Summary
Bentley Systems opened fiscal 2026 with revenue of $424.2 million, up 14.5% from the prior-year quarter, or 11.9% on a constant currency basis. Annualized recurring revenues reached $1,494.5 million as of March 31, 2026, against $1,319.3 million a year earlier, a constant currency ARR growth rate of 11.5%. The last twelve-month recurring revenues dollar-based net retention rate was 109%, down from 110%, while the account retention rate held at 99%. Recurring revenues represented 93% of total revenues over the trailing twelve months. Growth came from expansion at existing accounts and from new account additions, most notably small and medium-sized accounts. Management singled out the Resources business as its fastest-growing sector and described demand from Public Works Utilities as steady. ARR from consumption-based subscriptions made up 51% of total ARR, and the E365 offering accounted for 46%.
Profitability was solid, though the operating margin narrowed. Gross profit was $350.4 million, up 14.9%, and gross margin reached 82.6%, up 0.3 percentage points. Operating income of $126.3 million rose 9.6%, but operating margin of 29.8% was down 1.3 percentage points because operating expenses grew faster than revenue. The MD&A attributes much of that to higher headcount-related costs in research and development, selling and marketing, and general and administrative expense, plus higher promotional spending and lower capitalizable costs on internal-use software implementation. Net income was $95.4 million, up 4.4%, and diluted EPS was $0.30, up 7.1%. On a non-GAAP basis, adjusted EPS was $0.38 against $0.35, AOI less Operating SBC margin was 33.2% against 34.6%, and adjusted EBITDA was $163.4 million against $148.1 million.
Cash generation stepped back. Operating cash flow was $193.4 million, down 11.9%. Free cash flow, which deducts capital spending, was $187.9 million, down from $216.4 million. Capital expenditures rose 82.4% to $5.55 million, reflecting higher purchases of property and equipment and capitalized software. The MD&A pins the operating cash decline on lower cash from changes in operating assets and liabilities, largely accounts payable, collection timing, and lower Cloud Services Subscription deposits. Forward-looking indicators still improved. Current deferred revenue of $266.0 million was up 9.0%, and remaining performance obligations of $284.4 million were up 9.1%.
Capital allocation stayed busy. Bentley repaid its 2026 convertible notes when they matured in January 2026 and, on April 23, 2026, amended its credit facility to add a $550 million term loan, lifting total borrowing capacity to $1.85 billion. Management framed the move as lowering interest costs and adding flexibility for acquisitions and shareholder returns. Net debt leverage was under 2x at quarter end. The company also continued its buyback and paid its quarterly dividend.
The quarterly release did not include specific revenue or earnings guidance figures. CFO Werner Andre said the results position the company well within its full-year financial outlook, and the only forward-looking frame offered was the full fiscal year, not the coming quarter. Investors get a longer list of named risks. The forward-looking statement section flags adverse changes in global economic or political conditions, the impact of tariffs and related policies on Bentley and on the industries it serves, sanctions and embargoes that restrict counterparties or operations, failure to retain personnel or manage succession, shifts in the industries it serves, a competitive environment, product quality, and the ability to develop and market new products for changing technological needs. It also cites capital markets access, changing or uncertain interest rates, and the ability to integrate acquired businesses and identify future acquisitions. The credit facility adds another exposure: any covenant failure would block further borrowing and could trigger a default, and the agreement limits dividend payments. The pivot to AOI less Operating SBC as the primary performance measure also makes year-over-year operating comparisons less mechanical, since prior periods were restated to the new definition.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $424.2M | $391.6M | +8.3% | $370.5M | +14.5% |
| Gross profit | $350.4M | $320.7M | +9.3% | $304.9M | +14.9% |
| Gross margin | 82.6% | 81.9% | +0.7 pp | 82.3% | +0.3 pp |
| Research & development | $83.0M | $81.0M | +2.5% | $72.5M | +14.6% |
| Sales & marketing | $75.3M | $84.5M | -10.9% | $63.1M | +19.4% |
| General & administrative | $58.5M | $66.4M | -11.9% | $47.2M | +23.9% |
| Total operating expenses | $224.1M | $242.2M | -7.4% | $189.7M | +18.2% |
| Operating income (loss) | $126.3M | $78.5M | +60.8% | $115.2M | +9.6% |
| Operating margin | 29.8% | 20.1% | +9.7 pp | 31.1% | -1.3 pp |
| Net income (loss) | $95.3M | $58.7M | +62.5% | $91.3M | +4.4% |
| Net margin | 22.5% | 15.0% | +7.5 pp | 24.6% | -2.2 pp |
| Diluted EPS | $0.30 | $0.18 | +$0.12 | $0.28 | +$0.02 |
| Net retention rate | 109.0% | — | — | 110.0% | -1.0 pp |
Risks
The company states it does not hedge foreign currency exposure beyond the natural hedge from matching revenues and expenses in the same currencies. Foreign exchange reduced FY2026 Q1 total revenues by $9,288 thousand versus prior-year rates, with the EMEA region absorbing the largest hit at $6,404 thousand.
Interest expense, net increased 115.3% to $8,200 thousand in the FY2026 Q1 quarter versus the prior-year quarter, driven by higher weighted average debt outstanding and rates after the January 2026 repayment of the 2026 Notes ($678,254 thousand including accrued interest) was funded with Credit Facility borrowings. Any covenant failure would block further borrowing under the Credit Facility and could constitute a default under the 2027 Notes.
Constant currency headcount-related costs rose sharply across the FY2026 Q1 quarter, including increases of $6,436 thousand in research and development, $6,184 thousand in selling and marketing, and $7,135 thousand in general and administrative, reflecting higher headcount and annual and other compensation costs.
Operating margin declined 1.3 percentage points to 29.8% in the FY2026 Q1 quarter even as revenue rose 14.5%, with general and administrative expense up 23.9%. The company also expects general and administrative expense to include amortization of internal-use software implementation costs starting in 2026, after lower capitalizable internal-use software costs already added to expense in the quarter.
The last twelve-month recurring revenues dollar-based net retention rate declined to 109% as of March 31, 2026 from 110% as of March 31, 2025, and the constant currency ARR growth rate was 11.5% versus 12% for the prior period, indicating moderating expansion within existing accounts.
Cash and cash equivalents held domestically fell to $3,977 thousand at March 31, 2026 from $39,093 thousand at December 31, 2025, and operating cash flow decreased 11.9% to $193,408 thousand in the FY2026 Q1 quarter versus the prior-year quarter on lower net cash flows from operating assets and liabilities.
SaaS KPIs
All quarters →Account Retention Rate
Last Twelve-Months Recurring Revenues
Constant Currency ARR Growth Rate
Annualized Recurring Revenue (ARR)
Last Twelve-Month Recurring Revenues Dollar-Based Net Retention Rate
Free Cash Flow
Summary, forecast, risks and KPIs are extracted from BENTLEY SYSTEMS INC's SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.