Summary
Bentley Systems posted third-quarter fiscal 2025 total revenues of $375.5 million, up 12.0% from the prior-year quarter and up 10.6% in constant currency. Year to date, total revenues reached $1,110.2 million, up 10.7%. The growth engine remains subscriptions. Management said subscriptions revenue is now 92% of total revenues and grew 12.1% in constant currency for the quarter. Annualized recurring revenues were $1,405.2 million as of September 30, 2025, compared with $1,270.7 million a year earlier, a constant currency ARR growth rate of 10.5%. The last twelve-month recurring revenues dollar-based net retention rate was 109%, consistent with the same period last year, while account retention was 99%. Recurring revenues represented 92% of total revenues for the twelve months ended September 30, 2025, compared with 91% a year earlier. New accounts contributed 3% growth.
Profitability improved. Gross margin was 80.8% for the quarter, up 0.1 percentage point. Operating income was $84.5 million, up 23.1%, and operating margin was 22.5%, up 2.0 percentage points. Net income was $57.4 million, up 35.5%, and diluted EPS was $0.18, up 38.5%. Non-GAAP measures showed similar momentum. AOI less SBC margin was 27.7%, compared with 26.7%. Adjusted EPS was $0.27, compared with $0.24. Free cash flow was $110.7 million, compared with $84.3 million. Operating cash flow was $116.4 million, up 35.2%, and capital expenditures were $5.7 million, up 215.0%. Deferred revenue was $234.8 million, up 4.2%, and RPO was $252.7 million, up 4.8%. Year to date, operating income was $284.1 million, up 18.0%; net income was $219.2 million, up 18.7%; diluted EPS was $0.67, up 17.5%; operating cash flow was $396.9 million, up 12.2%; and capital expenditures were $12.8 million, up 51.0%. Free cash flow year to date was $384.0 million, compared with $345.2 million.
Operationally, management highlighted AI product announcements at its Year in Infrastructure conference and pointed to Infrastructure AI as a way to broaden consumption, including programmatic API consumption. Subscriptions growth was led by geoprofessional applications and engineering applications, followed by Bentley Infrastructure Cloud. Services revenues were flat in the quarter and declined year to date due to weakness in Asset Performance Services. By region, Americas grew 11.8%, EMEA grew 13.2%, and APAC grew 11.0%. China revenues were essentially flat, with subscriptions down from existing accounts and perpetual licenses up from new accounts. Management said cost of subscriptions and licenses faced higher headcount-related and cloud-related costs, while cost of services benefited from lower third-party personnel costs. Research and development, selling and marketing, and general and administrative expenses all drew management commentary around headcount, compensation, and promotional spending.
Guidance context centers on the full fiscal year. The CFO said solid third-quarter results position Bentley well with respect to its full-year financial outlook, with margin and cash flow performance putting it on track for another year of compounding. The company also noted its 2026 Notes mature in January 2026 and that it remains in compliance with Credit Facility covenants. Management said balance sheet strength and reliable cash flow generation provide capacity for stock repurchases to offset stock-based compensation dilution, a modest dividend, and potential acquisitions. Tax legislation known as the OBBBA is expected to have a favorable impact on cash paid for income taxes in 2025 and 2026, though it is not expected to materially affect the full-year 2025 effective tax rate.
