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- **ARR Growth Acceleration**: Q3 ARR +10.5% YoY (11% ex-China), with Q4 expected to surpass Q3 on renewals and asset analytics.
- **AI-Driven Innovation**: Launch of Connect, OpenSite+, and AI-powered applications positions Bentley as infrastructure AI leader.
- **Financial Strength**: $104M adjusted operating income (+16% YoY), 27.7% margin, and $111M free cash flow, supporting $430-470M annual target.
- **Strategic Momentum**: Google partnership, SMB expansion (+300 logos), and asset analytics pipeline drive long-term growth.

**【Management Opening Remarks】**
- Greg Bentley highlighted Q3 performance in line with expectations, emphasizing AI adoption among customers and AEC firms' AI investments (19-71 basis points of revenue).
- Bentley's ARR growth of 10.5% YoY (11% ex-China) reflects strong E365 renewals and SMB expansion, with 300 new logos added.

**【CEO Commentary】**
- Introduced **Connect**, a new Bentley Infrastructure Cloud layer enabling AI-driven workflows and data reuse across projects.
- Launched **OpenSite+, Substation+, SYNCHRO+**, and AI-powered OpenRoads/AssetWise, showcasing AI integration into core applications.
- Q3 ARR growth of 10.5% YoY, with 109% net retention rate driven by E365 consumption and API monetization.
- Resources sector led growth, while Power Line Systems and Seequent benefit from grid resilience trends.

**【CFO Commentary】**
- Q3 revenues: $376M (+12% YoY), with 92% of ARR from subscriptions.
- Adjusted operating income: $104M (+16% YoY), margin 27.7% (vs. 26.7% prior).
- Free cash flow: $111M, on track for $430-470M annual target.
- Debt reduced by $135M, with $678M convertible notes maturing in 2026.

**【Q&A Highlights】**
- **Q4 ARR growth**: Expected to exceed Q3 due to renewals and asset analytics deals, with potential M&A contributions.
- **Government shutdown**: Minimal impact (<1% direct revenue), but long-term permitting reforms could boost PLS/Seequent.
- **AI monetization**: Enterprise accounts negotiate 10% YoY escalators, balancing consumption mix with API/API-driven growth.
- **Google partnership**: Integrating Cesium and Google Geo data into applications, with asset analytics leveraging Google Street View imagery.
- **Internal AI use**: Enhancing R&D, sales, and G&A productivity, with potential margin expansion through efficiency gains.

Bentley Systems, Incorporated (BSY) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

BSY

BSY fundamentals

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