Group 1: Earnings Performance - Bentley Systems reported quarterly earnings of $0.27 per share, matching the Zacks Consensus Estimate, and an increase from $0.24 per share a year ago [1] - The company posted revenues of $375.55 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 2.59% and up from $335.17 million year-over-year [2] - Over the last four quarters, Bentley Systems has surpassed consensus EPS estimates two times and revenue estimates three times [2][1] Group 2: Stock Performance and Outlook - Bentley Systems shares have increased approximately 4.8% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The company's earnings outlook will be crucial for future stock movements, with current consensus EPS estimates at $0.28 for the coming quarter and $1.21 for the current fiscal year [7] - The estimate revisions trend for Bentley Systems was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Internet - Software industry, to which Bentley Systems belongs, is currently in the top 34% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $376 million, up 12% year over year on a reported basis and 11% on a constant currency basis [25] - Year-to-date total revenues grew 11% and 10% on a reported and constant currency basis, respectively [25] - Subscription revenues grew 14% year over year for the quarter in reported and 12% in constant currency, representing 92% of total revenues, up 2 percentage points from the same quarter last year [26][25] - 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%, and year-to-date adjusted operating income was $335 million, up 13% with a margin of 30.2% [30] Business Line Data and Key Metrics Changes - The resources sector was the fastest-growing sector in the quarter, with solid performance in public works/utilities driven by sustained global infrastructure investment [22] - Perpetual license revenues for the quarter were $11 million, essentially flat compared to the prior year, while professional services revenues declined 2% for the quarter [26] - E365 performance remained solid, contributing 300 basis points of ARR growth from new logos, primarily within the SMB segment [22] Market Data and Key Metrics Changes - Asia-Pacific had a strong quarter, followed by the Americas and EMEA, with North America leading growth in the Americas [23] - The Middle East continued to lead EMEA with strong performance, supported by robust investment in transport, water, and energy [24] - China's performance was consistent with expectations, representing only about 2% of total ARR [25] Company Strategy and Development Direction - The company is focusing on AI-driven innovations and partnerships, particularly with Google, to enhance asset analytics and infrastructure management [52][51] - Bentley Systems is investing in AI capabilities to improve engineering productivity and is engaging with customers to evolve its applications to better support AI use cases [46][18] - The company aims to shift from time and materials billing to value-based pricing, leveraging AI to enhance productivity and service delivery [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving annual financial targets, with expectations for stronger ARR growth in Q4 due to significant renewal activity [39][38] - The ongoing government shutdown has had minimal impact on revenues, with funding for awarded projects continuing to flow [40] - Concerns about permitting reform in the U.S. could affect future growth, but the company is well-positioned to benefit from upcoming developments in energy infrastructure [23] Other Important Information - Free cash flow was $111 million for the quarter and $384 million year-to-date, consistent with seasonal expectations [31] - The company fully paid down its senior debt, resulting in a net debt leverage of 2.2 times adjusted EBITDA, down from 2.9 times at the end of 2024 [32] Q&A Session Summary Question: Can you elaborate on the opportunity for better ARR growth and asset analytics? - Management indicated that they only monetize actual consumption and are not yet monetizing API consumption, but expect to see a strong renewal period in Q4 [36][37] Question: What impact has the government shutdown had on your business? - Management noted minimal impact, as direct revenue from the U.S. federal government is less than 1%, and funding for awarded projects continues [39][40] Question: How is the partnership with Google progressing? - The integration of Google Geo data across the portfolio is going well, with exciting opportunities for asset analytics and deeper infrastructure asset understanding [51][52] Question: Are you seeing proactive RFPs from customers around AI capabilities? - It is still early for specific AI capabilities requests, but there is a clear demand for data accessibility for AI purposes [53][54] Question: How do you plan to evolve your product development in light of AI? - The company aims to maintain a close feedback loop with users and iterate on product development to ensure readiness for market scaling [59][60]

