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Sun Oct 25 · markets closed1 signal on Oct 2494 insider buys this week · $48.3MCIRO short report next: Oct 30The week ahead

BSY

BENTLEY SYSTEMS INC
NASDAQ · TECHNOLOGY · SERVICES-PREPACKAGED SOFTWARE
39.70
+0.29 +0.74%
USD · close Oct 23
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MKT CAP —P/E 43.6DIV YIELD 0.71%FCF YIELD —REV TTM $1.6B +12.8%NET INCOME $290M +14.0%NET DEBT $1.1B52W 28.42 – 52.20SEC XBRL · TTM TO Invalid Date

How BSY rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
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Dropped
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words, now 39,608

New in FY2025

  • Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10‑K for management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
  • Our mission is to reshape how infrastructure systems and critical resources are delivered and optimized.
  • Executive Summary: • Total revenues were $1,501,779 for the year ended December 31, 2025, up 11.0% or 10.1% on a constant currency basis (1) compared to the prior year; • Subscriptions revenues were $1,376,696 for the year ended December 31, 2025, up 12.5% or 11.7% on a constant currency basis (1) compared to the prior year; • ARR (2) was $1,462,145 as of December 31, 2025, compared to $1,283,256 as of December 31, 2024; Constant currency (1) ARR growth rate (2) was 11.5%; • Last twelve-month recurring revenues dollar-based net retention rate (2) was 109% as of December 31, 2025, compared to 110% as of December 31, 2024; • Operating income was $362,621 for the year ended December 31, 2025, compared to $302,150 for the prior year; • Adjusted operating income less stock-based compensation expense (“AOI less SBC”) (previously titled Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”)) (1) was $429,917 for the year ended December 31, 2025, compared to $372,222 for the prior year; and • Cash flows from operating activities were $538,464 for the year ended December 31, 2025, compared to $435,292 for the prior year.
  • (1) Constant currency and AOI less SBC are non‑GAAP financial measures.
  • Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definitions and our uses of constant currency and AOI less SBC.
  • Table of C ontents Results of Operations: Our results of operations have been, and in the future will be, affected by changes in foreign currency exchange rates.
  • For the years ended December 31, 2025, 2024, and 2023, approximately 33%, 34%, and 35%, respectively, of our total revenues and 45%, 42%, and 45%, respectively, of our total operating expenses were denominated in a currency other than the U.S. dollar including most significantly: euros, British pounds, Canadian dollars, Australian dollars, Chinese yuan renminbi, and New Zealand dollars.
  • Additionally, because we have operations in, and derive revenue from, geographies around the world, we will continue to monitor the impact of tariffs and other trade policies on our business and the businesses of our accounts, as well as on our financial condition, results of operations, and/or cash flows.
  • Our total revenues are diversified by account type, size, and geographic region.
  • The majority of our revenue growth, excluding the impact from acquisitions, is driven by additional subscriptions revenues from existing accounts using the same products.
  • To a lesser extent, our revenue growth is attributable to subscriptions revenues from new accounts and subscriptions revenues from existing accounts using new products.
  • We believe that we have a loyal account base, with over 70% of our total revenues for the years ended December 31, 2025, 2024, and 2023 generated from organizations that have been our accounts for over ten years.
