Bentley(US:BSY)2026-02-26 14:17Financial Data and Key Metrics Changes - For the full year 2025, total revenues reached $1,502 million, growing 11% on a reported basis and 10% in constant currency [31] - Subscription revenues grew 13% reported and 12% in constant currency, now representing 92% of total revenues, up 2% from 2024 [32] - Free cash flow generation for the year totaled $520 million, up 24% year-over-year, with a free cash flow margin of 35% [5][34] Business Line Data and Key Metrics Changes - The E365 initiative now comprises 45% of subscription revenues, an increase from 42% in 2024 [32] - The asset analytics strategy reached a $50 million run rate milestone for asset consumption revenue in 2025, with significant contributions from acquisitions [15] - Perpetual license revenues were flat for both the quarter and the full year, while service revenues declined by 6% reported and 7% in constant currency for the full year [32] Market Data and Key Metrics Changes - The resources sector was the fastest-growing sector, driven by the performance of Seequent, which is expanding into critical resources [25] - The Americas region saw strong growth, supported by favorable macro conditions for infrastructure investment, with the U.S. market remaining healthy [26] - Growth in EMEA was led by the Middle East, with expectations for continued strong performance in 2026 [27] Company Strategy and Development Direction - The company is focusing on embedding AI capabilities into its products and enabling users to build their own AI-driven workflows [19] - Bentley Systems aims to leverage AI to enhance engineering work, automate design tasks, and optimize entire designs [20] - The strategy includes a commitment to data stewardship, ensuring users control their data used for AI training [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2026 outlook, expecting total revenue growth in the range of 11%-13% in constant currency [37] - The macro environment for 2026 is expected to remain consistent with 2025, with strong growth in most sectors except for facilities and commercial buildings [60] - AI is viewed as an opportunity rather than a risk, with expectations that it will transform infrastructure engineering business models [7][18] Other Important Information - The company reduced its net debt leverage to a healthy 2.1x, providing strategic flexibility for future acquisitions [36] - The company retired its 2026 convertible notes, reducing the fully diluted share count by approximately 3% [36] Q&A Session Summary Question: What elements could push constant currency ARR growth closer to the higher end of the range? - AI is contributing to asset analytics growth, but it may take time for this to reflect in ARR due to the nature of inspections not being annual [46] Question: Is the $400 million for programmatic acquisitions consistent with past amounts? - The company is open to expanding M&A opportunities beyond asset analytics now that leverage is at a more optimal level [51] Question: Are you seeing changes in infrastructure budgets or delayed projects? - The macro environment is consistent with 2025, with strong growth in most sectors, but China is experiencing a slowdown [60] Question: How much of the services revenue recovery is driven by asset analytics versus core Maximo business? - The recovery is primarily driven by improvements in the IBM Maximo services business, with asset analytics contributing minimally [64] Question: Can you discuss the new packaging for ProjectWise and its impact on guidance? - The new packaging was released in Q4 and is expected to resonate well with accounts, supporting growth going forward [68] Question: How is the company leveraging its network for AI design? - The company is engaging with accounts to evolve its engineering applications to support AI-driven workflows, focusing on adoption over monetization [71]