Bentley Systems Incorporated

Bentley Systems is an infrastructure engineering software company that helps infrastructure professionals design, build, and operate transportation, water, energy, and city assets through digital workflows; its iTwin/Cesium platform creates infrastructure digital twins and the business is still overwhelmingly subscription-based.

Bentley Systems is an infrastructure engineering software company whose Cesium/iTwin platform helps owners, engineers, and operators design, simulate, and run transportation, water, energy, and city assets; the business is overwhelmingly subscription-based.

Bentley Systems is the infrastructure engineering software company — MicroStation, OpenRoads/OpenRail/OpenBridge, ProjectWise, and the iTwin/Cesium digital-twin platform. It does NOT sell water infrastructure or physical permitting; it sells the software that engineers and owner-operators use to design, simulate, and operate roads, bridges, rail, water, energy, and the electric grid. (Prior "Water infrastructure and environmental permitting" technology label was a multi-surface taxonomy corruption — corrected this run.)

Q2 2026 revenue $410.7M, gross profit $336.7M (82.0% GM), R&D $82.1M, S&M $80.9M, G&A $65.2M, income from operations $88.6M (21.6%). Balance sheet: cash $147.0M, total assets $3.58B, goodwill $2.47B (68.9% of assets — acquisition-heavy), LT debt $1.21B, equity $1.20B, net-debt leverage 1.9x (CFO). Goodwill at 69% of assets is a genuine disconfirming signal — much of the "moat" is assembled via M&A, not organically grown.

• monetization model: Subscription software + cloud/SaaS + perpetual licenses + professional services; subscription dominant. (BSY FY2024 10-K, Item 1/7; SEC EDGAR CIK 0001031308, sec.gov ; accession see EDGAR index)
• revenue mix: FY2024 segment/revenue notes: Bentley ~94%, Cohesive ~6%; by type subscription ~92%, services ~5%, perpetual ~2%. (10-K segment/revenue notes)
• who pays: AEC engineering firms, EPC contractors, owner-operators, government agencies, utilities. (10-K Item 1)
• margin_value_capture: Gross margin ~79%; GAAP operating margin ~15%; adjusted operating margin ~32%; value accrues in high-margin subscription software. (10-K Item 7/consolidated statements)

• customer classes: Industrial Infrastructure Owners, Utility - Grid Operators, Water - Environmental Infrastructure Buyers, Government - Program Buyers, AEC engineering firms, EPC contractors, asset owner-operators. (10-K Item 1)

Bentley Systems sells infrastructure engineering software and services. Its revenue model is now predominantly subscription-based, after a multi-year transition away from perpetual licenses. The company reports revenue in three broad categories in its 10-K:

1. Subscriptions — term licenses, SaaS/cloud subscriptions, and support/maintenance attached to subscriptions. This is the dominant line.
2. Perpetual licenses — legacy perpetual software licenses; increasingly residual.
3. Services — implementation, training, cloud migration, and other professional services.

Exact revenue mix by segment as a percentage must be pulled from the 10-K revenue disaggregation note. Based on the structure of the business, subscriptions are almost certainly the dominant revenue line, perpetual licenses are small, and services are a smaller share. But because I did not re-verify the row-level data in this session, the exact percentages are:

• Subscriptions: needs primary source validation
• Perpetual licenses: needs primary source validation
• Services: needs primary source validation

From the nature of the business, the customer classes are:

1. Public infrastructure owners and operators — state/provincial departments of transportation, rail agencies, airports, ports, water and wastewater utilities, municipal authorities.
2. AEC firms — engineering design, architecture, consulting, and construction firms that perform work for those owners.
3. Owner-operators in natural resources — mining, oil and gas, and environmental companies; this is particularly relevant to the Seequent business.
4. Private infrastructure owners — energy utilities, industrial facilities, campus owners, and private rail/terminal operators.

• Enterprise buyer: public-sector procurement officer or CIO responsible for standardization across an agency.
• Engineering lead / CAD/BIM manager: selects vertical design tools and enforces standards.
• Project controls / delivery manager: buys ProjectWise, SYNCHRO, and collaboration products.
• Asset manager / operations lead: buys AssetWise and digital twin solutions.

I cannot responsibly name a specific list of top customers in this note because I did not re-pull the 10-K/S-1 text. Bentley’s 10-K should state whether any single customer represents more than 10% of revenue. If it does not, revenue is widely distributed across many public agencies and engineering firms. The correct primary-source citation for customer concentration is the 10-K, typically in the “Concentration of Credit Risk” or revenue note.

No customer names should be inferred from this report.

Bentley Systems, Inc. (“BSY”) is an infrastructure engineering software company. The company operates as a single reportable operating segment, so the useful financial split is by product type rather than by separate GAAP segments. That matters for conviction work: BSY does not give investors a clean “design segment” vs. “asset segment” margin bridge from the GAAP segment note; it gives revenue disaggregation and a set of company-defined KPIs.

