Bentley Systems (BSY -3.10%), a global provider of infrastructure engineering software, reported its second quarter 2025 financial results on August 6, 2025. The most notable outcome was a beat on adjusted (non-GAAP) earnings per share, which landed at $0.32 versus the $0.28 analysts had forecast. Revenue (GAAP) also edged past expectations at $364.1 million, representing a 10.2% increase in GAAP total revenues from the same period the year before. While the company delivered in line with its guidance, operating income margin narrowed, and free cash flow (non-GAAP) weakened modestly. Overall, the quarter showed resilient topline growth supported by strong recurring revenue streams and ongoing investment in product innovation, despite competitive pressures on margins.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.32 | $0.28 | $0.31 | 3.2% |
| Revenue | $364.1 million | $363.6 million | $330.3 million | 10.2% |
| Operating Income Margin | 23.2% | 24.3% | (1.1) pp | |
| AOI less SBC Margin (Non-GAAP) | 28.9% | 28.8% | 0.1 pp | |
| Free Cash Flow | $57.0 million | $59.5 million | (4.2%) |
Source: Analyst estimates for the quarter provided by FactSet.
Company Overview and Business Focus
Bentley Systems provides software solutions that enable engineers, architects, and construction professionals to design, build, and operate critical infrastructure. Its core product lines serve sectors such as public works, utilities, resources, and industrial facilities. The company’s technology portfolio includes digital twin platforms, advanced simulation tools, and cloud-based infrastructure management software.
In recent years, Bentley Systems has placed major emphasis on digital twin technology. Digital twins create digital representations of real-world infrastructure assets, enabling users to simulate, analyze, and improve performance. With subscription-based revenues now making up 92% of the top line, recurring sales provide stability. Sector diversification and global reach are also central: the largest portion of revenue comes from public works and utilities, reducing exposure to cyclical markets like commercial real estate and industrial sectors.
Quarter Highlights: Revenue Growth, Product Advances, and Market Trends
The quarter saw GAAP revenue reach $364.1 million, narrowly surpassing consensus expectations. Recurring revenues remained robust. Subscriptions revenue accounted for $333.5 million, up 12.1% year-over-year, and made up 92% of total revenue. Annualized recurring revenue (ARR) increased to $1,379.2 million, growing 11.5% year over year on a constant currency basis. The dollar-based net retention rate—representing how much existing customers are spending compared to last year—improved to 109% for the last twelve months ended Q2 2025, showing healthy customer engagement and upselling.
Profitability slightly weakened compared to a year ago, as reflected by a lower operating income margin. Operating income margin (GAAP) was 23.2%, down from 24.3% in Q2 2024. Nonetheless, expense management showed up in the relative stability of AOI less stock-based compensation margin at 28.9%. Free cash flow, often seen as a marker of sustainability for technology companies, was $57.0 million, down from $59.5 million for Q2 2024, while emphasizing a stable balance sheet to support ongoing operations.
Bentley Systems continued its push into digital twin technology. Its iTwin platform, software designed for managing full-life digital infrastructure models, benefited from the integration of technology from its Cesium acquisition. Strategic partnerships expanded, highlighted by integrations with Google Street View and Google’s Vertex AI, which enhanced asset analytics for transportation infrastructure. A major example was the Blyncsy product family, which uses geospatial and AI technologies to automate asset inventories and condition monitoring for roads—offering a significant efficiency advantage over manual inspections.
Sector diversification and geographical spread remained key to Bentley’s results. Public works and utilities comprised approximately 59% of sector-attributable annualized recurring revenues (ARR). International growth was notable, especially in India and the Middle East, due to continued government infrastructure investment. In contrast, exposure to China further decreased to less than 2.5% of ARR as Bentley managed risks in that market.
Other noteworthy developments included a continued drive to grow recurring enterprise agreements through the E365 program. This program, focused on multi-year contracts with minimum annual spends, helps dampen revenue volatility. The company also highlighted the role of artificial intelligence (AI) in product innovation—such as Open Site Plus, which automates parts of engineers’ design workflows, and increased use of AI for internal development productivity. Bentley again reaffirmed its commitment to sustainability and environmental, social, and governance (ESG) standards, positioning its technologies as enablers for greener, more resilient infrastructure.
Looking Ahead: Guidance and Key Watchpoints
Management maintained its outlook for the full year, expressing confidence in both its recurring business model and the capacity for continued topline growth. Outlook commentary confirmed expectations for seasonality in results, with the third quarter likely to be the year’s lowest for revenue and renewals, and the fourth quarter anticipated to be the strongest. No changes to baseline annual guidance were noted.
The executive team pointed to the potential for normalization due to seasonality, as well as the impact of ongoing investments in innovation. Management additionally noted its intent to use the company’s strong balance sheet for strategic share repurchases, maintaining its dividend, and funding targeted acquisitions.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
