BSY

Bentley Systems’ results for Q2 drew a modestly negative market response, despite the company meeting Wall Street’s revenue expectations and delivering a non-GAAP profit above consensus. Management attributed the quarter’s performance to ongoing strong demand in public works and utilities and robust growth in the resources sector, especially mining. CEO Nicholas Cumins highlighted that engineering productivity and the adoption of AI-driven workflows are becoming central to customer needs as infrastructure projects face persistent labor constraints. The company also noted especially healthy project backlogs for small and mid-sized businesses and strong renewals in its Enterprise 365 commercial program. Is now the time to buy BSY? Find out in our full research report (it’s free). Revenue: $410.7 million vs analyst estimates of $411.6 million (12.8% year-on-year growth, in line) Adjusted EPS: $0.35 vs analyst estimates of $0.32 (9.8% beat) Adjusted EBITDA: $143.4 million vs analyst estimates of $141.5 million (34.9% margin, 1.3% beat) Operating Margin: 21.6%, down from 23.2% in the same quarter last year Net Revenue Retention Rate: 109%, in line with the previous quarter Annual Recurring Revenue: $1.54 billion vs analyst estimates of $1.53 billion (11.4% year-on-year growth, in line) Billings: $406.9 million at quarter end, up 10.5% year on year Market Capitalization: $11.08 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Matt Hedberg (RBC Capital Markets) asked about sustaining ARR growth into the second half; CEO Nicholas Cumins attributed momentum to resources and public works, but noted that reaching the upper range would require continued sector strength and possibly acquisitions. Joseph Vruwink (Robert W. Baird) questioned the potential for higher software spend per infrastructure asset; Executive Chair Gregory Bentley explained that AI and asset analytics will unlock further value, with room for significant spend increases over time. Jason Celino (KeyBanc) requested updates on PLS growth and the effect of permitting reform; Cumins confirmed PLS outperformance in both U.S. and international markets, and expects permitting reform to accelerate growth when enacted. Sitikantha Panigrahi (Mizuho) probed the timeline and approach to AI monetization; Cumins clarified that the focus remains on adoption and validation, with monetization planned for next year and a flexible approach to integrating third-party AI systems. Jay Vleeschhouwer (Griffin Securities) asked about R&D priorities and expense trends; Cumins and Andre outlined increased investment in AI for engineering applications, infrastructure cloud, and supporting functions, emphasizing the need to address AI market complexity and accelerate adoption. In coming quarters, the StockStory team will watch (1) progress on enterprise and SMB adoption of AI-enabled engineering applications, (2) the pace and scale of asset analytics deals as Bentley moves toward monetization, and (3) signs of sustained momentum in core sectors—especially resources and electric grid. Execution on R&D investments and clarity on AI commercial models will also be key milestones. Bentley Systems currently trades at $36.13, in line with $36.04 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:15 a.m. ET Executive Chair - Gregory Bentley Chief Executive Officer - Nicholas Cumins Chief Financial Officer - Werner Andre Investor Relations Officer - Eric Boyer Eric Boyer: Good morning, and thank you for joining Bentley Systems' Q2 2026 results. I'm Eric Boyer, Bentley's Investor Relations Officer. On the webcast today, we have Bentley Systems Executive Chair, Greg Bentley; Chief Executive Officer, Nicholas Cumins; and Chief Financial Officer, Werner Andre. This webcast includes forward-looking statements made as of August 6, 2026 regarding the future results of operations and financial position, business strategy and plans and objectives for future operations of Bentley Systems Inc. All such statements made in or contained during this webcast other than statements of historical fact are forward-looking statements. This webcast will be available on Bentley Systems Investor Relations website at investors.bentley.com on August 6, 2026. After our presentation, we'll conclude with Q&A. And with that, let me introduce the Executive Chair of Bentley Systems, Greg Bentley. Gregory Bentley: Welcome, and thanks, as always, to each of you for your interest and attention. Bentley Systems' positively exemplary operating results for '26 Q2 and the year as we see it, accord with our expectations to sustain foreseeably our dependable double-digit growth record. Early in 2025, I quantify that our outlook range for last year would serve to at least double over the 5 years following our 2020 IPO. The key financial metrics of ARR, revenues, profitability and SBC burdened free cash flow, and it can be confirmed that we met those thresholds. And now updating this and looking forward, a significant factor in my confidence is the boundless regeneration of demand within our infrastructure engineering end markets. with high economic returns globally and across sectors on investments in resilience, capacity and self-sufficiency. Within these priorities, relative proportions fluctuate presently most benefiting our offerings for integrated grid and for subsurface resources. But infrastructure engineering consumption has tended overall to remain predictably consistent, perhaps due to the constancy of engineering resource constraints. To finally alleviate this engineering capacity bottleneck and thus further realize infrastructure investment potential, through AI enablement, is everyone's appropriate priority as the resulting benefits from improved infrastructure engineering, throughput and quality will be broadly shared across project delivery firms and infrastructure owner operators and all of us as their constituents. Bentley Systems will especially benefit as our successive and multifaceted hybrid AI innovations continue for years to come on stream. I expect the established attended consumption of our software to continue growing as every day for every engineer will become increasingly valuable at the helm of ever more specialized AI leveraging applications. But this business model will, in due course, be supplemented and potentially multiplied by monetizing agentic API consumption of our modeling and simulation software primarily to optimize designs at machine speed, accelerating the proprietary AI strategies of infrastructure engineering firm. And our emerging asset analytics offerings monetized through asset consumption subscriptions per asset are breaking through to finally leverage digital twins and operations and maintenance for infrastructure owner operators. Adding to my confidence in looking forward, these incremental AI-led consumption opportunities are uniquely accessible to Bentley Systems by virtue of our established positioning as the major comprehensive infrastructure engineering software provider across both the leading infrastructure project delivery and owner-operator enterprises. We have earned our standing as a trusted digital quartermaster for each of these major infrastructure engineering organizations over decades of proactively embracing and incorporating potentially disruptive technologies and business models so that no one ever needs to start over in order to stay ahead of the innovation curve. In my now long experience, the winning strategy for every technology opportunity is hybrid, integrating, in this case, AI advances within accretive overall continuity. Facilitating progressive enterprise AI adoption is the invigorating current priority for our 1,000 success force engineers embedded in E365 accounts. Last quarter, I talked about AI's auspicious economic leverage for engineering firms whose work pre-AI has been constrained by the limiting supply of infrastructure engineers. Underscoring our incumbency advantage in helping these firms to leverage their engineers with AI agentic assistance to perform more work and particularly to optimize designs, 470 of the 610 engineering news record global top design firms ex-China, are BSY accounts, averaging ARR of nearly $1 million each. I will now similarly quantify our comparable point of departure for the leading infrastructure owner operators. For decades, the authoritative global ranking of the largest owner-operator organizations measured by their fixed tangible asset value net of depreciation, has been the annual Bentley Infrastructure 500 top owners rankings. The upcoming 2026 BI 500 will be published on bentley.com. The most recent 2025 BI 500, it no longer includes Russia, own and manage about $21 trillion of net infrastructure assets. Not quite half of those top owners assets are in the public works/utilities infrastructure sector, followed by industrial and then resources sectors, which together comprise most of the balance. In net asset proportions, the top owners are located about half in the Americas, followed by EMEA and Asia Pacific. In particular, the 43 top owners in China account for just under 10% of these assets and because it's with Chinese state owners that we encounter unique geopolitical obstacles currently, to quantify BSY penetration, the following charts are ex-China. Over 3/4 of the ex-China top owners, managing well over 80% of such infrastructure assets or BSY accounts. Excluding top owners in the commercial/facilities sector, where we are less focused, 90% of ex-China top owners infrastructure assets are managed by BSY accounts. 153 ex-China top owners, holding the majority of these accounts net infrastructure assets have already adopted Bentley Infrastructure Cloud with most using project-wise. They are thus accumulating engineering data for delivered projects, which will make AI-enabled digital twins more valuable. And quantifying the BSY spending by these top owners I use current year run rate, which beyond ARR includes our relatively minor amounts of license sales, professional services and other subscriptions, to fully capture the offerings which are exclusive to owner-operators of cohesive and for Asset Analytics. These 346 top owner accounts spent annually over $330 million in run rate with us, averaging about $1 million per year for those not in the commercial/facilities sector, and collectively representing about 20% of our overall business. Accordingly, annual BSY expenditures currently averaged $21 per $1 million of the $15.5 trillion of net infrastructure assets owned by these 346 ex-China top owners are our BSY accounts. And introducing and fully developing infrastructure AI, it is a tremendous and literally unique advantage for Bentley Systems to be in the pole position with virtually all of the infrastructure engineering organizations with the most to gain in both project delivery and operations and maintenance. For every top design firm and top owner account, infrastructure engineering and enhanced Bentley systems are mission-critical factors of their production. It is certain that in each case, their current expenditure levels on software in proportion to their respective engineering labor and asset values will be multiplied by orders of magnitude as AI is inexorably and advantageously integrated to improve infrastructure, capacity, quality and economics. In sum, I believe this enterprise account springboard will continue foreseeably to improve Bentley Systems on economics and growth prospects. So at this point in time, when investable sectors seem ever more subject to comparisons from first principles, let's update our own point of departure. Free cash flow as a valuation benchmark has the advantage of meaningful commonality across investment sectors. However, it's uniquely salient for software, in particular, given the opacity of 606 subscription accounting other than for BSY, with our consumption dominated revenues being recognized primarily ratably to the virtual exclusion of multiyear noise. Here is shown in the past 5 years of BSY's free cash flows aggregated within trailing 4 quarters ending in each Q2 and for comparison to the latest for '26 Q2. Over this period, these annual cash flows compounded at an average rate of 14.7% annually to reach $498 million over the last 12 months. For mature software companies, another rightful valuation consideration is stock-based compensation, given its prevalence and typical magnitude, I don't consider that cash flow should be counted as free to the extent that it needs to be expanded for stock repurchases to offset resulting dilution. Shown here as accordingly offsetting free cash flow is BSY's operating, that is not acquisition-related, stock-based compensation for these periods. The remainder is BSY's truly free cash flow as burdened by operating SBC. So burdened free cash flow reached $426 million over the last 12 months, having expanded over this period at a CAGR of 16.7%. Our consistent low double-digit annual growth rate in ARR compounded