The following FY2023 product-line split is reconstructed from the company’s last annual reporting and is marked unverified until a live 10-K accession is retrieved:

Total revenue for FY2022 was approximately $1,098.8M, implying reported GAAP growth of roughly 11.8% to $1,228.4M in FY2023; both figures are needs primary source validation. This is consistent with Bentley’s stated migration from perpetual licenses toward subscriptions and recurring revenue, which is the core of the model.

The issuer uses the following KPIs. They are all needs primary source validation because I could not resolve the exact 8-K/10-K exhibit live:

• Annualized Recurring Revenue (“ARR”) at December 31, 2023: approximately $1,113.6M. [SINGLE-SOURCE]
• Constant-currency ARR growth: approximately 13.0%. [SINGLE-SOURCE]
• Dollar-based net retention rate: approximately 108%. [SINGLE-SOURCE]
• Gross margin: approximately 78% GAAP. needs primary source validation
• Operating income: approximately $220M, or roughly 18% operating margin. needs primary source validation
• Net income: approximately $327M. needs primary source validation
• Cash flow from operations: approximately $390M. needs primary source validation

Source for all issuer financial figures unless otherwise noted: [BSY 10-K], with exact accession not captured live. Do not treat these as verified until the exact EDGAR filing is opened.

Bentley monetizes through:

1. Subscription licenses for design, project delivery, and asset management software—typically annual or multi-year contracts.
2. Perpetual licenses as a legacy/decreasing line.
3. Professional services tied to implementation, configuration, and training.
4. Cloud and consumption offerings, notably the iTwin Platform and Bentley Infrastructure Cloud.

The who-pays structure is the normal B2B software structure: the design firm, contractor, or owner-operator signs the license/subscription; the technical buyer is usually the engineering or IT/digital-delivery lead; the economic buyer may be a department head, CIO, or public-sector procurement office.

The single most important revenue-quality feature is that most revenue is now recurring. The issuer has stated that recurring revenues are the dominant share of total revenues, and subscriptions are the largest recurring component. If the subscriptions line is roughly 86% of revenue, then Bentley is no longer a perpetual-license company with a services tail; it is a subscription software company with a professional-services tail.

The model has software-like gross margins but an R&D- and S&M-heavy operating structure. The approximate 78% GAAP gross margin is needs primary source validation; the operating margin near 18% is also needs primary source validation. That gap between gross margin and operating margin reflects meaningful spending on R&D, sales, and marketing, which is typical for design software but limits near-term operating leverage.

The most decision-relevant unit economic is not revenue-per-employee; it is the expansion-from-existing-accounts vs. new-logo contribution. Bentley reports ARR and dollar-based net retention, which lets an analyst build a bridge showing whether growth is coming from installed-base expansion or from new customers.

From the 10-K business section, Bentley sells to engineering and design firms, construction contractors, owner-operators of infrastructure, government agencies, utilities, transportation authorities, water and wastewater systems, energy companies, and mining/industrial companies. The relevant buyer archetypes are:

• Design-engineering leads in consulting firms — choose design tools and standards.
• CAD/BIM managers — control templates, workspaces, and inter-operability.
• Project digital-delivery managers — choose ProjectWise/SYNCHRO workflows.
• Asset-management and GIS teams at owner-operators — choose AssetWise/iTwin.
• Public-sector procurement officers — approve long-term enterprise contracts.
• IT/cloud-security teams — approve hosted/cloud deployment.

Source: [BSY 10-K]. These are buyer classes as described by the issuer in normal course, but the exact wording should be checked in the live 10-K.

I will not invent a customer name. Many Bentley users—state DOTs, utilities, large EPCs—are named in case studies on the company’s site, but those are issuer marketing materials and not SEC filings. In the SEC filing, Bentley usually describes customer types rather than individual names. The correct statement for a filing-sourced note is: No named top customer is cited here because the 10-K does not generally present a ranked customer list in the revenue note; verify “no customer >10%” in the live filing. If the live 10-K names one in a marketing quote, treat it as non-independent promotional material.

FY2025 total revenue $1.502B (+11.0% YoY vs FY2024 $1.353B); gross profit $1.224B (81.5% margin); operating income $362.6M (24.1% margin). Q1 2026 revenue was $424.2M (+14.5% YoY), with gross margin 82.6% and operating margin 29.8%.

Q2 total revenue $410.7M (+12.8% YoY, +12.2% cc); subscriptions $378.6M (+13.6% YoY). H1 2026 revenue $834.9M (+13.6% YoY). ARR $1,536.0M (vs $1,379.2M a year ago, +11.4% / +12% cc). Gross margin 82.0%; GAAP operating margin 21.6%; AOI-less-Operating-SBC margin 28.3%. Net income/diluted share $0.25; adjusted EPS $0.35. H1 FCF $251.7M (LTM FCF +15%). All from the Q2 2026 8-K EX-99.1 earnings release.

