage point from the same period last year [29][30] - Last twelve months recurring revenues increased by 13% year over year, representing 92% of total revenues, up two percentage points year over year [31] - GAAP operating income was $115 million for Q1, with adjusted operating income less stock-based compensation at $126 million, up 12% year over year [32][34] - Free cash flow for the quarter was $216 million, up 7% year over year [35] Business Line Data and Key Metrics Changes - The ARR from infrastructure owner operators has reached parity with ARR from project supply chain engineering and construction contractors [8] - Professional services revenues declined 18% year over year, now representing 5% of total revenues [30] - The E365 program continues to be a growth driver, contributing 300 basis points of ARR growth from new logos, mainly from SMB [18] Market Data and Key Metrics Changes - ARR growth was 12% year over year, with 12.5% excluding the impact of China [17] - Growth was solid across the Americas, particularly in Latin America, while the US market outlook remains bright [21] - In Europe, significant investments are expected from the EU's Rearm Europe Plan and Germany's infrastructure fund [24][94] Company Strategy and Development Direction - The company is focusing on enhancing its business mix across infrastructure sectors, life cycles, and geographies to improve resilience against macro vulnerabilities [4][6] - The introduction of new platforms like Sequen EVO aims to unlock geoscience data potential, particularly in the mining sector [20] - The company is leveraging AI to improve productivity and efficiency in engineering tasks, such as automating drawing production [110][112] Management's Comments on Operating Environment and Future Outlook - Management remains confident in delivering solid results despite global macro uncertainties, citing strong demand for infrastructure and a critical shortage of engineers [16][17] - The company anticipates that permitting reforms will positively impact its business, particularly in the PowerLine Systems and mining sectors [76][78] - The outlook for 2025 remains positive, with expectations for continued growth driven by infrastructure investments [39] Other Important Information - The company has halved its exposure to China, now representing only about 2.5% of revenues, with growth compensating in other regions [13] - The partnership with Google aims to enhance asset analytics offerings, leveraging Google Street View data for improved planning and operations [25][66] Q&A Session Summary Question: How does the business skew towards state versus federal infrastructure activity? - Management indicated a slight dependence on federal funding, particularly for highway funds, which are matched by states [44][45] Question: Are there signs of macro pressure in sensitive areas like commercial facilities? - Management noted that commercial facilities are sensitive to demand and interest rates, but there is positive sentiment in industrial sectors due to manufacturing initiatives [53][55] Question: What is the expected linearity of ARR growth through the year? - Management expects seasonal growth, with Q2 typically higher and Q3 being the seasonal low due to timing of renewals and acquisitions [62] Question: How is the partnership with Google progressing? - The partnership is advancing well, with Google data being integrated into asset analytics, enhancing the company's offerings [66][68] Question: What is the outlook for European customers amid defense and infrastructure stimulus? - Management highlighted solid growth in Europe, driven by significant investments at both the European and country levels, particularly in defense and infrastructure [92][94]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Bentley Systems' Q1 2025 results demonstrate strong revenue growth, enhanced profitability, and robust cash flow generation [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Results) Bentley Systems reported strong Q1 2025 results, with total revenues up 9.7%, subscription revenues up 11.5%, and improved profitability Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $370.5M | $337.8M | +9.7% | | Subscriptions Revenues | $342.3M | $307.1M | +11.5% | | Operating Income Margin | 31.1% | 27.2% | +3.9 p.p. | | Net Income per Diluted Share | $0.28 | $0.22 | +27.3% | | Adjusted EPS | $0.35 | $0.31 | +12.9% | | Cash Flows from Operations | $219.4M | $205.0M | +7.0% | | Free Cash Flow | $216.4M | $201.4M | +7.4% | - Annualized Recurring Revenues (ARR) reached **$1,319.3 million** as of March 31, 2025, representing a constant currency growth rate of **12%** compared to March 31, 2024[2](index=2&type=chunk) - The last twelve-month recurring revenues dollar-based net retention rate improved to **110%**, up from **108%** for the same period last year[2](index=2&type=chunk) [Executive Commentary](index=2&type=section&id=Executive%20Commentary) Executives expressed satisfaction with strong Q1 performance, highlighting business resilience, robust demand, and confidence in the full-year outlook - Executive Chair Greg Bentley emphasized the company's business resilience, attributing it to a dependable mix of infrastructure sectors, lifecycle phases, commercial models, and geographic distribution[3](index=3&type=chunk) - CEO Nicholas Cumins stated that the strong start to the year positions the company well for its annual financial outlook, with accounts remaining cautiously optimistic as countries continue to prioritize infrastructure funding[3](index=3&type=chunk) - CFO Werner Andre confirmed that Q1 results were in line with expectations, including **12%** constant-currency ARR growth, highlighting sufficient balance sheet and cash flow for funding initiatives and debt refinancing[3](index=3&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Bentley