  • In addition to our results of operations discussed below, the following is supplemental data of our revenues: Year Ended December 31, (as a percentage of total revenues) 2025 2024 2023 Revenues from: Direct sales channels 94 % 93 % 92 % Indirect channel partners 6 % 7 % 8 % Revenues from: Subscriptions 92 % 90 % 88 % Recurring services 1 % 1 % 1 % Total recurring revenues 93 % 91 % 89 % Perpetual licenses and other services 7 % 9 % 11 % Largest account represents no more than 2 % 2 % 2 % The volume, mix, and duration of contract types starting or renewing in any given period may have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period-over-period.
  • Table of C ontents Consolidated Revenues % Change % Change 2024 to 2025 2023 to 2024 Constant Constant Year Ended December 31, Currency Currency 2025 2024 2023 % % (1) % % (1) Subscriptions $ 1,376,696 $ 1,223,362 $ 1,080,307 12.5 % 11.7 % 13.2 % 13.4 % Perpetual licenses 46,180 45,961 46,038 0.5 % 0.1 % (0.2 %) 0.5 % Subscriptions and licenses 1,422,876 1,269,323 1,126,345 12.1 % 11.2 % 12.7 % 12.9 % Services 78,903 83,772 102,068 (5.8 %) (6.6 %) (17.9 %) (18.2 %) Total revenues $ 1,501,779 $ 1,353,095 $ 1,228,413 11.0 % 10.1 % 10.1 % 10.3 % (1) Constant currency is a non‑GAAP financial measure.
  • Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
  • The increase in total revenues for the year ended December 31, 2025 was primarily driven by an increase in subscriptions revenues, partially offset by a decrease in services revenues.
  • For the year ended December 31, 2025, the increase in subscriptions revenues was driven by improvements in our business performance of $153,334 ($142,592 on a constant currency basis).
  • For the year ended December 31, 2025, the improvements in business performance were primarily driven by expansion from accounts with revenues in the prior period (“existing accounts”), and growth of 2.5% attributable to new accounts, most notably small- and medium-sized accounts.
  • Improvements in business performance for the year ended December 31, 2025 were led by Bentley Open Applications , followed by Seequent applications, and Bentley Infrastructure Cloud .
  • For the year ended December 31, 2025, perpetual licenses revenues were flat compared to the prior year.
  • For the year ended December 31, 2025, the decrease in services revenues was driven by a decline in our business performance of $4,869 ($5,548 on a constant currency basis), primarily due to the winding down of a large services project in the beginning of 2025.
  • Revenues by Geographic Region Revenue from external customers is attributed to individual countries based upon the location of the customer. % Change % Change 2024 to 2025 2023 to 2024 Constant Constant Year Ended December 31, Currency Currency 2025 2024 2023 % % (1) % % (1) Americas $ 790,495 $ 717,002 $ 650,926 10.3 % 10.4 % 10.2 % 10.5 % EMEA 436,828 388,384 353,550 12.5 % 9.2 % 9.9 % 9.1 % APAC 274,456 247,709 223,937 10.8 % 10.7 % 10.6 % 11.8 % Total revenues $ 1,501,779 $ 1,353,095 $ 1,228,413 11.0 % 10.1 % 10.1 % 10.3 % (1) Constant currency is a non-GAAP financial measure.
  • For the year ended December 31, 2025, the increase in revenues from the Americas was primarily driven by improvements in our business performance of $73,493 ($74,816 on a constant currency basis).
  • The improvements in business performance for the year ended December 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S., as well as increases in our subscriptions revenues from new accounts.
  • For the year ended December 31, 2025, the increase in revenues from EMEA was primarily driven by improvements in our business performance of $48,444 ($35,754 on a constant currency basis).
  • The improvements in business performance for the year ended December 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom (“U.K.”) and the Middle East, as well as increases in our subscriptions revenues from new accounts, partially offset by a decline in services revenues.