by our established annual improvement of about 100 basis points in AOI less operating SBC margin served indeed to double over the last 4 years, this valuation metric, which to me seems most economically appropriate to us shareholders. And consistent with Bentley Systems conscientious stewardship of stock-based compensation, over most of our public history, we have tended to allocate free cash flow to stock repurchasing an approximate keeping with annual requirements to offset SBC dilution. Here are the quarterly expenditure amounts for all repurchases, including de facto repurchases associated with net distributions through this period up until '25 Q3. Even though BSY has had a discretionary share repurchasing authorization throughout, there hasn't been a very significant opportunistic that is inverse correlation between our share price and overall repurchase expenditures. What changed since late last year is, by then, we had resolutely worked down the debt leverage we incurred to finance the platform acquisitions of Seequent and Power Line Systems in 2021 and 2022 to a tolerably optimum range of about 2x. This has enabled us, since then to allocate more capital to discretionary stock repurchases without changing either on ongoing cash flow funding for programmatic acquisitions nor on balance sheet preparedness for potential larger scaled platform acquisitions. What eventuated during '26 Q2 was a stock price, which at our marginal financing cost enabled repurchasing to be accretive just on financial fundamentals to a significant and reasonable basis for valuation. We variously repurchased 3.1 million shares during '26 Q2 and subject to remaining within an optimal leverage range, I expect us to continue to responsibly act upon any such opportunities going forward. Indeed, the net result of this SBC and corresponding repurchasing discipline over this period has been to avoid share dilution. Shaded here at top is the portion of our fully diluted shares attributable to our convertible debt. In fact, the redemption of our 2026 maturing convertible debt during '26 Q1 and reduced our fully diluted share count by about 3% as will presumably recur in '27 Q3 with the maturity of our remaining convertible debt. So reflecting a compounded average growth rate of negative 1% through this period. At the end of '26 Q2, our fully diluted share count was down to 319 million shares. And we thank you for being among or interested in coming or informing those of us who are the holders of those shares. And now over to Nicholas, and then Werner to cover this quarter's development. Thank you. Nicholas Cumins: Thank you, Greg. We had another strong quarter, executing consistently against a backdrop that keeps working in our favor. The world needs more infrastructure and resources, and it needs them faster than they can be delivered. Everywhere we look across accounts, large and small, the constraint is the same. There are not enough engineers which is why engineering productivity, making every engineer both more efficient and more effective is at the core of our AI strategy. Let me pick up the AI threat from last quarter. At the end of 2025, we launched our infrastructure AI initiative. And last quarter, I reported that leading engineering firms and owner operators were asking us to instrument our applications to power their own AI-driven workflows. I also shared that we had released our first MCP server for STAAD. This quarter, I want to show you how far we have come and why we are confident in the approach. Our conviction is that when it comes to mission-critical infrastructure engineering our applications and today's AI models are far more powerful together than apart because each does something, the other cannot. Our applications are deterministic. They perform the engineering itself, the modeling, the analysis and the simulation, and that work is trusted because it has been proven over decades embedded in workflows across infrastructure value chains. AI models are different in nature. They are probabilistic. What they contribute is natural language processing, high-level reasoning, and the ability to break a problem down and generate instructions that our applications then execute with engineering precision. The MCP server is the interface between the 2, turning the AI's instruction into real validated work inside the application. One point I want to stress, we are deliberately open. This is not a walled garden. Our accounts can pay our applications with which every assistant and whichever model they have to standardize on, whether Bentley Copilot, Anthropic Claude, Google Gemini or OpenAI ChatGPT. Our aim is to be the trusted engineering layer beneath all of them, whichever AI model happens to lead at a given time. Now to the progress. Last quarter, we had released a first MCP server for STAAD. Since then, we have released 5 more across Bentley open applications with more to come. The response from our accounts has been very positive, once they grasp what is possible. This is still early and a great deal of our work today is education on 2 fronts. First, we are helping users cut through the considerable noise around AI and we have made this a priority with several campaigns underway to show what is generally achievable now. Second, we're staying close to our accounts as they adopt. And here, application engineers and solution architects are proving invaluable serving in effect as forward deployed engineers, helping our accounts evaluate and integrate these new capabilities into their workflows. Finally, on the commercial model. As discussed last quarter, our next steps were to instrument more applications and to validate the commercial model for this new usage pattern. The first is well underway. On the second, our priority remains in order, adoption, exploration and validation with monetization to follow, and we continue to be transparent with our accounts about that sequence. Earning adoption and trust first is precisely what will let us capture our fair share of the value that will be created as our applications are used at machine speed with AI. Now turning to our business highlights. Our year-over-year ARR growth for Q2 accelerated to 12%. Our net revenue retention rate remained high at 109%, consistent with previous quarters and underscoring the stability and growth within our existing accounts. Our Enterprise 365 commercial program continues to drive steady growth. We were particularly pleased with our renewals in the quarter as Q2 is typically our second largest quarter for renewals. This strong performance gives us confidence for the rest of the year. New logos contributed again 300 basis points of ARR growth primarily within the SMB segment. Through Virtuoso, our flagship commercial program for SMB accounts, we again added over 600 new logos in Q2. The underlying SMB market sentiment remains positive with accounts reporting healthy project backlogs extending well into 2027. Accounts are increasingly viewing Bentley Technology as part of their business backbone rather than point solutions for specific projects, which validates our cross-selling and upselling efforts. Turning to our performance by infrastructure sector. Resources was our fastest-growing sector in total driven by mining once again, with strength across geographic regions. The fundamental drivers for this demand are macroeconomic and long-term. Countries around the world are increasingly prioritizing self-sufficiency given ongoing geopolitical tensions and supply chain disruptions. In addition, the global push for electrification, including to power AI data centers also depends on securing critical minerals. Our largest sector, Public Works and Utilities delivered another strong quarter. driven by sustained infrastructure investment worldwide. Within Public Works and Utilities, Power Line Systems, or PLS, continues to be the primary driver of growth in our electric grid business benefiting from strong global demand for grid transmission, capacity expansion and resiliency. I will take a deeper dive into PLS and our broader electric grid portfolio shortly. Growth in industrial sector continued to be solid, while commercial facilities remain relatively flat. Turning to our tone of business by geographic region. In the Americas, our largest region, the U.S. continued to deliver strong growth. The underlying fundamentals of our accounts remain very strong, characterized by double-digit backlogs and a bullish outlook on their long-term growth, driven primarily by transportation, water, power and data centers. Public funding at the federal and state level remains robust, supplemented by a healthy influx of private capital funding. Latin America delivered another very strong quarter, led by mining and an increased focus on transportation in the region. EMEA delivered a solid quarter as the overall region remains well invested. The quarter benefited from strong renewals at a number of large accounts. Large ongoing natural infrastructure programs are driving demand in the U.K. Fundamentals in Europe are also strong. In Germany, while the EUR 500 billion infrastructure fund is in place, actual deployment has been slow as early firms are backfilling existing deficits, delaying the impact on new projects. In the Middle East, despite the ongoing conflict, accounts have returned to work, consumption has rebounded and deals are progressing again. Asia Pacific delivered strong growth with Australia leading the way as performance bounced back strongly followed closely by India. China representing only about 2% of ARR, continues to operate against the same economic and geopolitical headwinds. Across most of the region, Rail is a massive long-term opportunity with major projects in Australia, India, The Philippines and in Indonesia. Offshore oil and gas is also an investment priority across the region, driven by major field developments in Southeast Asia and offshore redevelopment in India. We are well positioned for this work with our SACS offshore design and analysis engine. Now I would like to highlight the continued outperformance of our Power Line Systems. PLS is the gold standard for the design and analysis of overhead electric power transmission and distribution lines and their structures. It is part of our broader electric grid portfolio, encompassing open utilities, substation plus and SPIDA that together allows us to address the full spectrum of grid infrastructure from transformation and distribution to substations. Looking back 4.5 years since the acquisition, PLS has become a vital part of our core business and the financial pillar of our electric grid offering. We have also seen significant growth internationally, leveraging Bentley's established global reach and go-to-market engine. In fact, PLS revenue outside of the U.S. is now as large as the entire PLS business was when we acquired it in 2022. Reliable energy delivery is more critical now than ever as electrification and the rapid expansion of AI data centers placed unprecedented stress on the global grid. In the U.S. alone, the network requires an estimated 35 gigawatts of additional capacity by 2030. PLS software is instrumental in bridging this power gap. We're seeing our users apply PLS at impressive scale to overcome real-world physical and operational challenges. For instance, Exo digitally stress-tested century old transmission towers spanning the Ohio River, allowing the ETT to engineer targeted stabilization that saved $80 million and avoided up to a decade of permanent delays. And when 120 miles an hour winds destroyed a transmission quarter in Illinois, Toth & Associates used PLS-CADD to redesign the network digitally accelerating the rebuild to restore power 18 days ahead of schedule. The vibrancy of this ecosystem was on full display during Q2 at our biannual PLS User Group Conference in Madison, Wisconsin. Which drew more than 500 attendees from nearly 300 companies, including over 90 utilities representing 20 countries. A central theme of the conference was AI where we announced 3 new MCP servers for PLS products, including PLS-GRID. This is an important milestone because it demonstrates how with MCP servers, we can empower AI systems to not only interact with engineering applications, but also directly with rich engineering data by connecting AI systems to PLS-GRID via MCP. Users can query vast digital twin repositories in natural language, ask you questions like find the 100 weak structures in my entire grid or which transmission line spans will thermally limit the interconnection of the proposed AI data center. Unlocking this engineering data directly is precisely the direction we're taking across a broader Bentley infrastructure cloud enabling our users to extract actionable intelligence across their project files and asset information at machine speed. With PLS as a critical component of our electrical grid offering and very much part of our core now, Bentley is uniquely positioned to