Bentley Systems: The Digital Twin Leader Poised for Infrastructure Growth

The global push for sustainable infrastructure and digital transformation is creating a once-in-a-generation opportunity for companies like Bentley Systems (NYSE: BSY). As governments and corporations worldwide invest in resilient, data-driven infrastructure, Bentley’s position as a leader in digital twin technologies and smart infrastructure software is primed to accelerate. A recent JPMorgan presentation on May 14, 2025, underscored the company’s strategic advantages, validating its role as a critical partner in industrial digital transformation. With a 12% annual recurring revenue (ARR) growth rate, strong cash flows, and a portfolio of game-changing acquisitions, Bentley’s stock presents a compelling entry point for investors seeking exposure to this high-growth sector.

The Digital Twin Revolution: Bentley’s Strategic Edge

Bentley’s iTwin platform is at the core of its value proposition, offering end-to-end lifecycle management for infrastructure projects—from design to construction to asset performance. The platform’s ability to create real-time digital replicas of physical assets enables clients to optimize efficiency, reduce costs, and address climate-related risks. This is particularly critical as governments prioritize sustainable infrastructure spending, with estimates suggesting a $9 trillion funding gap in the U.S. alone over the next decade.

The JPMorgan presentation highlighted Bentley’s geographic and sector diversification, which insulates it from regional economic headwinds. With revenue streams spanning transportation, water, energy, and urban development, the company benefits from “local infrastructure imperatives” in every country. For example, its Seequent division—a recent acquisition—has become a leader in subsurface geoscience modeling, critical for mining and critical mineral exploration. Meanwhile, its partnership with Google Cloud (leveraging Vertex AI and Street View data) is enabling advanced analytics for disaster recovery and asset management, as seen in Los Angeles County’s wildfire response efforts.

Growth Catalysts: Demand Drivers and Financial Fortitude

1. Digital Twin Adoption Accelerates

The demand for digital twins is surging as industries face two existential challenges: engineer shortages and aging infrastructure. With a global 9% engineer vacancy rate, clients rely on Bentley’s software to automate workflows, reduce project backlogs, and extend the lifespan of assets. The company’s 110% net retention rate (up from 108% in 2024) underscores its ability to upsell and retain clients, a testament to the stickiness of its subscription model.

2. Smart Infrastructure Spending Booms

Governments are pouring capital into resilient infrastructure. The U.S. Infrastructure Investment and Jobs Act (IIJA) has allocated $1.2 trillion, while the EU’s “rearm Euro plan” and Germany’s €500 billion climate fund are prioritizing digital upgrades. Bentley’s 92% recurring revenue mix ensures it captures this demand steadily, with ARR now exceeding $1.319 billion—up 12% year-over-year.

3. Financial Resilience and Capital Allocation

Bentley’s free cash flow of $216 million (up 7.5% YoY) fuels growth initiatives, dividends, and share repurchases. CFO Werner Andre emphasized plans to refinance convertible debt and invest in strategic acquisitions, such as its 2024 purchase of Cesium, which enhanced 3D geospatial capabilities.

Why Now? Undervalued Amid Rising Demand

Despite its strong fundamentals, BSY trades at 12x EV/Sales and 30x EV/EBITDA, below peers like Autodesk (ADSK) and Trimble (TRMB). Analysts at JPMorgan recently initiated coverage with a $52 price target (21% below current levels), but this overlooks the secular tailwinds in infrastructure software. Key catalysts include:
- JPMorgan validation: The May 14 presentation reinforced Bentley’s leadership in digital twin innovation, potentially lifting institutional interest.
- ARR growth visibility: With 85% of ARR from subscriptions, the business is highly predictable.
- Sustainability focus: The 2024 Impact Report highlighted 2,000+ sustainable infrastructure projects using Bentley’s tools, aligning with ESG mandates.

Risks and Mitigations

• Geopolitical headwinds: Reduced China exposure (now <2.5% of ARR) and strong growth in India and the Middle East mitigate risks.
• Competition: While rivals like PTC and ESRI exist, Bentley’s engineer-centric focus and full lifecycle platform create defensible moats.

Conclusion: A Rare Opportunity in Industrial Tech

Bentley Systems is uniquely positioned to capitalize on the $230 billion infrastructure software market, which is projected to grow at a 10% CAGR through 2030. Its JPMorgan presentation crystallized its status as a leader in digital twin innovation, with financials that defy economic uncertainty. With a low P/S ratio and a stock price still recovering from 2023 volatility, now is the time to act before the market catches up to Bentley’s true potential.

Investors should consider BSY as a core holding in their industrial tech portfolios, especially as governments worldwide double down on resilient infrastructure. The next 12 months could see BSY’s valuation gap close—don’t miss this chance to ride the digital twin wave.

This analysis is based on public data as of May 13, 2025. Always conduct further research or consult a financial advisor before making investment decisions.