  • For the year ended December 31, 2025, the increase in revenues from APAC was primarily driven by improvements in our business performance of $26,747 ($26,524 on a constant currency basis).
  • The improvements in business performance for the year ended December 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in Australia and India, as well as increases in our subscriptions revenues from new accounts.
  • Additionally, for the year ended December 31, 2025, our revenues in China were essentially flat.
  • Our perpetual licenses revenues in China increased primarily due to expansion from new accounts, partially offset by a decline from existing accounts.
  • Our subscriptions revenues in China decreased primarily due to a decline from existing accounts, partially offset by an increase from new accounts.
  • Cost of Revenues and Operating Expenses Headcount-Related Costs For the years ended December 31, 2025, 2024, and 2023, approximately 80% of our aggregate cost of revenues, research and development, selling and marketing, and general and administrative expenses were represented by what we refer to herein as “headcount‑related” costs.
  • These costs primarily include salaries, benefits, bonuses, stock‑based compensation expense, employment taxes, travel, training, and realignment and optimization of our colleagues, and third‑party personnel expenses and related overhead.
  • During the fourth quarter of 2023, we approved a strategic realignment program to better serve our accounts and to better align resources with the strategy of the business, including reinvestment in go-to-market functions, as well as in AI in product development (the “2023 Program”).
  • The 2023 Program activities, including payments of termination benefits, were completed as of December 31, 2024.
  • Table of C ontents Cost of Revenues % Change % Change 2024 to 2025 2023 to 2024 Constant Constant Year Ended December 31, Currency Currency 2025 2024 2023 % % (1) % % (1) Cost of subscriptions and licenses $ 201,405 $ 173,340 $ 169,406 16.2 % 15.9 % 2.3 % 2.4 % Cost of services 76,125 84,427 96,677 (9.8 %) (10.8 %) (12.7 %) (12.8 %) Total cost of revenues $ 277,530 $ 257,767 $ 266,083 7.7 % 7.1 % (3.1 %) (3.1 %) (1) Constant currency is a non-GAAP financial measure.
  • Cost of subscriptions and licenses expenses primarily include headcount‑related costs, as well as cloud‑related costs incurred for servicing our accounts using cloud provisioned offerings and our license administration platform.
  • For the year ended December 31, 2025, on a constant currency basis, cost of subscriptions and licenses expenses increased primarily due to an increase in headcount‑related costs of $15,149, mainly due to an increase in annual and other compensation costs, and an increase in cloud-related costs of $10,007.
  • For the year ended December 31, 2025, on a constant currency basis, cost of services expenses decreased primarily due to a decrease in headcount‑related costs of $6,718, mainly due to a reduction in third‑party personnel costs, and to a lesser extent, lower annual and other compensation costs.
  • Operating Expenses % Change % Change 2024 to 2025 2023 to 2024 Constant Constant Year Ended December 31, Currency Currency 2025 2024 2023 % % (1) % % (1) Research and development $ 307,576 $ 281,247 $ 274,619 9.4 % 9.1 % 2.4 % 2.7 % Selling and marketing 289,543 255,177 224,336 13.5 % 12.8 % 13.7 % 14.1 % General and administrative 217,332 210,374 180,738 3.3 % 2.9 % 16.4 % 16.5 % Deferred compensation plan 14,409 12,382 13,580 16.4 % 16.4 % (8.8 %) (8.8 %) Amortization of purchased intangibles 32,768 33,998 38,515 (3.6 %) (3.8 %) (11.7 %) (11.8 %) Total operating expenses $ 861,628 $ 793,178 $ 731,788 8.6 % 8.2 % 8.4 % 8.6 % (1) Constant currency is a non-GAAP financial measure.