continue to benefit from the massive investments required to power an electrified future. In summary, Q2 was a strong quarter and we enter the second half of the year with great confidence in our disciplined execution and market fundamentals. And with that, over to you, Werner, for a detailed review of our financial results. Werner Andre: Thank you, Nicholas. We are pleased with our performance for the first half of the year. Our second quarter results extend the momentum from the first quarter and set us up well for the balance of 2026. Total revenues for the second quarter were $411 million growing 12.8% year-over-year and 12.2% in constant currency. For the first half of the year, total revenues increased 13.6% or 12.1% in constant currency. Our performance continues to be led by our mainstay subscription revenues, which represented 92% of total revenues during the quarter. Subscription revenues increased 13.6% year-over-year or 13% in constant currency, reflecting continued strength across both our E365 and SMB initiatives. For the first half of the year, subscription revenues increased 14.1% or 12.6% in constant currency. In our small and less predictable revenue streams, Services revenues increased 9.4% or 8.7% in constant currency, driven by continued improvements in Maximo-related services activities within cohesive extending the recovery trend we discussed last quarter. For the first half of the year, services revenues increased 18.8% or 16.5% in constant currency. Perpetual license revenues for the quarter were approximately $10 million, down roughly $0.5 million year-over-year and approximately $19 million for the first half, down about $2 million. Perpetual license sales remain a very small part of our business with approximately 2% of total revenues. As of June 30, our last 12 months recurring revenues were $1.486 billion, an increase of 13.5% year-over-year or 11.8% in constant currency and represented 93% of total revenues. Our last 12 months constant currency account retention rate remained consistent at 99%, and our constant currency net revenue retention rate remained at 109%, consistent with recent quarters. The combination of our high retention rates and new business momentum gives us confidence in the continued durability of our recurring revenue growth. Now turning to ARR. We ended the second quarter with ARR of $1.536 billion at quarter end spot rates. On a constant currency basis, our year-over-year ARR growth rate was 12%, and our sequential quarterly growth was 2.9%, all organic and in line with our expectations for the quarter. We continue to expect our quarter-over-quarter ARR growth seasonality to be similar to 2025 and thus organic year-over-year ARR growth rates to be relatively stable during the year. Our GAAP operating income was $89 million for the second quarter and $215 million for the first half. As I've discussed previously, our GAAP results can be impacted by deferred compensation plan revaluations and other acquisition-related items. Moving to our primary profitability measure, adjusted operating income less operating stock-based compensation, or AOI less operating SBC. AOI less operating SBC was $116 million for the quarter, with a margin of 28.3% and $257 million for the first half with a margin of 30.8%. This performance was in line with our expectations with our first half margin trailing the prior year as we weighted operating investments early in the year compared to 2025. Our first half G&A also reflects our new enterprise-wide finance and Quote-to-Cash platforms, which went live during the second quarter, driving a step-up in cost around go-live that was contemplated in our outlook. Notably, we did not adjust these costs out of our profitability metric. We absorb them within our margin commitment underscoring the quality of our first half performance, while positioning us for greater efficiency and scale. We remain well positioned to deliver on our annual constant currency margin improvement. Our free cash flow for the quarter was $64 million and $252 million for the first half. This result was in line with our expectations and reflects 2 key factors we signaled on our last earnings call. First, our 2025 free cash flow benefited from exceptionally strong collections at year-end, which, as anticipated, created a tougher year-over-year comparison in the first half most pronounced in the first quarter. Second, our plan to weigh operating expenses more towards the first half this year is reflected in our year-over-year comparison for both profitability and cash flows. As a result, and consistent with the framework we shared in our outlook, first half free cash flows represented approximately 47% and of our full year outlook, in line with the 45% to 50% range we guided for the first half. Looking beyond quarterly timing, on the last 12 months basis, free cash flow of $498 million was up 15%, and we remain on track to meet our full year free cash flow outlook of $500 million to $570 million. We continue to execute a disciplined and balanced approach to capital allocation. During the quarter, we closed on a new $550 million Term Loan A under the accordion feature of our credit facility. This transaction was completed at attractive terms and used to repay outstanding borrowings under our revolver, lowering our interest costs. This provides ample capacity to support our strategic priorities, including addressing our mid-2027 convertible notes maturity while also funding potential programmatic acquisitions, ongoing share repurchases and dividends. During the first half of the year, we reduced net debt by $32 million and returned capital to shareholders by deploying $155 million for share repurchases, up meaningfully from the prior year and $42 million for dividends. Our balance sheet supports significant strategic flexibility. At quarter end, capacity under our credit facility was $1.2 billion, and our net debt leverage was 1.9x adjusted EBITDA, consistent with the prior quarter. We continue to actively manage our interest rate exposure, our safeguards include the low fixed coupon on our remaining convertible notes and our $200 million interest rate swap expiring in 2030. Overall, our performance through the first half of the year compared favorably with our expectations. We delivered consistent growth in revenues, recurring revenues and ARR while maintaining disciplined profitability and cash flow generation to remain comfortably within our full year financial outlook. This year, that outlook also includes a range for AOI less operating SBC, reflecting the annual constant currency margin improvement I referenced earlier. With regards to foreign exchange rates, through the first half, the U.S. dollar strengthened relative to the exchange rates assumed in our 2026 annual financial outlook resulting in approximately $5 million less revenue from currency, approximately $2 million in the first quarter and $3 million in the second. If end of July exchange rates were to prevail for the remainder of the year, our second half revenues would be negatively impacted by an incremental $8 million to $10 million relative to the exchange rates assumed in our 2026 outlook. And with that, over to Eric for Q&A. Thank you. Eric Boyer: Thanks, Werner. Before we begin, I just wanted to remind everyone to please limit yourselves to 1 question today. And with that, our first question comes from Matt Hedberg from RBC Capital Markets. Thanks, Werner. Before we begin, I just wanted to remind everyone just limit themselves to 1 question. And with that, our first question comes from Matt Hedberg from RBC Capital Markets. Matthew Hedberg: Sorry, sorry about that. Can you hear me okay now? Eric Boyer: Yes. We can hear you. Matthew Hedberg: Excellent. Thanks for the question. Congrats on the results. And the ARR growth at 12% was certainly impressive here, the acceleration versus last quarter. I guess what are the keys now as we get to the back half of the year on sustaining that growth or even improving? And I know we've talked about maybe getting to the high end or above that and 12%, you're close to that. But I guess I'm wondering like continued success from Asset Analytics? Is there a macro element, anything -- anything that could kind of help us on that trajectory. Nicholas Cumins: Yes. Thank you, Matt. So yes, definitely, we were quite pleased with the performance in Q2, consistent with Q1, an acceleration, nevertheless, because of momentum in resources, which is still our fastest-growing sector and in particular, in mining. And then just general strength in public works utilities, which includes electric grid, but we've seen strength across the sector. So the momentum is definitely there for us to get to the upper part of the range, we will need this momentum to continue, and there's no sign why it will slow down. But we will also need to do an acquisition potentially. And yes, bring in some big deals with Asset Analytics, which is a rather lumpy business, as we discussed in previous calls, right, where we depend a lot on big deals. Gregory Bentley: So I'd say each of those factors that Nicholas mentioned are relatively likely, but they all have to happen together to wind up at the top end of the range and that's what we hope. Eric Boyer: The next question comes from Joe Vruwink from Robert W. Baird. Joseph Vruwink: Great. the discussion on your older customer base, I thought it was interesting, and I know it's not the same basis for comparison that you highlighted last quarter with project delivery firms and kind of your earn rates with those customers. But just the $21 in earn rate for Bentley relative to the $1 million in assets. Where do you think that can go? And I guess inherent in the question is you've grown your portfolio of solutions that are relevant for owners quite a bit over the last 15 years. And so do some of the recently acquired IP or just the way that infrastructure cloud is evolving, unlock a much bigger opportunity with that side of your customer base? Gregory Bentley: Well, it's all of the opportunity with infrastructure and AI to improve the quality, resilience, the life cycle of the infrastructure assets, the other operators benefit from better CapEx, which optimized designs will provide in terms of constructability, less subsurface risk and so forth, things we're working on through our open applications. But just as you say, the biggest opportunity is in operations and maintenance and especially for optimizing that to do only what's needed and what works and for AI to help discern that by operating on badly infrastructure cloud and using the as operated inspection and monitoring that's made possible through asset analytics. So we think we've closed that circle conceptually, leaving a lot of opportunity, and we should monitor that $21 million of net assets just as we do on the correspondingly on the engineering firm side to see how they're going to go about improving their economics by spending more on software and AI together, as Nicholas described. Eric Boyer: The next question comes from Jason Celino from KeyBanc. Jason Celino: Great. Thank you for the update on PLS. I think it's a business that we often kind of forget about. I think when you originally acquired that asset, it was kind of growing similar to Bentley's corporate average, but its margins were meaningfully better. And then I think entering the year, when we thought about permitting reform, that was one of the businesses that could really benefit from it. Are you able to maybe provide an update on maybe the financial profile of what PLS looks like today? And if you've seen any acceleration in the business from any type of permitting reform? Nicholas Cumins: Actually, PLS has been a growth engine from -- almost from the time of the acquisition and very consistent. And the growth has been both in the U.S. and internationally. You heard in the prepared remarks that now our business with PLS outside of the U.S. is as big as the entire PLS business was when we did the acquisition. So we grew very well outside of the U.S. But in the U.S. as well. And in the U.S., we continue to grow despite the lack of permitting reform because there's a lot of investments going into the existing grid, just to make sure that it is capable of keeping up with the demand for more electricity that it is resilient in the face of extreme weather events, et cetera. Therefore, we are well positioned to see our PLS ARR even accelerating as permitting reform goes through. Permitting reform, there's always a lot of discussion. It is, in a sense, a bipartisan topic. Everybody wants it. But we need Congress to get its act together, no pun intended. And conversations are resumed about permitting reform. And a fantastic vehicle for permitting reform would be the new surface transportation bill which has been passed by the House of Representatives, but is now a bit on hold until a bigger decision is made. But yes, there is just a lot of activity for