Systems' consolidated balance sheets, statements of operations, and cash flows for the reported periods [Consolidated Balance Sheets](index=4&type=section&id=BENTLEY%20SYSTEMS%2C%20INCORPORATED%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets remained stable at **$3.40 billion**, while total liabilities decreased, leading to an increase in total equity Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $3,402,934 | $3,399,807 | | Total Liabilities | $2,305,245 | $2,358,687 | | Long-term debt | $1,244,308 | $1,388,088 | | Total Equity | $1,097,689 | $1,041,120 | [Consolidated Statements of Operations](index=6&type=section&id=BENTLEY%20SYSTEMS%2C%20INCORPORATED%20Consolidated%20Statements%20of%20Operations) Q1 2025 total revenues increased **9.7%** to **$370.5 million**, driven by subscription growth, leading to improved operating and net income Statement of Operations Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $370,542 | $337,763 | | Subscriptions Revenues | $342,318 | $307,089 | | Gross Profit | $304,883 | $275,933 | | Income from Operations | $115,184 | $91,931 | | Net Income Attributable to Bentley Systems | $91,368 | $70,310 | | Diluted EPS | $0.28 | $0.22 | [Consolidated Statements of Cash Flows](index=7&type=section&id=BENTLEY%20SYSTEMS%2C%20INCORPORATED%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 generated strong operating cash flow of **$219.4 million**, with financing activities primarily used for debt payments and stock repurchases Statement of Cash Flows Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $219,415 | $204,969 | | Net cash used in investing activities | ($3,044) | ($3,849) | | Net cash used in financing activities | ($200,808) | ($126,435) | | Cash and cash equivalents, end of period | $83,637 | $141,601 | [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section provides reconciliations of GAAP to non-GAAP financial measures, offering additional insights into the company's performance [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=BENTLEY%20SYSTEMS%2C%20INCORPORATED%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) Reconciliations highlight key non-GAAP metrics for Q1 2025, including Adjusted EPS of **$0.35** and **10.9%** constant currency total revenue growth Key Non-GAAP Reconciliations (Q1 2025, in thousands) | Metric | GAAP Value | Non-GAAP Value | | :--- | :--- | :--- | | Operating Income | $115,184 | - | | AOI less SBC | - | $126,220 | | Adjusted Operating Income | - | $143,525 | | Net Income | $91,368 | - | | Adjusted Net Income | - | $114,577 | | Cash flows from operations | $219,415 | - | | Free Cash Flow | - | $216,371 | - Adjusted EPS for Q1 2025 was **$0.35**, compared to **$0.31** in Q1 2024, with primary adjustments for amortization of purchased intangibles (**$11.4 million**) and stock-based compensation (**$17.3 million**)[21](index=21&type=chunk) - On a constant currency basis, Q1 2025 total revenues were **$374.3 million**, representing a **10.9%** increase over the prior year's constant currency revenue of **$337.4 million**[23](index=23&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) This section provides details on the conference call and important disclaimers regarding forward-looking statements [Conference Call Information](index=2&type=section&id=Call%20Details) Details for the Q1 2025 earnings conference call, including webinar access and replay availability, were provided - A live Zoom video webinar to discuss Q1 2025 results was scheduled for May 7, 2025, at 8:15 a.m. Eastern time[4](index=4&type=chunk) - A replay and transcript will be available on the Bentley Systems' Investor Relations website after the event[5](index=5&type=chunk) [Forward-Looking Statements & Disclaimers](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to various risks and uncertainties, with disclaimers regarding future updates - The press release contains forward-looking statements regarding future results, strategy, and operations, which are based on current expectations and assumptions[7](index=7&type=chunk) - Significant risks that could cause actual results to differ include adverse global economic/political conditions, impact of tariffs, competition, and ability to integrate acquisitions[7](index=7&type=chunk) - The company clarifies that some financial measures presented are non-GAAP and directs readers to the Form 8-K for required reconciliations[6](index=6&type=chunk)

Core Insights - Bentley Systems, Incorporated (BSY) is expected to report quarterly earnings of $0.30 per share, reflecting a decline of 3.2% year-over-year, while revenues are forecasted to be $364.69 million, indicating an 8% increase compared to the previous year [1] Revenue Estimates - Analysts project 'Revenues- Subscriptions and licenses' to reach $342.85 million, representing a year-over-year change of +8.3% [4] - The estimated 'Revenues- Services' is $20.27 million, indicating a decline of -4.2% from the prior-year quarter [4] - 'Revenues- Subscriptions' are expected to be $333.21 million, reflecting an increase of +8.5% from the previous year [4] - 'Revenues- Perpetual licenses' are projected at $9.59 million, showing a year-over-year change of +0.9% [5] - Total revenue year-over-year growth is expected to reach 7.5%, slightly up from 7.4% reported in the same quarter last year [5] - 'Annualized Recurring Revenues (ARR)' are anticipated to be $1.30 billion, compared to $1.19 billion from the previous year [5] Subscription Revenue Growth - 'Revenue - Subscriptions - YoY growth' is projected to be 8.5%, down from 10.5% reported in the same quarter last year [6] Stock Performance - Shares of Bentley Systems have returned +12.9% over the past month, outperforming the Zacks S&P 500 composite, which saw a +0.4% change [7] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [7]