Bentley Systems (BSY) Q4 FY25 earnings call: guidance and Q&A

What are the most important elements that could push constant currency ARR growth to the higher end of the 2026 range, and is AI one of them?

AI is contributing now through asset analytics, which is growing faster than other areas. However, not all asset analytics revenue is classified as annual recurring (ARR) yet, as inspections are not always annual regulatory requirements. The goal is to make it annual through automated AI-based analytics, which will take time to fully translate into ARR.

“AI will goose our asset analytics revenues, it takes time for that to come into ARR per se.”

asked by Matthew Hedberg · answered by Gregory Bentley

With leverage at an optimal level and $400 million capacity for programmatic acquisitions, does this signal a pickup in tuck-in acquisitions?

While the company has been focused on asset analytics opportunities due to higher leverage in the past, with leverage now reduced, they are expanding M&A focus beyond asset analytics. The $400 million capacity is what the balance sheet can afford without increasing leverage, not necessarily a target for annual spend, but indicates increased flexibility.

“But now with leverage down to where it is, we are expanding our -- where we're open in M&A to beyond asset analytics potentially. And it's not that we're necessarily trying to do $400 million in annual acquisitions. But even if we did as much as $400 million, it wouldn't increase our leverage from where we are now.”

asked by Jason Celino · answered by Gregory Bentley

Is the increased attention on digital twins opening up pipeline or making it easier to fund digital twin projects, especially as a foundation for physical AI?

The company is making investments in digital twins as easy as possible by embedding the technology directly into its products. Processes previously powered by files are now powered by digital twins (e.g., design review, 4D construction modeling, asset inspection). This adoption is happening organically as users leverage Bentley's products, often without explicitly realizing they are using digital twin technology.

“So it's basically happening without the accounts necessarily being aware of it, because it is a technology which is underlying our products across our portfolio now.”

asked by Joseph Vruwink · answered by Nicholas Cumins

What macro assumptions are baked into guidance, particularly regarding infrastructure budgets and project delays? Also, clarify revenue contribution from the two Q4 acquisitions.

The macro environment assumed for 2026 is consistent with 2025. Slowdowns were only observed in commercial facilities, while other sectors like Resources and Public Works Utilities grew well. The company does not break out revenue from acquisitions, only onboarded ARR for platform acquisitions.

“In the macro environment, we are assuming for 2026 is remarkably consistent with what we've seen in 2025, yes.”

asked by Sitikantha Panigrahi · answered by Nicholas Cumins

How much of the 2026 services revenue recovery is driven by asset analytics versus core Maximo-related business?

The improvement in services revenue is primarily related to the IBM Maximo business, which constitutes the bulk of services revenue. Investments in upgrading to the newest versions of Maximo (MAS 8 and 9) have resumed, starting in mid-2025 and expected to continue. Asset Analytics acquisitions bring minimal data acquisition services, and the company intends to minimize that aspect.

“Yes. We've seen definitely an improvement of our services business related to IBM Maximo. And that is the bulk of our services revenue.”

asked by Kristen Owen · answered by Nicholas Cumins

Which AI opportunities (asset analytics vs. design) will become a reality sooner, and how will monetization show up in the model?

Asset analytics monetization is immediate. For design, the biggest challenge is user take-up due to institutional impediments. The focus is on helping users identify APIs for AI agents to improve design outcomes, with monetization evolving through API consumption. The company will work out monetization with accounts as their 'digital quartermaster' during the year, expecting massive expansion of consumption and computing for modeling and simulation.

“Well, asset analytics is immediate. But what's interesting is that with Talon, we started with API consumption.”

asked by Joshua Tilton · answered by Gregory Bentley

How do we think about the pace of monetization potential of embedded design data, both internally and with third-party vendors, in the next 12 months versus several years?

Bentley is already monetizing the compounding of semantically addressable project data through ProjectWise and Bentley Infrastructure Cloud, which is their largest individual product by ARR. This monetization comes from enabling accounts to use their own data for AI training and optimization within Bentley's products. In the longer run, there are potential additional data monetization opportunities, such as offering third-party geospatial data (e.g., Google 3D photorealistic tiles) or engineering insights from operations and maintenance as context for design.

“So we're already monetizing the compounding of semantically addressable project data that becomes more valuable now with the opportunity for our accounts to use it themselves to -- in the ways we've described, including training their own AI models and for optimization to occur within our modeling and simulation products, but under their own AI agents, exploring that outcome space.”

asked by Koji Ikeda · answered by Gregory Bentley