Executive Summary

Q4 2024 delivered double‑digit top-line growth and resilient ARR: revenue $349.8M (+12.6% YoY; +13.2% cc), subscriptions $315.6M (+15.8% YoY; +16.4% cc), ARR $1,283.3M (+12% cc YoY; 12.5% ex‑China) .
Profitability mixed: GAAP operating margin 17.6% (+540 bps YoY), but Adjusted OI w/SBC margin 21.5% (-250 bps YoY on seasonal OpEx and reinvestment); Adjusted EPS $0.21 vs $0.20 last year .
2025 outlook guides to 10.5–12.5% ARR growth (narrowed top‑end by 50 bps due to China), Adjusted OI w/SBC margin ≈28.5%, GAAP revenue $1.461–$1.490B, FCF $415–$455M; quarterly dividend raised to $0.07 .
Stock narrative catalysts: infrastructure AI initiatives (Bentley Asset Analytics, OpenSite Plus), E365 momentum (NRR 110%), EMEA strength; offset by structural China headwinds and lower services revenues (Cohesive/Maximo) .

What Went Well and What Went Wrong

What Went Well

Resilient growth quality: subscriptions now 90% of revenue; LTM recurring revenues 91% of total; NRR rebounded to 110% in Q4, supporting durable growth and visibility .
ARR momentum and new logos: ARR +12% cc YoY (+12.5% ex‑China); ~300 bps ARR contribution from new logos (12th straight quarter with 600+ new SMB logos via online store) .
Strategic positioning in AI and geospatial: CEO highlighted organizational changes and AI product roadmap (Bentley Asset Analytics; OpenSite Plus early access); CTO scope expanded; COO hire (ex‑Google) to drive programs and asset analytics growth .

Management quotes:

“Our year-over-year ARR growth on a constant-currency basis was 12% in 24Q4 (12.5% excluding China)…well positioned to continue our strong performance in 2025 and beyond.” — CEO Nicholas Cumins .
“Adjusted OI w/SBC margin…21.5%…Full-year 27.5%, up 110 bps YoY…consistent with our expectation of annual 100 bps expansion.” — CFO Werner Andre .

What Went Wrong

China headwinds intensified: management plans for continued ARR attrition in 2025 given state‑owned enterprise preference for local software/perpetual; China <2.5% of ARR .
Services revenue softness: professional services declined to 6% of revenue on lower Cohesive Maximo work, pressuring total revenue growth and Q4 margins .
Seasonality and reinvestment compressed Q4 Adjusted margins: Adjusted OI w/SBC margin fell to 21.5% (OpEx seasonality; reinvestment of realignment savings into AI, product, marketing) .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenues ($USD Millions)	$330.3	$335.2	$349.8
YoY Growth % (Total Revenues)	11.3%	9.3%	12.6%
Subscriptions Revenues ($USD Millions)	$297.4	$303.2	$315.6
YoY Growth % (Subscriptions)	14.7%	12.0%	15.8%
Perpetual Licenses ($USD Millions)	$10.9	$11.3	$14.3
Services ($USD Millions)	$22.0	$20.7	$19.9
ARR ($USD Millions, period-end)	$1,215.9	$1,270.7	$1,283.3
Constant Currency ARR YoY Growth %	11%	12%	12%
Operating Income Margin % (GAAP)	24.3%	20.5%	17.6%
Adjusted OI w/SBC Margin %	28.8%	26.7%	21.5%
Diluted EPS ($USD)	$0.22	$0.13	$0.16
Adjusted EPS ($USD)	$0.31	$0.24	$0.21
Cash Flow from Operations ($USD Millions)	$62.6	$86.1	$81.6

Segment mix (Q4 2024):

Revenue Mix	Q4 2024
Subscriptions ($USD Millions)	$315.6
Perpetual Licenses ($USD Millions)	$14.3
Services ($USD Millions)	$19.9
LTM Recurring Revenues as % of Total	91%

Key KPIs:

KPI	Q2 2024	Q3 2024	Q4 2024
Recurring Revenue Net Retention % (cc)	108%	109%	110%
Account Retention % (LTM)	N/A	99%	99%
New Logos ARR Contribution	N/A	3.5 pts	300 bps

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total GAAP Revenues	FY2025	N/A	$1.461–$1.490B	New
Total Revenues (cc)	FY2025	N/A	$1.481–$1.510B	New
Subscriptions Rev. Growth (cc)	FY2025	N/A	10.5%–12.5%	New
Perpetual Licenses Growth (cc)	FY2025	N/A	~Flat	New
Services Growth (cc)	FY2025	N/A	~Flat	New
ARR Growth (cc)	FY2025	10.5%–13% (FY2024 outlook)	10.5%–12.5%	Narrowed top‑end by 50 bps (lowered)
Adjusted OI w/SBC Margin	FY2025	Target +100 bps YoY (FY2024 framework)	≈28.5%	Raised vs 2024 actual 27.5%; maintained +100 bps plan
Effective Tax Rate	FY2025	N/A	≈21%	New
Free Cash Flow	FY2025	N/A	$415–$455M	New
Capital Expenditures	FY2025	N/A	≈$20M	New
Quarterly Dividend	Q1 2025	$0.06 (Q4 2024)	$0.07	Raised $0.01