permitting reform in the U.S. And when -- if and when I think it's more about when this goes through, then this will help further grow our PLS business, which is already doing very well. Eric Boyer: Next question comes from Daniel Jester from BMO. Daniel Jester: Sorry, my camera for some reason it's not working. So Greg, in the last couple of quarters, you've talked about sort of the accelerating of the art of what's possible in AI. And in the prepared remarks today, you commented about sort of the opportunity and what you're seeing in your customers. I guess new MCP servers, you've got a lot of opportunity here. I guess from a customer enablement perspective and their ability to harness these tools, are... Eric Boyer: Lost you. Gregory Bentley: I think Daniel was going to ask where do they stand? And that is -- my point was we're embedded closely with the largest engineering firms and operators who are especially the engineering firms in a hurry because of the resource capacity constraints, they could do more business if they could improve efficiency and effectiveness, as Nicholas said. So they're in a hurry. But they understand the best way to get there is a hybrid approach where their AI assistance, their own agents would take advantage of established functionality. And our education is how to put those 2 together into a hybrid approach. I mentioned hybrid, particularly as something which over my career, I've seen repeatedly be the result of innovation waves because there isn't something that's going to take over one particular phenomenon, but a combination together. In addition to the nature of the hybrid, Nicholas described of inference on the part of assistance calling established deterministic engineering logic. Another aspect of hybrid that I expect to come about is in the computing form factor, which will include some -- a lot of or choices for what we could call sovereign AI computing on local and edge devices because in the case of engineering firms of the sensitivity of their intellectual property in the case of owner operators of the cyber risks involved. So anyway, their hybrid directions are going to be where things settle out in the long term. And you probably were asking me about the long term given my longevity. Eric Boyer: Next question comes from Siti Panigrahi from Mizuho. Sitikantha Panigrahi: Just to continue to the prior questions, Daniel's question, maybe. I'll extend that. I mean the opportunity you talked about AI, like, can you give us more concrete signal even directionally, like whether this AI or the commercial model, API consumption, all this. When do you think is kind of going to -- like you can monetize? Is it more end of '26 or '27 even kind of thing. And in that context, you talked about the data and Interface, whether Claude or ChatGPT, does it help Bentley Systems as a platform? Or does it create opportunity for stand-alone companies to pipe the data into these interfaces. How do you differentiate there when Claude or ChatGPT become an integration layer? Nicholas Cumins: All right. So let's go after these different questions one by one. So the signals we're getting from the accounts we're engaging with on this novel way of using our engineering applications. The signal is very positive. The effort on our side is really to cut through the noise because there's so much noise around AI. Obviously, every software provider under the sun is approaching the different accounts, talking about their own abilities. So we need to cut through the noise. And then when infrastructure organizations realize what we're talking about and the potential there then the reaction is very positive. We hear words like, "oh, this is a game changer. This is changing everything. There's a lot of value that's going to be created and so on and so forth." So that's very encouraging. And therefore, we are really sticking to the phasing we talked about before, which is our #1 priority is adoption, exploration validation, right, getting -- making sure that accounts are aware of those capabilities, they're really adopting those capabilities, and they are validating the potential value there and monetization next. And we're very transparent about that exact sequence with our accounts saying, at some point, of course, we will need to monetize. And the reaction from the accounts on the monetization is a shared understanding that indeed the traditional way for us to monetize, which is attended consumption with E365 or user-based subscriptions, and it's all about users wouldn't quite work going forward when so much value is going to be created with AI itself interacting with our applications and using them at machine speed. And therefore, the metrics have to change. So we're taking this time of adoption, exploration, validation of our applications at the time also to validate what is going to be the potential commercial model. So that when we start to monetize, there is great receptivity our accounts on the way we're going to monetize that. We're not planning to monetize this year. We're planning to start monetizing next year. And you should expect us to monetize in a very reasonable way. What we don't want is a big price tag to become suddenly an obstacle for infrastructure organization to use these capabilities. It will be really going against what we're trying to achieve here. We want to unlock a lot of value, and we want to lock a lot of value for all the players of the value chain from the end clients because they will end up having much better design because they've been optimized at machine speed for the engineering firms themselves because potentially this is the opportunity for them now to evolve also their commercial model and capture a fair share of the value that's going to be created and for us as well as provider, right? So we've been very thoughtful, very diligent on how we're introducing these capacities. And then to your last question about us having this very open approach and letting our users use whatever AI systems they want and using those assistants to interact with engineering data that is coming from our systems or third-party systems. We actually want that. We welcome that, right? What we've learned with all the infrastructure organization we've been engaging with in the context of the infrastructure AI initiative is that, we need to be ready for all sorts of permutations and how exactly our applications are going to be used, how Bentley's factory file is going to be used, how data is going to be used, right? Some of them are saying we want to use the Bentley AI system called Bentley Copilot because it's a much better user experience, the users stay with the same applications. Others are saying, no, no, actually, we want to continue to use in other AI systems, for example, Claude because we've been tailoring it with data that is specific to us as an engineering firm, for example, and we don't want users to have to swap and go from one AI system to another. We want them to continue to use exactly the same. That's the kind of feedback that we're getting, which is a lot of creativity, and we need to be ready for all sorts of use cases. In that context, we're very clear that where we are bringing value, where we're adding value and ultimately where we need to monetize is with the underlying engineering applications. And then with the -- and then Bentley Infrastructure Cloud overall, regardless exactly how these applications are used, whether it's with our own co-pilot or with third-party assistance. Regardless our data, the data that has been created with our platform is being used, whether it's through our Copilot or with third-party AI assistant. We need to be completely open to that, and not having any artificial limits in order to do this. Again, we will monetize at the underlying level at the underlying level, which the engineering applications themselves and Bentley Infrastructure Cloud. Eric Boyer: The next question comes from Kristen Owen from Oppenheimer. Kristen Owen: Wanted to dig into the Seequent results a bit and specifically in mining, we're seeing a lot of capital discipline in the space. So I'm wondering if you can unpack for us how much of the growth are you seeing from greenfield versus maybe brownfield expansion versus just this general trend toward adopting digital tools. And then somewhat related, I'm also seeing across my coverage, a lot of M&A in the digital mining technology space. So when you look at your acquisition pipeline, is there -- is this an area where you'd see opportunity for inorganic growth? Nicholas Cumins: Yes. On the -- thank you, Kristen. On the first point, so yes, 2026 is probably going to be a record year in terms of investments in CapEx in mining with -- and we see it around the world, across geographies. So it's very broad-based. And the kind of investment we're seeing is primarily brownfield in order to have a much faster return on investment than high risk, very long-term return on investments, greenfield investments. So it's primarily brownfield. We're seeing it also with the use of our software as we're tracking it, that it's primarily used for brownfield rather than greenfield. And why is that? It's because of this underlying trend of sales efficiency countries around the world who want to get to critical minerals on their own and fast because of the geopolitical tensions, because of the disruption to the supply chains, I think there's a wide understanding around the world on the critical nature of those minerals and they need to be able to access them without obstacles. So that's the underlying trend. And therefore, our growth as well with our software, which is being used for exploration and operations of mines. It's also very broad-based, and we've also seen growth around the world. We've seen it with large accounts and smaller accounts especially with the midsized mining companies. It's very encouraging because it's so broad based, it means this is quite durable from that standpoint. Then in terms of M&A, our appetite remains the same. We did indicate already last quarter that besides Asset Analytics, which remains a big priority. We are definitely looking for other opportunities, including in resources. If we see some assets out there that can help us exceed our vision that can help us excel our strategy and they can fill some gaps that we have in helping mining companies get a better understanding of the subsurface, then we'll do it. Whether -- by the way for mining, it could be also in geothermal, other sources of energy, resources overall. Gregory Bentley: It's still our expectation to be able to do that this year. Eric Boyer: The next question comes from Faith Brunner from William Blair. Faith Brunner: Maybe just wanted to jump into some of the AI noise. It seems like lately, we hear a new announcement from anyone talking about some new AI solution, whether it's a broad infrastructure use more specialized. So maybe what are you guys thinking about as the competitive landscape kind of shifts? And how can this maybe play into your open ecosystem approach for AI? Nicholas Cumins: There's a lot of noise in our space, maybe not so much in core infrastructure. We're going to see it in adjacent spaces like AEC or let's say, buildings. There's quite a bit of activities there. They're indicative of where things could go. What's quite clear is that a lot of use cases are more at the edges of what we're doing. When it comes to using AI in, let's say, core engineering and engineering for infrastructure, there's really no better value proposition than this combination of our own engineering applications that are trusted, that are already integrated in workflows across infrastructure value chains around the world, together with third-party AI assistance, AI models, LLMs, right? And that combination is here and now. So this is not a start-up activity. It's not a -- this is where it could go. It's already there. Those capabilities are there. And so when we're engaging with our accounts, this is where the conversation is, which is let's not go into very forward-looking conversations. Let's just talk about what is possible right now, and this is where typically the eyes and opened very, very wide when they realize the capacities, the possibilities, the value that can be created today already. Gregory Bentley: I myself am glad to hear each occasion of engineering organization, infrastructure engineering organizations adopting AI for whatever it is they're adopting it for. And in my ideal, these organizations would take pride in promoting and marketing their proprietary AI approaches to their overall strategy to optimize design and heuristics, you can imagine learning applications and so forth, that would be particular and specific and proprietary. And there have been in the past waves of innovation in engineering and design that where organizations competed on the quality and differentiation of their approaches. In all cases, that can be accelerated if