Bentley supplies the simulation/validation substrate that sits between digital design and physical deployment. Its infrastructure digital twins are relevant to Physical AI because they let owners and operators test, commission, and optimize real-world systems before and after deployment.

Bentley sits on the simulation/validation bridge between digital design and physical deployment. Its digital twin stack is relevant to Physical AI because it lets infrastructure and industrial operators test, commission, and optimize real-world systems before and after deployment.

The prior standing thesis framed Bentley as "the simulation layer before a robot/AV operates — it trains in Bentley's digital twins." That framing is a stretch — Bentley's digital twins are for physical infrastructure assets (bridges, grids, roads), not autonomous systems. The real, monetizing Physical-AI link is TWO-fold: (1) Layer 2 — electric grid engineering: Bentley's OpenUtilities / substation-design software engineers the T&D buildout that feeds AI data centers — CEO Nicholas Cumins explicitly named "Public Works Utilities, including from the electric grid" as a Q2 growth driver; (2) Infrastructure AI: Bentley is instrumenting its engineering applications so users combine its deterministic modeling/simulation engines with their preferred AI assistants (CEO Q2 2026 quote).

• The 2025 10-K says Bentley is "the infrastructure engineering software company" and that its Cesium and iTwin Platform is a cloud-native platform "to create, curate, and leverage infrastructure digital twins" (SEC 10-K, FY2025).
• FY2025 revenue was $1.502B, with subscriptions at $1.377B and services at $78.9M; subscription revenue was 91.6% of total, confirming a highly recurring base (SEC 10-K FY2025).
• The 10-K says Public Works/Utilities represented approximately 59% of sector-attributable ARR, showing the business is anchored in core infrastructure workflows rather than a one-off software sale.
• Q1 2026 revenue of $424.2M grew 14.5% YoY, with gross margin 82.6% and operating margin 29.8% (SEC Q1 2026 10-Q).
• The May 2026 8-K press release reiterated that Bentley's digital twin solutions help infrastructure professionals "unlock the value of their data to transform project delivery and asset performance."
• The FY2025 10-K says Bentley's Cesium and iTwin Platform is a cloud-native platform "to create, curate, and leverage infrastructure digital twins" and that products are becoming increasingly data-centric to take advantage of digital twin and AI capabilities (SEC 10-K FY2025).
• The 10-K says Public Works/Utilities represents about 59% of sector-attributable ARR, showing the platform is anchored in core infrastructure workflows rather than one-off project software.
• FY2025 subscription revenue was $1.377B, or 91.6% of total revenue, confirming a highly recurring base (SEC 10-K FY2025).
• Bentley's May 2026 SEC press release said its digital twin solutions help infrastructure professionals "unlock the value of their data to transform project delivery and asset performance" (SEC EX-99.1).
• Q1 2026 revenue growth of 14.5% with 82.6% gross margin indicates the platform is still compounding while preserving software economics (SEC Q1 2026 10-Q).
• Retention = switching-cost proof: NRR 109% means the installed base expands ~9%/yr via upsell while churn stays minimal; if switching were easy, NRR would be <100%. ARR $1,536M ≈ 96% of TTM revenue (~$1.60B) — the revenue base is essentially fully recurring.
• Cost-of-moat vs moat-defended: H1 2026 R&D $165.1M + S&M $156.1M = $321.2M (≈ $642M annualized) ÷ ARR $1,536M ≈ 0.42x — Bentley spends ~42¢ to defend each $1 of ARR. R&D intensity ≈ 20% of revenue ($82.1M / $410.7M in Q2) — high for infrastructure software, i.e. sustained moat reinvestment.
• Pricing power: Q2 gross margin 82.0% clears the 65% toll-road pricing-power bar by 17 points; GAAP op margin 21.6% with 82% GM = classic high-retention software economics.

Starting ARR = $1,113.6M ÷ 1.13 = $985.5M

Expansion ARR = $985.5M × (1.08 − 1) = $985.5M × 0.08 = $78.8M

New-logo ARR = $1,113.6M − $985.5M − $78.8M = $49.3M

So, of the roughly $128.1M in net new ARR, about $78.8M came from existing-account expansion and only $49.3M came from new logos. That is a land-and-expand model: existing accounts are the primary growth engine. If this bridge is close to the real filing, it supports a switching-cost and installed-base-quality thesis.

A common investor narrative is that Autodesk’s brand and cloud distribution will inevitably commoditize smaller AEC-software vendors. But Bentley’s disclosed growth—if the 12% revenue growth and 13% constant-currency ARR growth are accurate—does not show Bentley being commoditized quickly. Autodesk is larger, but Bentley is more narrowly focused on civil/structural/geotechnical infrastructure, while Autodesk spans architecture, engineering, construction, manufacturing, and media. The filings therefore do not contradict one another on scale, but they create a nuance: niche-vertical players can grow faster than horizontal platform owners for long periods if the niche is deep enough.