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
AI/Technology Initiatives	Early traction in asset analytics; confidence AI will become major driver	Announced Cesium acquisition; Google geospatial partnership; asset analytics portfolio; OpenSite Plus (AI for design)	COO hire (ex‑Google); CTO scope consolidated; asset analytics commercialization; OpenSite Plus early access	Building momentum; organizational alignment to accelerate AI-driven innovation
Commercial Programs (E365/SMB)	Subscriptions strength; high recurring mix	E365 + SMB drove ARR; 600+ SMB logos 11th straight quarter	NRR rebounded to 110%; ~300 bps ARR from new logos; 12th straight quarter 600+ SMB logos	Durable growth drivers; improving visibility via floors/ceilings
Regional Trends	North America/Public Works as main growth drivers	Americas/EMEA strong; APAC led by India/SEA; China headwinds	EMEA standout; Americas strong; APAC positive; China declining (<2.5% ARR)	Broad-based strength ex‑China; China structurally weaker
Macro/Policy (Permitting/Data centers)	—	Visibility from IIJA; optimism on infrastructure spend	Expect U.S. permitting reform to catalyze power transmission and mining; data center buildouts as multi‑sector driver	Potential tailwinds in 2025
Services/Cohesive (Maximo)	Cohesive lower; total revenue growth impacted	Delays in Maximo upgrades; services decline; conversion to hosted managed services opportunity	Services ~6% of revenue; continued softness noted	Services mix down; margins benefit from subscriptions mix
Competitive Landscape	—	Highlighted openness and platform value; SMB digital engagement	Competitors lowering price in commercial facilities; BSY retaining share in civil infrastructure	BSY portfolio breadth/moat holds in core infra

Management Commentary

“Subscription revenues now represent 90% of total revenues… improving the overall quality of our total revenues in terms of growth consistency, predictability and margin contribution.” — CFO Werner Andre .
“We intend to introduce a new indicator that better reflects overall consumption growth… we have a long runway of growth within our accounts.” — CEO Nicholas Cumins .
“Our 2025 financial outlook is consistent with sustained objectives of low double-digit ARR growth, ~100 bps annual margin expansion and strong free cash flow conversion.” — CFO Werner Andre .
“We are strongly positioned to capture the many growth opportunities that we have opened up with infrastructure AI.” — CEO Nicholas Cumins .

Q&A Highlights

ARR range drivers: Higher end could be propelled by permitting reform accelerating mining and transmission grid projects; drags are China and commercial facilities softness .
U.S. permitting reform: Early executive order; bipartisan priority; timing uncertain but viewed as “when, not if” catalyst .
Asset Analytics monetization: Asset‑based model; construction-phase use may be non‑recurring; operations-phase use is recurring—large long‑term opportunity .
Competitive dynamics: Competitors cutting prices in commercial facilities; BSY retaining share given infra portfolio breadth and focus .
Data center buildouts: Multi‑sector demand driver across power transmission, water, transportation; shows up in industrial/resources/public works, not commercial facilities .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 was unavailable at the time of retrieval due to SPGI rate limits. Values retrieved from S&P Global were not accessible.

Revenue Consensus Mean (Q4 2024): N/A — unavailable
Primary EPS Consensus Mean (Q4 2024): N/A — unavailable

Actuals vs consensus comparison cannot be provided this quarter. Reported actuals: revenue $349.8M; diluted EPS $0.16; Adjusted EPS $0.21 .

Key Takeaways for Investors

Quality of revenue improving: 90% subscriptions and 91% LTM recurring support durability; NRR at 110% indicates healthy expansion within accounts .
Growth visibility strong via E365 floors/ceilings; ARR +12% cc YoY (12.5% ex‑China), with SMB/new logos adding incremental ARR; EMEA strength and APAC momentum (India/SEA) bolster outlook .
Profitability trajectory intact despite Q4 seasonality: 2024 Adjusted OI w/SBC margin 27.5% (+110 bps YoY); 2025 guided ≈28.5% with ongoing reinvestment in AI/products .
2025 guide conservative on China: ARR 10.5–12.5% (top end narrowed 50 bps), revenue $1.461–$1.490B, FCF $415–$455M, CapEx ~$20M; SBC expected ~5% of revenue in 2025 (rising toward 6% longer term) .
Strategic AI/geospatial moves (Asset Analytics, OpenSite Plus, Cesium/Google) create multi‑year TAM expansion and potential upside, including construction‑phase monetization and ops‑phase recurring revenue .
Services mix down (Cohesive/Maximo) reduces volatility and lifts margins; watch for potential hosted managed services transitions longer term .
Trading lens: Near term, dividend increase and visibility in ARR/margins are supportive; watch China attrition and Q1/Q2 seasonality of FCF (~55–60% H1) for timing; medium term thesis anchored on AI-led product cycle and E365 expansion .

BENTLEY SYSTEMS INC (BSY)·Q4 2024 Earnings Summary