and 410 more.

Gone since FY2024

  • Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10‑K for management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
  • We empower people to design, build, and operate better and more resilient infrastructure through the adoption of our intelligent digital twin solutions.
  • Executive Summary: • Total revenues were $1,353,095 for the year ended December 31, 2024, up 10.1% or 10.3% on a constant currency basis (1) compared to the prior year; • Subscriptions revenues were $1,223,362 for the year ended December 31, 2024, up 13.2% or 13.4% on a constant currency basis (1) compared to the prior year; • ARR (2) was $1,283,256 as of December 31, 2024, compared to $1,174,774 as of December 31, 2023, representing a constant currency (1) ARR growth rate (2) of 12%; • Last twelve-month recurring revenues dollar-based net retention rate (2) was 110% as of December 31, 2024, compared to 109% as of December 31, 2023; • Operating income was $302,150 for the year ended December 31, 2024, compared to $230,542 for the prior year; • Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”) (1) was $372,222 for the year ended December 31, 2024, compared to $324,677 for the prior year; and • Cash flows from operations was $435,292 for the year ended December 31, 2024, compared to $416,696 for the prior year.
  • (1) Constant currency and Adjusted OI w/SBC are non‑GAAP financial measures.
  • Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definitions and our uses of constant currency and Adjusted OI w/SBC.
  • Results of Operations: Impact of Foreign Currency Our results of operations have been, and in the future will be, affected by changes in foreign currency exchange rates.
  • For the years ended December 31, 2024, 2023, and 2022, approximately 34%, 35%, and 36%, respectively, of our total revenues and 42%, 45%, and 46%, respectively, of our total operating expenses were denominated in a currency other than the U.S. dollar including most significantly: euros, British pounds, Canadian dollars, Australian dollars, Chinese yuan renminbi, and New Zealand dollars.
  • Our total revenues are diversified by account type, size, and geography.
  • Our sources of revenue growth, excluding the impact from acquisitions, primarily come from additional subscriptions revenues from existing accounts using the same products and represent the majority of our revenue growth, additional subscriptions revenues from existing accounts using new products, and subscriptions revenues from new accounts.
  • We believe that we have a loyal account base, with over 70% of our total revenues for the years ended December 31, 2024, 2023, and 2022 generated from organizations that have been our accounts for over ten years.
  • In addition to our results of operations discussed below, the following is supplemental data of our revenues: Year Ended December 31, (as a percentage of total revenues) 2024 2023 2022 Revenues from: Direct sales channels 93 % 92 % 92 % Indirect channel partners 7 % 8 % 8 % Revenues from: Subscriptions 90 % 88 % 87 % Recurring services 1 % 1 % 2 % Total recurring revenues 91 % 89 % 89 % Perpetual licenses and other services 9 % 11 % 11 % Largest account represents no more than 2 % 2 % 2 % The volume, mix, and duration of contract types starting or renewing in any given period may have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period-over-period.
  • Consolidated Revenues % Change % Change 2023 to 2024 2022 to 2023 Constant Constant Year Ended December 31, Currency Currency 2024 2023 2022 % % (1) % % (1) Subscriptions $ 1,223,362 $ 1,080,307 $ 960,220 13.2 % 13.4 % 12.5 % 12.5 % Perpetual licenses 45,961 46,038 43,377 (0.2 %) 0.5 % 6.1 % 7.3 % Subscriptions and licenses 1,269,323 1,126,345 1,003,597 12.7 % 12.9 % 12.2 % 12.3 % Services 83,772 102,068 95,485 (17.9 %) (18.2 %) 6.9 % 7.5 % Total revenues $ 1,353,095 $ 1,228,413 $ 1,099,082 10.1 % 10.3 % 11.8 % 11.9 % (1) Constant currency is a non‑GAAP financial measure.
  • Refer to the “Non-GAAP Financial Measures” section for additional information, including our prior definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
  • The increase in total revenues for the year ended December 31, 2024 was driven by an increase in subscriptions revenues, partially offset by decreases in services revenues.
  • For the year ended December 31, 2024, the increase in subscriptions revenues was primarily driven by improvements in our business performance of $143,055 ($144,846 on a constant currency basis).
  • For the year ended December 31, 2024, the improvements in business performance were primarily driven by expansion from accounts with revenues in the prior period (“existing accounts”), and growth of 3% attributable to new accounts, most notably small- and medium-sized accounts.
  • Improvements in business performance for the year ended December 31, 2024 were led by our engineering applications, followed by Seequent geoprofessional applications, and our Bentley Infrastructure Cloud for project delivery.
  • For the year ended December 31, 2024, perpetual licenses revenues were flat compared to the prior year.
  • For the year ended December 31, 2024, the decrease in services revenues was driven by a decline in our business performance of $18,296 ($18,526 on a constant currency basis), driven primarily from weakness in Maximo-related work within our digital integrator, Cohesive.