Financial Performance - The company's LTM recurring revenues reached $1350 million, a 13% increase (CC +13%) [127] - ARR reached $1405 million as of September 30, 2025 [131] - The company anticipates total revenues between $1461 million and $1490 million, or $1481 million to $1510 million in constant currency for the full year 2025 [141] - Free cash flow for the full year 2025 is projected to be between $430 million and $470 million [141] - Q3 subscriptions revenues increased to $344 million [124] - Q3 services revenues increased to $21 million [124] Growth & Adoption - Data center construction spend has increased by 184% since December 2022 [28] - Approximately half of survey respondents are either piloting AI or have already implemented it [87] - The company's OpenSite+ delivers projects up to 10 times faster [89] AI Implementation & Concerns - 40% of respondents believe AI is a major consideration, and they are actively adapting their business model for significant future disruption [55] - Security and data privacy risks are the primary concerns across all firms adopting AI, with 45.7% of respondents indicating this concern [99] - 27.9% of respondents believe that faster AI adoption by competitors will surpass them in data-driven decision-making [45, 50]

Financial Performance - Total revenues for Q3 2025 were $375.5 million, representing a year-over-year increase of 12.0%[2] - Subscription revenues reached $344.3 million, up 13.5% year-over-year, accounting for 92% of total revenues[2][5] - Annualized Recurring Revenues (ARR) grew to $1,405.2 million, reflecting a constant currency growth rate of 10.5% compared to the previous year[2] - Total revenues for the three months ended September 30, 2025, increased to $375.5 million, up 12% from $335.2 million in the same period of 2024[18] - Subscription revenues rose to $344.3 million, representing a 14% increase compared to $303.2 million in the prior year[18] - Gross profit for the nine months ended September 30, 2025, was $903.6 million, a 11% increase from $813.4 million in 2024[18] - Operating income for the three months ended September 30, 2025, was $84.5 million, up 23% from $68.6 million in the same quarter of 2024[22] - Net income attributable to Bentley Systems for the nine months ended September 30, 2025, was $219.2 million, a 19% increase from $184.7 million in 2024[18] - Cash flows from operating activities for the nine months ended September 30, 2025, totaled $396.9 million, compared to $353.7 million in the same period of 2024[20] - The company reported a basic net income per share of $0.18 for the three months ended September 30, 2025, compared to $0.13 in the same period of 2024[22] Cash Flow and Expenses - Cash flows from operations were $116.4 million, up from $86.1 million year-over-year[2] - Free cash flow for the quarter was $110.7 million, compared to $84.3 million in the same period last year[2] - Cash flows from operations for the three months ended September 30, 2025, were $116,376 million, compared to $86,105 million for the same period in 2024, representing a year-over-year increase of 35%[24] - Free cash flow for the nine months ended September 30, 2025, was $384,040 million, up from $345,161 million in 2024, indicating a growth of 11.3%[24] - Cash interest expenses for the three months ended September 30, 2025, were $2,520 million, down from $3,424 million in 2024, showing a reduction of 26.4%[24] - Cash taxes for the nine months ended September 30, 2025, totaled $34,027 million, slightly up from $33,023 million in 2024, indicating a year-over-year increase of 3%[24] - The company reported cash acquisition expenses of $9,354 million for the nine months ended September 30, 2025, compared to $5,571 million in 2024, representing a 67.5% increase[24] - Changes in operating assets and liabilities for the nine months ended September 30, 2025, resulted in a negative impact of $37,039 million, compared to a negative impact of $44,718 million in 2024, showing an improvement[24] Profitability Metrics - Operating income margin improved to 22.5%, up from 20.5% in the same period last year[2] - Net income per diluted share increased to $0.18, compared to $0.13 for the same period last year[2] - Adjusted operating income for the nine months ended September 30, 2025, was $390.0 million, compared to $354.3 million in the same period of 2024[22] - Adjusted EBITDA for the three months ended September 30, 2025, reached $129,722 million, compared to $110,001 million in 2024, reflecting a 17.9% increase[24] Research and Development - Research and development expenses for the three months ended September 30, 2025, increased to $78.8 million, up from $70.1 million in 2024[18] Strategic Initiatives - New AI capabilities were unveiled during the quarter, enhancing the company's portfolio and addressing the engineering capacity gap[4][5] - The company is positioned for potential acquisitions and stock repurchases to support long-term growth[5] Cash and Liquidity - The company had cash and cash equivalents of $165.4 million at the end of the period, significantly up from $72.2 million at the end of September 2024[20]