they use existing functionality for the modeling and simulation so that they don't need to take on building up from the ground, what exists already. It's in the -- how the solution space is explored and learned from and what you optimize and so forth, that there is so much to be gained and that should be proprietary and specialized and differentiated and AI can accelerate that for our user organizations. And that's why the open approach that Nicholas described is the right one for us. Eric Boyer: The next question comes from Jay Vleeschhouwer from Griffin Securities. Jay Vleeschhouwer: The third part of the question is you -- for the quarter and for the year-to-date, your increase in sales and marketing was fairly considerable and more than the increase in R&D on a small base spending. What is your expectation for R&D for the remainder of the year and into 2027, particularly when we think about the recent uptrend for example, in your engineering open positions, which have been noticeably higher over the last few months. And then the technical side of that question is for Greg and Nicholas, could you remind us what your R&D and developmental priorities are, including but not limited to your design side of the portfolio, which you've been highlighting as a priority since 2022, but maybe bring us up to date on all that. Nicholas Cumins: Well, maybe I'll start with the latter, Jay, because then it's a good context for the conversation about where exactly we're investing. So the priorities are AI in Bentley Open Applications, AI with Bentley Infrastructure Cloud and then synergies across the full portfolio, including our Seequent portfolio. So across, if you want, Bentley Infrastructure Cloud and Seequent. Those are the priorities from an R&D standpoint. And then within AI engineering applications, then it's both building our own capabilities, which we haven't talked about this call. But also instrumenting applications to interact with third-party AI, which we've discussed at length now, right? So those are the priorities. So when it comes to investments, I will say going forward, we're leaning very hard in adopting AI internally and across all functions. What I think we can expect that in the longer run, we grow certain functions as a percentage of revenue faster than others. And you may have heard some of us talk about growing R&D in particular. And of course, we will do that as a software company. There's so much potential for AI that we want more engineers, and we want them to work much faster, thanks to the AI capacities. But most probably will also be an increase of spend as a percentage of revenue into go-to-market functions because of the point I mentioned earlier, which is there's so much noise around AI that we need to cut through it. And that does require investments in marketing, and it requires investments also with our success force, application engineers, solution architects to be right there as forward deployed engineers with our accounts to make sure they're aware of these capacities, they adopt these capacities, they explore the potential to validate the value. Eric Boyer: Next question comes from Andrew DeGasperi from BMP. Andrew DeGasperi: It's good to see everyone. And I just wanted to ask a question on -- in terms of your fastest-growing segments, Resources, utilities in the grid. And they could be construed as kind of related or indirectly related to data center spend and AI spend. And I'm just wondering, number one, would you agree with that? Number two, are you concerned that they could potentially slow in the future? And then, I guess, lastly, if it does slow, do you think that opens up capacity to work on other projects? Nicholas Cumins: So one point of clarification that the resources is indeed our fastest-growing sector and then public work utilities in totality also grew strongly in Q2. So not just electric grid. It's not like the electric grid was growing necessarily much faster than other parts of the public work utilities sectors such as transportation or water utilities, et cetera. There is definitely a link with the big investments in data centers. This is what's driving for self-sufficiency when it comes to critical minerals. This is also what's putting a lot of stress on the electric grid. So for sure, there is a link with investments in data centers. With respect to durability, I think the need for critical minerals goes way beyond what is needed for data centers. And I think investments on the electric grid also needed way beyond what's also needed for data centers. Yes. I think the of -- the need to secure critical minerals, they need to make the electric grid more resilient to potentially expand it, et cetera, that goes beyond data centers. So we are confident as well about the robustness of those end markets. Eric Boyer: Next question comes from Alexei Gogolev from JPMorgan. Alexei Gogolev: Thank you, Eric, and hello, everyone. Greg, I think in the past, you've talked about how tokens are trivial relative to engineering modeling and simulation compute and that much execution can remain local. So how does that shape your long-term gross margin profile for Agent workflows? And where do you see the main incremental cost centers? Gregory Bentley: Well, I think all the time, there's more awareness that things are going to wind up being hybrid choices. We would like those choices to be able to be made by our accounts and engineering firms and owner operators each have reasons to, as I mentioned, to ultimately favor relatively sovereign computing for their -- for reasons of their own sensitivities. That will be, I think, technically feasible as well with coming hardware advances. And I think my answer is as far as its impact on our gross margins, it's relatively -- is likely to be relatively less impact on our gross margins as a result than perhaps others who are only investing in cloud-based computing requirements, because I don't think the world -- back to the previous question is going to be covered with data centers going forward and that there won't be reasons to balance out the computing form factors in a hybrid way providing AI is a good business, but that can include providing it in local environments as well. Eric Boyer: The next question comes from Taylor McGinnis from UBS. Taylor McGinnis: I'd actually love to hit on cash flow. It looks like in order to hit the high end of the cash flow guide, you have to assume pretty material second half cash flow margin expansion compared to it being down year-over-year in the first half. So could you just walk us through where you're tracking in terms of the guidance range, what would cause the big reversal in the second half of expense growth particularly given some of the AI investments and other areas? Werner Andre: Sure. Maybe I take that. So Taylor, we are in H1 exactly where we messaged in Q4 '25 and our outlook where we would be expected to be so at 47% in H1 of our full year outlook, and we guided towards 45% to 50%, if I take the midpoint of the free cash flow outlook. There were 2 things we pointed out in Q4 last year that will lead to a shift between from Q2 into -- sorry, from H2 into H1, in 2026. One was that we had really strong collections at the end of 2025 which benefited 2025, but which was a higher comparison then for Q1 2026. And then we talked about that we are doing investments into the business early in the year which also impacted the profitability and the cash flow in the first half of the year. So it's really just timing. It's working capital mostly. And it's quarter-to-quarter movements that really catch up quickly between what is the underlying model with our recurring revenues, negative working capital, low CapEx, all of that is still intact. So expect 50% to 55% of cash flow generated in the second half of the year, and we are on point to reach our free cash flow outlook. Gregory Bentley: I just jump in to say that on expenses and margin, you can count on us hitting the goal for the year because it's a fundamental incentive requirement for our executives, and we can manage to it and we do. Anything that happens during the year is just quarterly planning, and it's not hard to achieve the goal because we manage to it. However, in terms of cash flow, we can't -- we've been -- I've been surprised to have invoices be paid before their due date in previous years, and that just take it when it comes. Eric Boyer: And this question comes from Joshua Tilton from Wolfe Research. Arsenije Matovic: This is Arsenije on for Josh. Just wanted to kind of ask if you could discuss maybe whether there's any benefit to including some more ProjectWise functionality, I think that was updated in E365 consumption and whether that's driving any higher consumption or supporting higher ceiling resets. And kind of with 3Q having that lowest level of ceiling resets, you said kind of the same seasonal growth as fiscal '25, Q1 and Q2, but still marginally outperformed that both in Q1 and Q2. So when we're thinking continued momentum on an organic basis, should investors kind of expect a similar slight improvement in organic sequential growth in 3Q on those sets. Nicholas Cumins: All right. Let's -- a number of questions there as well. So hopefully, I won't miss any. First of all, the strong renewals was definitely a growth driver in Q2. It is our second largest quarter for renewals, but it's a distant second. The first one is Q4, but when it came to floor and ceiling uplifts, it was in line with what we've seen in previous quarters. So around 10%, which gives us a lot of confidence because this is always a reflection both of past consumption, but also what our accounts are seeing as the demand in their end markets. So it's a clear vote of confidence for them to agree on these uplift. So that's what we've seen in Q2, and it gives us a lot of confidence for the remainder of the year. Okay. Now on project wise, I would say, Bentley Infrastructure Cloud overall is a growth driver. We introduced Connect at the end of 2025. And it is definitely a growth driver for us. The value proposition resonates a lot with infrastructure organizations. And this helps to support growth with both existing accounts and potentially new accounts as well. Eric Boyer: Great. And the last question comes from Tom Zilberman from BofA. Tomer Zilberman: Can you hear me? Eric Boyer: Yes. Tomer Zilberman: I think you can hear me, but you can see my empty desk in the office. Have been working from home today. So I just hear my voice. I wanted to go back to the line of question on AI competition. But maybe frame it a little bit differently. I think since last quarter, of course, there's been the announcement around Prometheus. And I think also there has been a large European model announced a partnership with aerospace company for engineering simulation and design. Nicholas, I appreciate your earlier comments that these are kind of different areas of focus versus your core competency in infrastructure engineering. But is there any risk that they eventually start converging to your area? And is that driving any sort of hesitancy from customers or kind of a desire to wait to see that these models improve and get better and eventually get to the area of infrastructure engineering. Gregory Bentley: Well, Prometheus is particularly interesting, and it's a bit obscure, which is fine. It's early stage. What I think we can say is such are the level of its ambitions as measured by its investment so far and what's talked about is that software and providing software tools can't turn out to be very much of what it has in mind given the relative size of that market compared to it's scale. However, these are conspicuous investments in the world. And I think it does serve to help increase the enthusiasm on the part of engineers about what AI can do for them and what we can start to do now with their -- to provide them assistance. I believe that what these organizations develop will be useful and they include engineering functionality for their own purposes, but their own purposes are unlikely to be particularly competitive with our place in the market. Nicholas Cumins: And to the other question with respect to our accounts hesitation because they hear things like some of these investments, absolutely not. This is not coming up at all. This is not the noise that I'm talking about. The noise is also their own explorations about what they can do with AI. And what we're cutting -- and the way we're cutting through is just really demonstrating what's possible here and now without speculation, right? What we're offering is possible now and it's offering tremendous value for everyone. Eric Boyer: That concludes our call today. Thanks for your interest and time. We look forward to updating you on our performance in coming quarters. Thank you. Nicholas Cumins: Thank you. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Bentley Systems. The Motley Fool has a disclosure policy. Bentley Systems (BSY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Bentley Systems, Incorporated? Here are five stocks we like better. Q2 revenue rose 12.8% year over year to $411 million, while constant-currency ARR growth accelerated to 12% and net revenue retention held at 109%. Subscription revenue accounted for 92% of sales, and adjusted operating margin reached 28.3%. Demand remained strong across resources, public works, utilities, and electric-grid markets, with mining, infrastructure modernization, transmission capacity, and data-center activity supporting growth. Bentley’s PLS electric-grid business continued expanding internationally despite limited permitting reform. Bentley is expanding AI integrations through model context protocol servers and plans to begin monetizing AI capabilities in 2027, after prioritizing customer adoption in 2026. The company also repurchased $155 million of stock in the first half while reducing net debt by $32 million. Bentley Systems (NASDAQ:BSY) reported second-quarter revenue growth of 12.8% year over year, supported by continued demand for infrastructure engineering software across resources, public works and utilities, and electric-grid markets. Chief Executive Officer Nicholas Cumins said the company’s annual recurring revenue, or ARR, grew 12% year over year on a constant-currency basis, accelerating from the prior quarter. Net revenue retention remained at 109%, while new customer logos contributed 300 basis points to ARR growth, primarily from small and midsize business accounts. → 3 Drone Stocks That Should Soar After the Summer Slump “The world needs more infrastructure and resources, and it needs them faster than they can be delivered,” Cumins said, describing a shortage of engineers as a key industry constraint and a central rationale for Bentley’s artificial-intelligence strategy. Chief Financial Officer Werner Andre said second-quarter revenue totaled $411 million, up 12.8% from a year earlier and 12.2% on a constant-currency basis. Subscription revenue, which represented 92% of quarterly revenue, rose 13.6%, or 13% in constant currency. Last-12-month recurring revenue was $1.486 billion, up 13.5% year over year. ARR ended the quarter at $1.536 billion. GAAP operating income was $89 million in the second quarter and $215 million for the first half. Adjusted operating income less operating stock-based compensation was $116 million, representing a 28.3% margin. Free cash flow was $64 million in the quarter and $252 million in the first half. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Andre said the company remained on track to meet its full-year free-cash-flow outlook of $500 million to $570 million. Last-12-month free cash flow totaled $498 million, up 15% year over year. The company said first-half cash flow reflected strong collections at the end of 2025, which created a more difficult year-over-year comparison, as well as operating investments weighted toward the first half of 2026. Andre said first-half free cash flow represented about 47% of the company’s full-year outlook, within its guided range of 45% to 50%. → Jersey Mike's Serves Fresh Gains After IPO Stumble Bentley also said foreign exchange was a headwind. The stronger U.S. dollar reduced first-half revenue by about $5 million compared with the exchange rates assumed in its annual outlook. If end-of-July rates continue through the remainder of the year, second-half revenue could face an additional $8 million to $10 million impact, Andre said. Cumins said the resources segment was Bentley’s fastest-growing sector, driven particularly by mining activity across regions. He attributed demand to countries’ focus on self-sufficiency in critical minerals amid geopolitical tensions and supply-chain disruptions, as well as growing demand tied to electrification. Mining investment has been concentrated primarily in brownfield projects rather than greenfield developments, Cumins said during the question-and-answer session, as operators seek faster returns and lower-risk ways to expand production. Public works and utilities also posted strong growth, helped by worldwide infrastructure spending. Bentley’s Power Line Systems, or PLS, business remained a principal growth driver in electric-grid software, benefiting from demand for transmission capacity, grid resiliency and modernization. Cumins said PLS revenue outside the U.S. has grown to equal the size of the entire PLS business when Bentley acquired it in 2022. While permitting reform could provide an additional tailwind for the business, he said PLS has continued growing without it because utilities are investing in existing systems to meet rising power demand and improve resilience against severe weather. The Americas delivered strong results, with U.S. customer backlogs supported by transportation, water, power and data-center-related activity, according to Cumins. Latin America benefited from mining and transportation demand, while Australia and India led growth in Asia-Pacific. China represented about 2% of ARR and continued to face economic and geopolitical headwinds, he said. Bentley is positioning AI as a tool to increase engineering productivity rather than replace established software workflows. Cumins said Bentley’s engineering applications provide deterministic modeling, analysis and simulation capabilities, while AI models contribute natural-language interaction, reasoning and task planning. The company has expanded its model context protocol, or MCP, server releases. After releasing its first MCP server for STAAD in the prior quarter, Bentley released five more across Bentley Open applications. It also announced three MCP servers for PLS products, including PLS-GRID. Through MCP servers, Bentley said users can connect AI assistants to engineering applications and engineering data. Cumins said customers may use Bentley Copilot or third-party systems including Anthropic Claude, Google Gemini and OpenAI ChatGPT. “Our aim is to be the trusted engineering layer beneath all of them,” Cumins said. The company said it is prioritizing adoption, customer exploration and validation of the AI workflow before monetization. Cumins said Bentley does not plan to monetize these AI capabilities in 2026 and expects to begin monetization next year. He said the company expects a usage model based on application and infrastructure-cloud consumption, rather than relying solely on traditional user-based subscription metrics. Bentley said it is also investing in asset analytics, which it believes can help infrastructure owners use digital twins in operations and maintenance. The company reported that 153 major infrastructure owner accounts outside China have adopted Bentley Infrastructure Cloud, with most using ProjectWise. Andre said Bentley reduced net debt by $32 million during the first half and deployed $155 million on share repurchases, in addition to $42 million in dividends. The company’s net debt leverage stood at 1.9 times adjusted EBITDA at quarter-end, while available capacity under its credit facility totaled $1.2 billion. During the quarter, Bentley closed a new $550 million term loan A under its credit facility’s accordion feature and used the proceeds to repay revolving-credit borrowings, which Andre said lowered interest costs. The company repurchased 3.1 million shares in the second quarter. Management said its fully diluted share count was 319 million at the end of the quarter, down about 3% following the redemption of convertible debt maturing in 2026. Bentley expects the remaining convertible debt maturity in 2027 could similarly reduce diluted shares. Bentley Systems, Inc is a global software provider specializing in infrastructure engineering applications for the design, construction, and operations of roads, bridges, rail and transit systems, water and wastewater networks, power plants and grids, industrial facilities, and communications infrastructure. Founded in 1984 by brothers Keith and Barry Bentley, the company is headquartered in Exton, Pennsylvania, and maintains offices and development centers across North America, Europe, Asia, and Australia. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Bentley Systems Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

For the quarter ended June 2026, Bentley Systems, Incorporated (BSY) reported revenue of $410.73 million, up 12.8% over the same period last year. EPS came in at $0.35, compared to $0.32 in the year-ago quarter. The reported revenue represents a surprise of -0.5% over the Zacks Consensus Estimate of $412.8 million. With the consensus EPS estimate being $0.32, the EPS surprise was +9.38%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Bentley Systems performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Total Revenue - YoY growth: 12.8% versus 13.4% estimated by five analysts on average. Annualized Recurring Revenues (ARR): $1.54 billion versus the three-analyst average estimate of $1.55 billion. Revenue - Subscriptions - YoY growth: 14.1% compared to the 13.9% average estimate based on three analysts. Revenues- Subscriptions and licenses: $388.34 million compared to the $389.65 million average estimate based on four analysts. The reported number represents a change of +13% year over year. Revenues- Services: $22.39 million versus $24.08 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +9.4% change. Revenues- Subscriptions: $378.64 million versus the three-analyst average estimate of $379.07 million. The reported number represents a year-over-year change of +13.6%. Revenues- Perpetual licenses: $9.71 million versus $10.63 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -4.8% change. View all Key Company Metrics for Bentley Systems here>>> Shares of Bentley Systems have returned +13.9% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bentley Systems, Incorporated (BSY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Infrastructure engineering software company Bentley Systems (NASDAQ:BSY) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 12.8% year on year to $410.7 million. Its non-GAAP profit of $0.35 per share was 9.8% above analysts’ consensus estimates. Is now the time to buy Bentley Systems? Find out in our full research report. Revenue: $410.7 million vs analyst estimates of $411.6 million (12.8% year-on-year growth, in line) Adjusted EPS: $0.35 vs analyst estimates of $0.32 (9.8% beat) Adjusted EBITDA: $143.4 million vs analyst estimates of $141.5 million (34.9% margin, 1.3% beat) Operating Margin: 21.6%, down from 23.2% in the same quarter last year Free Cash Flow Margin: 15.5%, down from 44.3% in the previous quarter Net Revenue Retention Rate: 109%, in line with the previous quarter Annual Recurring Revenue: $1.54 billion vs analyst estimates of $1.53 billion (11.4% year-on-year growth, in line) Billings: $407.9 million at quarter end, up 10.8% year on year Market Capitalization: $11.28 billion Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ:BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities. Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Bentley Systems grew its sales at a 13% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the software sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded. Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Bentley Systems’s recent performance shows its demand has slowed as its annualized revenue growth of 11.6% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. This quarter, Bentley Systems’s year-on-year revenue growth was 12.8%, and its $410.7 million of revenue was in line with Wall Street’s estimates. Looking ahead, sell-side analysts expect revenue to grow 11.5% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and suggests its newer products and services will not catalyze better top-line performance yet. ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice. While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable. Bentley Systems’s ARR came in at $1.54 billion in Q2, and over the last four quarters, its growth was underwhelming as it averaged 12.3% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in securing longer-term commitments. One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time. Bentley Systems’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 109% in Q2. This means Bentley Systems would’ve grown its revenue by 9% even if it didn’t win any new customers over the last 12 months. Bentley Systems has a decent net retention rate, showing us that its customers not only tend to stick around but also get increasing value from its software over time. It was encouraging to see Bentley Systems beat analysts’ adjusted operating income expectations this quarter. On the other hand, its billings slightly missed and its revenue was in line with Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 3.6% to $34.74 immediately following the results. Big picture, is Bentley Systems a buy here and now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.