Risks remain familiar for the infrastructure software sector. The forward-looking discussion cited adverse global economic and political conditions, tariffs and related policies, sanctions and embargoes, public health and safety risks, failure to retain personnel or manage succession, changes in customer industries, competitive pressure, product quality, ability to develop and market new products, capital markets and interest rate uncertainty, and the challenge of integrating acquisitions. China remains a specific uncertainty because of geopolitical challenges, obstacles to cloud-deployed software, and a local preference for license sales over subscriptions. The quarter also carried higher cost of subscriptions and licenses tied to headcount and cloud costs, which could pressure margins if those costs persist. Bentley's maturing convertible debt and covenant requirements add balance sheet considerations.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $375.5M | $364.1M | +3.1% | $335.2M | +12.0% |
| Gross profit | $303.4M | $295.3M | +2.7% | $270.3M | +12.2% |
| Gross margin | 80.8% | 81.1% | -0.3 pp | 80.7% | +0.1 pp |
| Research & development | $78.8M | $75.4M | +4.5% | $70.1M | +12.4% |
| Sales & marketing | $72.1M | $69.9M | +3.2% | $64.9M | +11.0% |
| General & administrative | $53.8M | $49.9M | +7.9% | $51.4M | +4.8% |
| Total operating expenses | $218.9M | $210.9M | +3.8% | $201.7M | +8.5% |
| Operating income (loss) | $84.5M | $84.4M | +0.1% | $68.6M | +23.1% |
| Operating margin | 22.5% | 23.2% | -0.7 pp | 20.5% | +2.0 pp |
| Net income (loss) | $57.3M | $70.5M | -18.7% | $42.3M | +35.3% |
| Net margin | 15.3% | 19.4% | -4.1 pp | 12.6% | +2.6 pp |
| Diluted EPS | $0.18 | $0.22 | -$0.04 | $0.13 | +$0.05 |
| Net retention rate | 109.0% | 109.0% | ±0.0 pp | 109.0% | ±0.0 pp |
Risks
MD&A states that future results in China remain uncertain as a result of continued geopolitical challenges, obstacles there to cloud-deployed software, and the financial timing impact of the preference there for license sales rather than subscriptions. China revenues were essentially flat for the three and nine months ended September 30, 2025, with subscriptions revenues in China down from existing accounts.
MD&A notes results of operations have been and will be affected by changes in foreign currency exchange rates and that, other than a natural hedge from matching revenues and expenses in the same currencies, the company does not currently hedge foreign currency exposure. EMEA revenues rose 13.2% actual but only 8.8% on a constant currency basis for the three months ended September 30, 2025.
MD&A states the company will continue to monitor the impact of tariffs and other trade policies on its business and the businesses of its accounts, as well as on its financial condition, results of operations, and/or cash flows, given its global operations and revenue base.
As of September 30, 2025, $677,830 of 2026 Notes principal matures in January 2026 and is classified as long-term based on the company's ability and intent to refinance through available capacity under the Credit Facility. Any failure to comply with covenants could prevent borrowing and could constitute a default causing amounts to become immediately due.
The effective tax rate rose to 31.4% for the three months ended September 30, 2025 from 28.1% in the prior-year quarter, primarily due to discrete tax expenses of $6,455 associated with the limitation of discrete stock-based compensation deductions on U.S. international tax provisions. The nine-month rate rose to 20.2% from 19.3% on lower discrete tax benefits.
ARR resulting from annualization of recurring contracts with consumption measurement durations of less than one year was 51% of total ARR as of September 30, 2025, up from 49% as of September 30, 2024, with the E365 subscription offering representing 45% of total ARR, up from 43%. This concentrates ARR in consumption-based and single-offering exposure.
Services revenues decreased 8.8% for the nine months ended September 30, 2025, driven by a decline in business performance of $5,616 ($5,915 on a constant currency basis) primarily from weakness within Asset Performance Services, and were flat for the three months ended September 30, 2025.
Headcount-related costs increased across the business, with research and development expenses up 12.4% and selling and marketing up 11.0% for the three months ended September 30, 2025, mainly due to increases in headcount and annual and other compensation costs, pressuring operating expense growth.
SaaS KPIs
All quarters →Account Retention Rate
Last Twelve-Months Recurring Revenues
ARR
Adjusted EBITDA
ARR growth rate (constant currency)
Free Cash Flow
Summary, forecast, risks and KPIs are extracted from BENTLEY SYSTEMS INC's SEC filings for Q3 FY2025 (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 1, 2026.