  • Revenues by Geographic Region Revenue from external customers is attributed to individual countries based upon the location of the customer. % Change % Change 2023 to 2024 2022 to 2023 Constant Constant Year Ended December 31, Currency Currency 2024 2023 2022 % % (1) % % (1) Americas $ 717,002 $ 650,926 $ 584,794 10.2 % 10.5 % 11.3 % 11.4 % EMEA 388,384 353,550 312,804 9.9 % 9.1 % 13.0 % 12.1 % APAC 247,709 223,937 201,484 10.6 % 11.8 % 11.1 % 13.0 % Total revenues $ 1,353,095 $ 1,228,413 $ 1,099,082 10.1 % 10.3 % 11.8 % 11.9 % (1) Constant currency is a non-GAAP financial measure.
  • For the year ended December 31, 2024, the increase in revenues from the Americas was primarily driven by improvements in our business performance of $66,076 ($68,067 on a constant currency basis).
  • The improvements in business performance for the year ended December 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S., partially offset by a decline in services revenues.
  • For the year ended December 31, 2024, the increase in revenues from EMEA was primarily driven by improvements in our business performance of $34,834 ($32,195 on a constant currency basis).
  • The improvements in business performance for the year ended December 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom (“U.K.”), the Middle East, and Africa, partially offset by a decline in services revenues.
  • For the year ended December 31, 2024, the increase in revenues from APAC was primarily driven by improvements in our business performance of $23,772 ($26,308 on a constant currency basis).
  • The improvements in business performance for the year ended December 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in Australia, Southeast Asia, and India, partially offset by declines of our subscriptions revenues from existing accounts in China.
  • Cost of Revenues and Operating Expenses Headcount-Related Costs For the years ended December 31, 2024, 2023, and 2022, approximately 80% of our aggregate cost of revenues, research and development, selling and marketing, and general and administrative expenses were represented by what we refer to herein as “headcount‑related” costs.
  • These costs primarily include salaries, benefits, bonuses, stock‑based compensation expense, employment taxes, travel, training, and realignment of our colleagues, and third‑party personnel expenses and related overhead.
  • During the fourth quarter of 2023, the Company approved a strategic realignment program to better serve our accounts and to better align resources with the strategy of the business, including reinvestment in go-to-market functions, as well as in AI in product development (the “2023 Program”).
  • The realignment program activities have been broadly implemented across our various businesses, which were substantially completed by the end of the second quarter of 2024, and payment of termination benefits were completed as of December 31, 2024.
  • The impact of the realignment program on headcount-related costs for the year ended December 31, 2024 and 2023 is included in our discussion below.
  • Cost of Revenues % Change % Change 2023 to 2024 2022 to 2023 Constant Constant Year Ended December 31, Currency Currency 2024 2023 2022 % % (1) % % (1) Cost of subscriptions and licenses $ 173,340 $ 169,406 $ 147,578 2.3 % 2.4 % 14.8 % 15.1 % Cost of services 84,427 96,677 89,435 (12.7 %) (12.8 %) 8.1 % 9.0 % Total cost of revenues $ 257,767 $ 266,083 $ 237,013 (3.1 %) (3.1 %) 12.3 % 12.8 % (1) Constant currency is a non-GAAP financial measure.
  • Cost of subscriptions and licenses expenses primarily include headcount‑related costs, as well as cloud‑related costs incurred for servicing our accounts using cloud provisioned solutions and our license administration platform.
  • For the year ended December 31, 2024, on a constant currency basis, cost of subscriptions and licenses expenses increased primarily due to an increase in cloud‑related costs of $10,859.
  • Partially offsetting this increase was lower amortization of capitalized costs under our ACDP of $3,983 as compared to the prior year and lower headcount‑related costs of $2,090 primarily due to lower stock‑based compensation expense.
  • For the year ended December 31, 2024, on a constant currency basis, cost of services expenses decreased primarily due to a decrease in headcount‑related costs of $12,514, mainly due to a reduction in third‑party personnel costs.
  • Operating Expenses % Change % Change 2023 to 2024 2022 to 2023 Constant Constant Year Ended December 31, Currency Currency 2024 2023 2022 % % (1) % % (1) Research and development $ 281,247 $ 274,619 $ 257,856 2.4 % 2.7 % 6.5 % 7.5 % Selling and marketing 255,177 224,336 195,622 13.7 % 14.1 % 14.7 % 14.9 % General and administrative 210,374 180,738 174,647 16.4 % 16.5 % 3.5 % 3.6 % Deferred compensation plan 12,382 13,580 (15,782) (8.8 %) (8.8 %) NM NM Amortization of purchased intangibles 33,998 38,515 41,114 (11.7 %) (11.8 %) (6.3 %) (6.3 %) Total operating expenses $ 793,178 $ 731,788 $ 653,457 8.4 % 8.6 % 12.0 % 12.5 % Percentage changes that are considered not meaningful are denoted with NM.
  • (1) Constant currency is a non-GAAP financial measure.
  • Our allocation of research and development resources is based on a cost‑benefit analysis of acquiring available technology in the marketplace versus developing our own solutions.
  • We anticipate that we will continue to make substantial investments in research and development because we believe the infrastructure engineering software market presents compelling opportunities for the application of new technologies that advance our current solutions.

and 443 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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