Core Insights - Bentley Systems and EARTHBRAIN have formed a strategic partnership aimed at advancing smart construction [1] Company Overview - Bentley Systems is a leading company in the field of software solutions for infrastructure engineering [1] - EARTHBRAIN specializes in smart construction technologies and solutions [1] Strategic Partnership Details - The partnership is expected to leverage both companies' strengths to enhance the efficiency and effectiveness of construction processes [1] - The collaboration will focus on integrating advanced technologies to promote innovation in the construction industry [1]

Core Insights - Bentley Systems announced the winners of its 2025 Partner Excellence Awards, recognizing excellence in product sales, services, and training [1][9] - The awards were presented during the 2025 Sales Partner Summit held in Berlin, Germany from October 28 to 30, 2025 [2] Award Winners - **Partner of the Year**: CAD Journey, recognized for rapid growth and driving Bentley solution adoption in North America [4] - **Business Transformation**: Archway Systems Inc., acknowledged for strategic business transformation and delivering measurable value globally [4] - **Customer Experience**: Geomatex, honored for leveraging advanced reality modeling and digital twin technologies in the Administrative Capital Urban Development project in Egypt [4] - **Rapid Time to Value**: Astasoft Sdn Bhd, recognized for consistent growth and a customer-focused approach in Malaysia [4] - **Rising Stars**: - Software.com.br Tecnologia e Consultoria, recognized for strategic growth in Latin America [5] - Microgenesis CADsoft, acknowledged for rapid growth in India, achieving Million Dollar Club status in just over a year [5] Event Highlights - The awards showcased outstanding submissions from Bentley partners, emphasizing innovation, strategic thinking, and exceptional business results [3] - The winners and finalists will be featured in Bentley's Partner Spotlight Series, highlighting their projects and achievements globally [5] Company Overview - Bentley Systems provides infrastructure engineering software, helping professionals design, build, and operate resilient infrastructure across various sectors [7] - Founded in 1984, Bentley is recognized as a partner of choice for engineering firms and owner-operators worldwide, with a focus on digital twin solutions to enhance project delivery and asset performance [7]

Overview of the AI in Construction Market - The AI in construction market is projected to grow from USD 11.1 billion in 2025 to USD 24.3 billion by 2030, with a compound annual growth rate (CAGR) of 16.9% driven by investments in digital infrastructure, labor shortages, and stricter safety regulations [1][2] - The adoption of AI technologies is increasing among contractors, who utilize predictive analytics, cloud-based platforms, and autonomous equipment to enhance resource management, reduce overruns, and ensure safety compliance [1][2] Key Trends in AI In Construction Market - **Predictive Analytics for Cost and Schedule Optimization**: Predictive analytics tools allow contractors to simulate various scenarios using real-time data, helping to anticipate delays and cost overruns, thus reducing labor costs and project delays [3] - **Construction-Site Safety Enhancement**: AI-powered safety solutions utilize computer vision and sensors to monitor compliance and detect equipment issues, significantly reducing incident rates and insurance claims [4] - **Automation and Robotics Adoption**: Labor shortages are prompting the use of robotics for tasks like bricklaying and rebar tying, which improves accuracy and reduces manual labor hours [5][6] - **Sustainability and Cloud-Based Deployments**: AI solutions assist firms in meeting environmental standards by optimizing energy use and monitoring emissions, while cloud-based platforms facilitate real-time collaboration and data centralization [7] Market Segmentation in AI In Construction Industry - The market is segmented by components (solutions and services), applications (planning, safety, autonomous equipment, etc.), deployment (cloud, on-premises, hybrid), project lifecycle phases, end-users, and project types [10] Key Players in AI In Construction Market - Major companies include Autodesk, Smartvid.io, Doxel, Trimble, and Bentley Systems, each offering various AI-driven solutions for project planning, safety management, and efficiency tracking [9][12] Conclusion - The AI in construction market presents substantial growth opportunities, with a focus on efficiency, safety, and sustainability driving adoption across various regions, particularly in North America and Asia Pacific [11]

