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SEC filingTotal revenues grew 10.2% YoY in Q2 2025, driven by 12.1% subscriptions growth; ARR constant currency growth 11.5%.
For the three months ended June 30, 2025, Bentley Systems reported total revenues of $364.1 million, a 10.2% increase compared to $330.3 million in the same period last year. On a constant currency basis, revenue growth was 9.2%. The primary driver was subscription revenue, which rose 12.1% (11.2% constant currency) to $333.5 million, fueled by expansion from existing accounts and contributions from new accounts, particularly small- and medium-sized ones. Perpetual licenses declined 6.2% to $10.2 million, while services revenue decreased 7.1% to $20.5 million due to weakness in Asset Performance Services.
Gross profit increased to $295.3 million from $267.1 million, yielding a gross margin of 81.1% compared to 80.9% in the prior year. Cost of revenues grew 8.8%, with cost of subscriptions and licenses up 12.6% driven by higher headcount and cloud-related costs, partially offset by realignment expenses not recurring.
Operating income rose 5.3% to $84.4 million, but operating margin contracted to 23.2% from 24.3% due to operating expenses growing faster than revenue. Research and development expenses increased 14.7% (14.5% constant currency) to $75.4 million, and selling and marketing expenses rose 22.3% (21.8% constant currency) to $69.9 million, both reflecting higher headcount and compensation costs. General and administrative expenses decreased 9.1% (9.4% constant currency) to $49.9 million, mainly due to lower incentive compensation related to the CEO transition and absence of prior-year corporate initiatives costs, partially offset by higher charitable contributions. Deferred compensation plan expense swung to $7.6 million from $0.9 million, driven by mark-to-market adjustments.
AOI less SBC (Adjusted Operating Income less Stock-Based Compensation), a non-GAAP metric management uses as primary performance measure, increased to $105.2 million from $95.3 million, up 10.4%, indicating solid underlying operational performance.
Bentley Systems operates as a single reportable segment, but geographic revenue breakdown reveals region-specific drivers:
Revenue mix continues to shift toward subscriptions, which represented 91.6% of total revenue in Q2 2025 versus 90.0% in Q2 2024. The recurring revenue base remains sticky, with account retention at 99% and a dollar-based net retention rate of 109% (up from 108%). ARR reached $1.379 billion, with a constant currency growth rate of 11.5%.
Management did not provide explicit forward guidance, but several strategic themes emerged. The company expects continued growth in subscription revenue driven by existing account expansion and new account additions, especially among small- and medium-sized businesses. The E365 subscription offering now represents 45% of total ARR (up from 43%), indicating a successful shift to consumption-based models. However, headwinds in China due to geopolitical tensions and cloud deployment obstacles may persist. The recent enactment of the One Big Beautiful Bill Act (OBBBA) in July 2025 is expected to favorably impact cash taxes in 2025, primarily through restored immediate deductions for domestic R&D. Liquidity remains strong with $89.6 million in cash and $1.3 billion available under the credit facility, supporting ongoing buybacks, dividends, and M&A activity. The company repurchased 1.17 million shares for $50 million and paid dividends of $0.07 per share in the first half of 2025.
As of June 30, 2025, Bentley Systems reported cash and cash equivalents of $89.6 million, up from $64.0 million at year-end 2024. Total assets were $3.42 billion, relatively flat. Total debt decreased to $1.25 billion from $1.39 billion, driven by net repayments of $142.2 million during the first half, including $9.8 million in repurchases of convertible notes. The company has $1.30 billion available under its credit facility. Deferred income tax assets stood at $201.7 million.
The company has $88.0 million in non-cancelable purchase commitments as of June 30, 2025, primarily for cloud provisioning and internal-use software costs, payable through September 2029. No new material commitments were entered in the first half of 2025. Operating lease liabilities total $36.9 million (current + long-term) and additional minimum lease payments of $6.4 million for executed but not yet commenced leases.
Bentley operates as a single reportable segment. Revenue for Q2 2025 was $364.1 million, up 10.2% year-over-year. Operating income was $84.4 million (23.2% margin). Geographic mix: Americas $194.1M (53%), EMEA $105.4M (29%), APAC $64.6M (18%). Subscription revenue dominated at $333.5 million, with Enterprise subscriptions (E365) contributing $150.2 million.
Operating cash flow of $280.5M significantly exceeded net income of $161.8M, reflecting strong cash conversion driven by non-cash charges (depreciation, stock-based compensation, deferred taxes) and favorable working capital changes. Accounts receivable decreased by $36.6M, and cloud services subscription deposits added $27.4M, while payables and deferred revenues were modest drags. Capital expenditures were minimal at $7.1M (2.5% of CFO), indicating a capital-light model. Free cash flow (CFO minus capex) of approximately $273.4M comfortably covered capital returns of $92.5M (share repurchases $50.0M and dividends $42.5M). Financing activities were dominated by net debt repayments of $135.3M, reflecting deleveraging. Overall, cash generation remains robust with ample liquidity to support shareholder returns and organic investments.