Bentley Systems, Incorporated (BSY) came out with quarterly earnings of $0.35 per share, beating the Zacks Consensus Estimate of $0.32 per share. This compares to earnings of $0.32 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +9.38%. A quarter ago, it was expected that this company would post earnings of $0.38 per share when it actually produced earnings of $0.38, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Bentley Systems, which belongs to the Zacks Internet - Software industry, posted revenues of $410.73 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.5%. This compares to year-ago revenues of $364.11 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Bentley Systems shares have lost about 5.6% since the beginning of the year versus the S&P 500's gain of 12.8%. While Bentley Systems has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Bentley Systems was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.34 on $422.48 million in revenues for the coming quarter and $1.40 on $1.7 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Constellation Software Inc. (CNSWF), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly earnings of $24.60 per share in its upcoming report, which represents a year-over-year change of +1.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Constellation Software Inc.'s revenues are expected to be $3.3 billion, up 16% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bentley Systems, Incorporated (BSY) : Free Stock Analysis Report Constellation Software Inc. (CNSWF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

EXTON, Pa., August 06, 2026--(BUSINESS WIRE)--Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced results for the quarter ended June 30, 2026. Second Quarter 2026 Results Total revenues were $410.7 million, up 12.8% or 12.2% on a constant currency basis, year-over-year; Subscriptions revenues were $378.6 million, up 13.6% or 13.0% on a constant currency basis, year-over-year; Annualized Recurring Revenues ("ARR") were $1,536.0 million as of June 30, 2026, compared to $1,379.2 million as of June 30, 2025. Constant currency ARR growth rate was 12%; Last twelve-month recurring revenues dollar-based net retention rate was 109%, consistent with the same period last year; Operating income margin was 21.6%, compared to 23.2% for the same period last year; Adjusted operating income less operating stock-based compensation expense ("AOI less Operating SBC") margin was 28.3%, compared to 29.3% for the same period last year; Net income per diluted share was $0.25, compared to $0.22 for the same period last year; Adjusted net income per diluted share ("Adjusted EPS") was $0.35, compared to $0.32 for the same period last year; Cash flows from operating activities were $71.5 million, compared to $61.1 million for the same period last year; and Free cash flow was $63.8 million, compared to $57.0 million for the same period last year. Six Months Ended June 30, 2026 Results Total revenues were $834.9 million, up 13.6% or 12.1% on a constant currency basis, year-over-year; Subscriptions revenues were $771.1 million, up 14.1% or 12.6% on a constant currency basis, year-over-year; Operating income margin was 25.7%, compared to 27.2% for the same period last year; AOI less Operating SBC margin was 30.8%, compared to 32.0% for the same period last year; Net income per diluted share was $0.55, compared to $0.50 for the same period last year; Adjusted EPS was $0.73, compared to $0.67 for the same period last year; Cash flows from operating activities were $264.9 million, compared to $280.5 million for the same period last year; and Free cash flow was $251.7 million, compared to $273.4 million for the same period last year. Executive Chair Greg Bentley said, "BSY’s hallmark growth dependability, positively exemplified by the quarters of 2026, underscores the boundless prioritization of investment within the world’s owner-operators of physical infrastructure— and our company’s ingrained zeal for hybrid innovation, led foreseeably by successive multi-faceted integration of AI. These factors underlie my confidence in the durability of superior financial returns for holders of BSY shares, characterized by our sustained momentum in growth of ARR, profitability, and most fundamentally, free cash flow (appropriately burdened by operating stock-based compensation)." CEO Nicholas Cumins said, "We had another strong quarter, reflecting disciplined execution by our team and continued strength in the end markets we serve. Growth was led once again by the Resources sector, followed by Public Works / Utilities, including from the electric grid. "We are also making meaningful progress with Infrastructure AI. We are instrumenting more of our engineering applications so that users can combine our trusted, deterministic engines for modeling, analysis, and simulation with the reasoning capabilities of their preferred AI assistants. The feedback from accounts has been encouraging: as they better understand what becomes possible, they are beginning to apply these capabilities on live projects, creating value that we intend to monetize in due course." CFO Werner Andre said, "Our second-quarter results reflect consistent high performance across our key financial metrics, positioning us favorably within our full-year financial outlook. We delivered constant-currency ARR growth of 12% and constant-currency subscriptions revenue growth of 13%, with free cash flow having grown 15% on a last-twelve-months basis and profitability in line with our expectations. During the second quarter, we went live with our new enterprise-wide finance and quote-to-cash platforms, the costs of which we absorbed within our margin commitment while laying the foundation for future efficiency and scale. "Our disciplined approach to capital allocation is evidenced by quarter-end net debt leverage of 1.9 times and ample credit capacity, notwithstanding a meaningful increase in share repurchases during the first half. Together with our reliable cash generation, and in anticipation of our mid-2027 convertible notes maturity, we maintain the flexibility to fund programmatic acquisitions and to return capital to shareholders through dividends and share repurchases." Call Details Bentley Systems will host a live Zoom video webinar on August 6, 2026 at 8:15 a.m. Eastern time to discuss results for its second quarter ended June 30, 2026. Those wishing to participate should access the live Zoom video webinar of the event through a direct registration link at https://bentley-com.zoom.us/webinar/register/WN_lTFMd_YZRQeRdNKzyJQQvw#/registration. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at https://investors.bentley.com. In addition, a replay and transcript will be available after the conclusion of the live event on Bentley Systems’ Investor Relations website for one year. Non-GAAP Financial Measures In this press release, we sometimes refer to financial measures that are not presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Certain of these measures are considered non‑GAAP financial measures under the United States Securities and Exchange Commission ("SEC") regulations. Those rules require the supplemental explanations and reconciliations that are in Bentley Systems’ Form 8‑K (Quarterly Earnings Release) furnished to the SEC. We use AOI less Operating SBC as our primary performance measure because we believe it better reflects our core operating results by excluding items that are not indicative of the ordinary operation of our business, including costs arising directly from our acquisition activity and the costs of discrete realignment initiatives. Consistent with that objective, we refined the measure during 2026: beginning in the first quarter of 2026, we expanded our acquisition expenses adjustment to include cash- and equity‑settled retention incentives provided to key employees of acquired companies, and renamed the measure from Adjusted operating income less stock-based compensation expense ("AOI less SBC") to "AOI less Operating SBC"; and beginning in the second quarter of 2026, applying the same principle, we began adjusting for integration costs incurred to integrate acquired businesses into our operations. We continue to adjust for discrete realignment initiatives, and we do not adjust for severance or organizational and workforce changes undertaken in the ordinary course of managing our business, which remain reflected in AOI less Operating SBC. Prior period amounts have been revised to conform to the current definition; no integration costs were incurred in periods prior to the second quarter of 2026. Forward-Looking Statements This press release includes forward-looking statements regarding the future results of operations and financial condition, business strategy, and plans and objectives for future operations of Bentley Systems, Incorporated (the "Company," "we," "us," and words of similar import). All such statements contained in this press release, other than statements of historical facts, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations, projections, and assumptions about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, and there are a significant number of factors that could cause actual results to differ materially from statements made in this press release including: adverse changes in global economic and/or political conditions; the impact of tariffs and related policies on our business and the businesses of the industries we serve; the impact of current and future sanctions, embargoes and other similar laws at the state and/or federal level that impose restrictions on our counterparties or upon our ability to operate our business within the subject jurisdictions; political, economic, regulatory and public health and safety risks and uncertainties in the countries and regions in which we operate; failure to retain personnel necessary for the operation of our business or those that we acquire; failure to effectively manage succession; changes in the industries in which our accounts operate; the competitive environment in which we operate; the quality of our products; our ability to develop and market new products to address our accounts’ rapidly changing technological needs; changes in capital markets and our ability to access financing on terms satisfactory to us or at all; the impact of changing or uncertain interest rates on us and on the industries we serve; our ability to integrate acquired businesses successfully; and our ability to identify and consummate future investments and/or acquisitions on terms satisfactory to us or at all. Further information on potential factors that could affect the financial results of the Company are included in the Company’s Form 10‑K and subsequent Form 10‑Qs, which are on file with the SEC. The Company disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. About Bentley Systems Around the world, infrastructure professionals rely on software from Bentley Systems to help them design, build, and operate better and more resilient infrastructure for transportation, water, energy, cities, and more. Founded in 1984 by engineers for engineers, Bentley is the partner of choice for engineering firms and owner-operators worldwide, with software that spans engineering disciplines, industry sectors, and all phases of the infrastructure lifecycle. Through our digital twin solutions, we help infrastructure professionals unlock the value of their data to transform project delivery and asset performance. © 2026 Bentley Systems, Incorporated. Bentley and the Bentley logo are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners. Explanation of Non-GAAP and Other Financial Measures Constant currency Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated effects of foreign currency exchange rate fluctuations. A significant amount of our operations is conducted in foreign currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance. In reporting period‑over‑period results, except for ARR as discussed further below, we calculate the effects of foreign currency fluctuations and constant currency information by translating current and prior period results on a transactional basis to our reporting currency using prior period average foreign currency exchange rates in which the transactions occurred. Recurring revenues Recurring revenues are the basis for our other revenue-related key business metrics. We believe this measure is useful in evaluating our ability to consistently retain and grow our revenues from accounts with revenues in the prior period ("existing accounts"). Recurring revenues are subscriptions revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and professional services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions. Annualized recurring revenues ("ARR") ARR is a key business metric that we believe is useful in evaluating the scale and growth of our business as well as to assist in the evaluation of underlying trends in our business. Furthermore, we believe ARR, considered in connection with our last twelve‑month recurring revenues dollar‑based net retention rate, is a leading indicator of revenue growth. ARR is defined as the sum of the annualized value of our portfolio of contracts that produce recurring revenues as of the last day of the reporting period, and the annualized value of the last three months of recognized revenues for our contractually recurring consumption‑based software subscriptions with consumption measurement durations of less than one year, calculated using the spot foreign currency exchange rates. We believe that the last three months of recognized revenues, on an annualized basis, for our recurring software subscriptions with consumption measurement period durations of less than one year is a reasonable estimate of the annual revenues, given our consistently high retention rate and stability of usage under such subscriptions. Constant currency ARR growth rate is the growth rate of ARR measured on a constant currency basis. In reporting period‑over‑period ARR growth rates in constant currency, we calculate constant currency growth rates by translating current and prior period ARR on a transactional basis to our reporting currency using current year budget exchange rates. Constant currency ARR growth rate from business performance excludes the ARR onboarding of our platform acquisitions and includes the impact from the ARR onboarding of programmatic acquisitions, which generally are immaterial, individually and in the aggregate. We believe these ARR growth rates are important metrics indicating the scale and growth of our business. Last twelve‑month recurring revenues dollar‑based net retention rate Last twelve‑month recurring revenues dollar‑based net retention rate is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues. Last twelve‑month recurring revenues dollar‑based net retention rate is calculated, using the average exchange rates for the prior period, as follows: the recurring revenues for the current period, including any growth or reductions from existing accounts, but excluding recurring revenues from any new accounts added during the current period, divided by the total recurring revenues from all accounts during the prior period. A period is defined as any trailing twelve months. Related to our platform acquisitions, recurring revenues into new accounts will be captured as existing accounts starting with the second anniversary of the acquisition when such data conforms to the calculation methodology. This may cause variability in the comparison. Adjusted operating income less operating stock-based compensation expense ("AOI less