Core Insights - Bentley Systems unveiled new infrastructure AI capabilities and an Infrastructure AI co-innovation initiative at its Year in Infrastructure conference, emphasizing the role of trustworthy AI in enhancing engineering productivity and transforming workflows [1][19]. AI Capabilities and Applications - Bentley's OpenSite+ is the first engineering application utilizing generative AI for civil site design, achieving project delivery up to 10 times faster without compromising accuracy [1][12]. - New AI-powered applications for substation design and construction management were introduced, aimed at accelerating AI adoption in project delivery [4][12]. - AI enhancements will be integrated into existing applications like OpenRoads Designer and OpenRail Designer, with a new AI agent for automating drawing annotations set for general availability in November 2025 [6]. Industry Collaboration and Initiatives - The Infrastructure AI Co-Innovation Initiative invites engineering firms and asset owners to collaborate on developing next-generation AI workflows, reflecting the evolving balance between AI-driven and human-driven work [15][16]. - Nearly one-third of submissions for the Going Digital Awards incorporated AI, highlighting the growing integration of AI in infrastructure projects [2][3]. Survey Findings - A global survey revealed that about half of infrastructure professionals are piloting or have implemented AI, focusing on enhancing design productivity and automating documentation processes [3]. Commitment to Data Stewardship - Bentley emphasizes data stewardship, ensuring users retain control over their data used for AI training, with strict governance around AI model training [9][10]. - The introduction of the Data Agreement Registry aims to provide transparency regarding how data is utilized in training AI models [10]. Future Outlook - Bentley's vision for AI is to empower infrastructure engineers rather than replace them, with a focus on real-world context to ensure precision in engineering [2][11]. - The company aims to shape the future of infrastructure through collaboration with users, leveraging AI to optimize decisions and outcomes across the infrastructure lifecycle [14][16].

Core Insights - Bentley Systems announced the launch of Bentley Infrastructure Cloud Connect, a foundational layer designed to enhance connectivity among data and people throughout the infrastructure lifecycle and value chain [1][15] Group 1: Product Features - Bentley Infrastructure Cloud Connect provides a connected data environment, allowing infrastructure professionals to access and manage project and asset data in one place, improving collaboration from design to operations [2][3] - The platform supports over 50 distinct file formats and integrates with various enterprise systems, creating digital twins of assets in their built and natural environments [3][4] - A unified web experience visualizes infrastructure data in full geospatial context, enhanced by Bentley's Cesium 3D capabilities, and includes a mobile app for project connectivity [5][6] Group 2: User Benefits - Early adopters report that the platform has facilitated access to curated views of 72 projects for over 900 external stakeholders from 86 organizations, helping to avoid costly missteps and save millions in potential rework [3] - Connect enables seamless collaboration across infrastructure ecosystems, allowing users to share files, capture feedback, and manage deliverables efficiently [4] Group 3: Future Availability - Bentley Infrastructure Cloud Connect is set to become generally available in December 2025, serving as the entry point to more advanced workflows in ProjectWise and AssetWise [6]

Core Insights - Bentley Systems has announced the availability of reality modeling services in Cesium, enhancing its open platform for both the built and natural environment [1] Company Summary - The introduction of reality modeling services signifies a strategic advancement for Bentley Systems, aiming to improve the integration of digital and physical environments [1]