Bentley Systems' Q4 2024: Navigating Contradictions in Permitting Reforms and Infrastructure Demand

These are the key contradictions discussed in Bentley Systems' latest 2024Q4 earnings call, specifically including: Permitting Reform Expectations, Infrastructure Spending Demand, Infrastructure Demand and Spending, and Competitive Landscape:



Revenue and Subscription Growth:
- Bentley Systems reported total revenues of $350 million for Q4 2024, up 13% year-over-year on both a reported and constant currency basis.
- Subscription revenues, which now represent 90% of total revenues, grew 16% year-over-year for the quarter.
- This growth was driven by strong demand across sectors and geographies, particularly from the E365 program and new logo acquisitions.

ARR and Organic Growth:
- ARR growth was 12% year-over-year and 12.5% excluding the impact of China for Q4 2024.
- The company saw ARR compounding at an annual growth rate of 16.3% in constant currency, driven by strong renewal rates and higher floors for E365 accounts.

Challenges in China:
- ARR in China has declined substantially and structurally, leading to a lower than 2.5% share of total ARR.
- This decline is attributed to soft economic conditions, shifting preferences towards local software, and geopolitical issues.

Operational and Financial Performance:
- Adjusted operating income with stock-based compensation was reported as $75 million for Q4, with a margin of 21.5%.
- The company maintained a strong free cash flow conversion, achieving 94% of adjusted EBITDA to cash flow from operations.