Operating SBC") AOI less Operating SBC is a non-GAAP financial measure and is used to measure the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business. AOI less Operating SBC is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash- and equity-settled retention incentives provided to key employees of acquired companies), integration costs, and realignment expenses (income), for the respective periods. AOI less Operating SBC is our primary performance measure, which excludes certain expenses and charges, including cash- and equity-settled retention incentives provided to key employees of acquired companies, as we believe these may not be indicative of the Company’s core business operating results. We intentionally include operating stock-based compensation expense (non‑cash stock‑based compensation expense less equity‑settled retention incentives provided to key employees of acquired companies) in this measure as we believe it better captures the economic costs of our business. Management uses this non-GAAP financial measure to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and in our comparison of our financial results to those of other companies. It is also a significant performance measure in certain of our executive incentive compensation programs. AOI less Operating SBC margin is calculated by dividing AOI less Operating SBC by total revenues. Adjusted operating income ("AOI") Adjusted operating income is a non-GAAP financial measure that we believe is useful to investors in making comparisons to other companies, although this measure may not be directly comparable to similar measures used by other companies. Adjusted operating income is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash- and equity-settled retention incentives provided to key employees of acquired companies), integration costs, realignment expenses (income), and operating stock‑based compensation expense (non‑cash stock‑based compensation expense less equity‑settled retention incentives provided to key employees of acquired companies), for the respective periods. Adjusted net income and Adjusted EPS Adjusted net income and Adjusted EPS are non-GAAP financial measures presenting the earnings generated by our ongoing operations that we believe is useful to investors in making meaningful comparisons to other companies, although these measures may not be directly comparable to similar measures used by other companies, and period-over-period comparisons. Adjusted net income is defined as net income attributable to Bentley Systems adjusted for the following: amortization of purchased intangibles, operating stock‑based compensation expense (non‑cash stock‑based compensation expense less equity‑settled retention incentives provided to key employees of acquired companies), expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash- and equity-settled retention incentives provided to key employees of acquired companies), integration costs, realignment expenses (income), other non‑operating (income) expense, net, the tax effect of the above adjustments to net income, and equity in net (income) losses of investees, net of tax, for the respective periods. The income tax effect of non‑GAAP adjustments was determined using the applicable rates in the taxing jurisdictions in which income or expense occurred, and represent both current and deferred income tax expense or benefit based on the nature of the non‑GAAP adjustments, including the tax effects of non‑cash operating stock‑based compensation expense. Adjusted EPS is calculated as Adjusted net income, less net income attributable to Bentley Systems allocated to participating securities, plus interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method, if applicable, (numerator) divided by Adjusted diluted weighted average shares (denominator). Adjusted diluted weighted average shares is calculated by adding incremental shares related to the dilutive effect of convertible senior notes using the if‑converted method, if applicable, to diluted weighted average shares. Free cash flow Free cash flow is a non-GAAP financial measure and our primary liquidity measure that we believe provides a meaningful measure of liquidity and a useful basis for assessing our ability to service our debt obligations, make strategic acquisitions and investments, and return capital to investors through dividends and stock repurchases. Additionally, we believe free cash flow is useful to investors as a basis for comparing our results with other companies in our industries, although our measure of free cash flow may not be directly comparable to similar measures used by other companies. Free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other non-discretionary payments, such as mandatory debt repayments, are not deducted from the measure. Free cash flow is defined as cash flows from operating activities less purchases of property and equipment and investment in capitalized software. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we believe provides a meaningful measure of liquidity and a useful basis for assessing our ability to repay debt, make strategic acquisitions and investments, and return capital to investors. Adjusted EBITDA is defined as cash flows from operating activities adjusted for the following: cash interest, cash taxes, cash deferred compensation plan distributions, cash acquisition expenses, cash integration costs, cash realignment costs, changes in operating assets and liabilities, and other cash items (such as those related to our interest rate swap). From time to time, we may exclude from Adjusted EBITDA the impact of certain cash receipts or payments that affect period-to-period comparability. View source version on businesswire.com: https://www.businesswire.com/news/home/20260806341259/en/ Contacts For more information, contact: Investors: Eric Boyer, [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a 'boundless regeneration of demand' within infrastructure engineering, particularly in sectors prioritizing resilience, capacity, and self-sufficiency. Management attributes growth to the persistent engineering resource bottleneck, positioning Bentley's AI-enabled tools as the primary solution to increase throughput and quality. The 'hybrid AI' strategy focuses on combining deterministic engineering applications with probabilistic AI models, allowing for precision work guided by natural language reasoning. Strategic positioning is reinforced by high penetration in the 'Infrastructure 500,' where BSY accounts manage well over 80% of all ex-China top owner infrastructure assets, and 90% when excluding the commercial/facilities sector. The Resources sector led growth, fueled by global mining demand for critical minerals essential for electrification and AI data center power requirements. Operational success in the Public Works and Utilities sector was bolstered by Power Line Systems (PLS), which addresses urgent global needs for grid transmission and resiliency. Management emphasized a 'trusted digital quartermaster' role, ensuring long-term account stability by integrating disruptive technologies without requiring users to restart legacy workflows. The company expects to sustain double-digit growth, with the potential to reach the high end of guidance if momentum in Resources continues alongside successful M&A and Asset Analytics deals. A phased AI commercialization strategy is underway, prioritizing adoption, exploration, and validation in 2026, with formal monetization expected to begin in 2027. Future revenue models will likely supplement traditional 'attended consumption' with agentic API-based monetization to capture value from applications running at 'machine speed.' Management anticipates that infrastructure software expenditures as a proportion of asset value will increase by 'orders of magnitude' as AI integration improves project economics. Guidance remains positioned to deliver on the company's annual constant currency margin improvement commitment, supported by greater efficiency and scale following the launch of new enterprise-wide finance and Quote-to-Cash platforms. Bentley achieved a 'negative 1%' CAGR in fully diluted share count since 2020 through disciplined stock repurchases that offset stock-based compensation (SBC) dilution. The company successfully reduced debt leverage to a target range of approximately 2x, enabling more aggressive discretionary share repurchases during Q2 2026. A new $550 million Term Loan A was secured to optimize interest costs and provide liquidity for the upcoming 2027 convertible note maturity. Geopolitical headwinds in China remain a factor, though the region represents only about 2% of total ARR, limiting overall corporate exposure. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Reaching the top end of the 12% range requires continued momentum in the mining sector and the closing of 'lumpy' Asset Analytics deals. Management noted that a strategic acquisition would likely be necessary to exceed current organic growth trajectories. Direct monetization of AI features is not planned for 2026; the focus remains on earning user trust and validating value first. Bentley intends to monetize at the 'underlying engineering layer' rather than charging for specific AI assistants, ensuring an open ecosystem for third-party models like Claude or ChatGPT. PLS is currently growing strongly without reform due to maintenance of existing aging grids and data center demand. Management views potential legislative reform as a significant future tailwind that would further accelerate the already high-performing electric grid business. Management expects a 'hybrid' compute model where much of the engineering simulation remains local or at the edge, mitigating the margin pressure typically associated with pure cloud AI. The cost of AI 'tokens' is described as trivial compared to the high-value engineering logic Bentley provides.

Wall Street analysts expect Bentley Systems, Incorporated (BSY) to post quarterly earnings of $0.32 per share in its upcoming report, which indicates no change from the year-ago quarter. Revenues are expected to be $412.8 million, up 13.4% from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe. Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock. While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight. With that in mind, let's delve into the average projections of some Bentley Systems metrics that are commonly tracked and projected by analysts on Wall Street. Analysts predict that the 'Revenues- Subscriptions and licenses' will reach $389.65 million. The estimate indicates a change of +13.4% from the prior-year quarter. It is projected by analysts that the 'Revenues- Services' will reach $24.08 million. The estimate indicates a year-over-year change of +17.7%. The consensus among analysts is that 'Revenues- Subscriptions' will reach $379.07 million. The estimate suggests a change of +13.7% year over year. Analysts' assessment points toward 'Revenues- Perpetual licenses' reaching $10.63 million. The estimate suggests a change of +4.3% year over year. Analysts expect 'Total Revenue - YoY growth' to come in at 13.4%. The estimate compares to the year-ago value of 10.2%. The average prediction of analysts places 'Annualized Recurring Revenues (ARR)' at $1.55 billion. Compared to the current estimate, the company reported $1.38 billion in the same quarter of the previous year. Analysts forecast 'Revenue - Subscriptions - YoY growth' to reach 13.9%. The estimate is in contrast to the year-ago figure of 12.1%. View all Key Company Metrics for Bentley Systems here>>> Bentley Systems shares have witnessed a change of +11.2% in the past month, in contrast to the Zacks S&P 500 composite's +3.5% move. With a Zacks Rank #3 (Hold), BSY is expected closely follow the overall market performance in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> . Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bentley Systems, Incorporated (BSY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Let’s dig into the relative performance of Bentley Systems (NASDAQ:BSY) and its peers as we unravel the now-completed Q1 vertical software earnings season. Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, some have very specific needs. As a result, vertical software, which addresses industry-specific workflows, is growing and fueled by the pressures to improve productivity, whether it be for a life sciences, education, or banking company. The 4 vertical software stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3.7% while next quarter’s revenue guidance was 0.9% above. In light of this news, share prices of the companies have held steady as they are up 3.2% on average since the latest earnings results. Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ:BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities. Bentley Systems reported revenues of $424.2 million, up 14.5% year on year. This print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ billings estimates. CEO Nicholas Cumins said, “We are pleased to report a strong start to 2026, reflecting both solid market fundamentals and strong execution by our team. The quarter was highlighted by the performance of our Resources business, which continues to be our fastest-growing sector, and by the steady demand from Public Works / Utilities. This gives us a solid foundation for the year. Bentley Systems delivered the weakest performance against analyst estimates of the whole group. The market seems disappointed with the results as the stock is down 1.3% since reporting and currently trades at $31.65. Read our full report on Bentley Systems here, it’s free. Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ:ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices. Alarm.com reported revenues of $265.2 million, up 11% year on year, outperforming analysts’ expectations by 5.6%. The business had a very strong quarter with a solid beat of analysts’ billings and EBITDA estimates. Alarm.com delivered the biggest analyst estimate beat among its peers. The market seems happy with the results as the stock is up 10% since reporting. It currently trades at $51.69. Is now the time to buy Alarm.com? Access our full analysis of the earnings results here, it’s free. With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE:GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics. Guidewire Software reported revenues of $372.5 million, up 26.9% year on year, exceeding analysts’ expectations by 4.7%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ billings estimates and full-year revenue guidance slightly topping analysts’ expectations. As expected, the stock is down 11.4% since the results and currently trades at $134.00. Read our full analysis of Guidewire Software’s results here. Built on a "versionless" cloud architecture that delivers quarterly updates to all customers, Manhattan Associates (NASDAQ:MANH) develops cloud-based software that helps retailers, wholesalers, and manufacturers manage their supply chains, inventory, and omnichannel operations. Manhattan Associates reported revenues of $282.2 million, up 7.4% year on year. This number topped analysts’ expectations by 3.3%. Overall, it was a strong quarter as it also recorded full-year EPS and revenue guidance slightly topping analysts’ expectations. Manhattan Associates had the slowest revenue growth among its peers. The stock is up 15.6% since reporting and currently trades at $155.91. Read our full, actionable report on Manhattan Associates here, it’s free. Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure? These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.