Bentley(BSY)2025-05-07 13:15Financial 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]