Breaking Down Bentley Systems, Incorporated (BSY) Financial Health: Key Insights for Investors

Are you an investor keeping a close watch on the infrastructure engineering software sector? Are you curious about the financial stability and growth potential of Bentley Systems Incorporated? In 2024, the company demonstrated significant strides, reporting a 10.2% increase in revenue, reaching $1.35 billion, and a 17.7% increase in EBITDA to $377 million. With key metrics like a 110% net dollar retention rate and a substantial $200 million share buyback program, how sustainable is this performance, and what does it mean for future investment opportunities? Read on to explore a detailed breakdown of Bentley Systems' financial health, providing you with the insights needed to make informed decisions.

Bentley Systems, Incorporated (BSY) Revenue Analysis

Understanding Bentley Systems, Incorporated (BSY)'s financial performance requires a detailed look at its revenue streams. The company has demonstrated consistent growth, driven primarily by its subscription-based model and strategic expansion across various sectors and regions. Let's break down the key components of BSY's revenue.

For additional insights into the company's strategic direction, you might find this resource helpful: Mission Statement, Vision, & Core Values of Bentley Systems, Incorporated (BSY).

Breakdown of Primary Revenue Sources:

• Subscriptions: Subscriptions are a major revenue source, accounting for 90.4% of the annual revenue.
• Services: Value-added services contribute to 6.2% of the annual revenue.
• Perpetual Licenses: The sale of perpetual licenses makes up the remaining 3.4%.

Year-over-Year Revenue Growth Rate:

Bentley Systems has shown substantial revenue growth over the past year.

• The company's annual revenue for 2024 was $1.35 billion, marking a 10.15% increase from 2023.
• Total revenues for the fourth quarter of 2024 reached $349.8 million, a 12.6% increase year-over-year.

Contribution of Different Business Segments to Overall Revenue:

Bentley Systems' revenue is derived from several key sectors:

• Public Works/Utilities: Representing 59% of sector-attributable ARR.
• Resources: Contributing 27% of sector-attributable ARR.
• Industrial: Accounting for 9% of sector-attributable ARR.
• Commercial/Facilities: Making up 5% of sector-attributable ARR.

Geographical Performance:

The company's revenue is well-diversified geographically:

• Americas: The Americas region experienced a 10.2% increase in revenue, driven by subscription revenue expansion in the U.S. Approximately 41% of revenue comes from the United States, and 11.5% from the rest of the Americas.
• EMEA: The EMEA region saw a 9.9% increase, with growth in the U.K., Middle East, and Africa. This region accounts for 28.7% of the total revenue.
• Asia Pacific (APAC): The APAC region contributes 18.3% of the total revenue.

Analysis of Significant Changes in Revenue Streams:

Bentley Systems has strategically shifted its focus towards subscription-based revenue, which now constitutes a significant portion of its income. The increasing percentage of revenue from Enterprise 365 subscriptions highlights this trend:

• 2024: 42% of total subscription revenue
• 2023: 38% of total subscription revenue
• 2022: 32% of total subscription revenue

The following table summarizes Bentley Systems' financial performance metrics for 2024:

Additionally, Bentley Systems is actively managing its capital by:

• Increasing its quarterly dividend from $0.05 per share in 2023 to $0.06 per share in 2024.
• Authorizing up to $200 million in share repurchases through June 30, 2026.
• Repurchasing 1,292,733 shares for $64.359 million in 2024.

These strategic initiatives reflect Bentley Systems' commitment to growth, profitability, and returning value to its shareholders.

Bentley Systems, Incorporated (BSY) Profitability Metrics

Analyzing Bentley Systems, Incorporated (BSY)'s profitability involves examining its gross profit, operating profit, and net profit margins to understand its financial health and operational efficiency. These metrics provide insights into how well the company manages its costs and generates profit from its revenue.

For the fiscal year 2024, Bentley Systems reported a revenue of $1.2 billion. The company's financial performance can be further dissected by looking at its profitability margins:

• Gross Profit: This is calculated as revenue less the cost of goods sold. A higher gross profit indicates that the company is efficient in producing its goods or services.
• Operating Profit: This is earnings before interest and taxes (EBIT). It's derived by deducting operating expenses from gross profit, showcasing the profitability of the company's core business operations.
• Net Profit: This is the profit remaining after all expenses, including interest, taxes, and other deductions, have been subtracted from revenue. It represents the actual profit available to shareholders.

Here’s a summary of key profitability figures for Bentley Systems, Incorporated, based on the latest available data:

The trends in profitability over time can reveal whether Bentley Systems is improving its efficiency and cost management. Consistently increasing margins suggest better operational performance, while declining margins could indicate rising costs or pricing pressures.

Comparing Bentley Systems’ profitability ratios with industry averages offers valuable context. If the company’s margins are higher than its peers, it may indicate a competitive advantage. Conversely, lower margins might suggest areas for improvement.

Operational efficiency is critical for maintaining and improving profitability. Bentley Systems focuses on:

• Cost Management: Controlling costs is essential to expanding profit margins. Efficient cost management directly contributes to higher profitability.
• Gross Margin Trends: Monitoring gross margin trends helps the company understand the effectiveness of its production and pricing strategies. A rising gross margin typically signals improved efficiency.

For more insights into Bentley Systems, Incorporated (BSY), explore Exploring Bentley Systems, Incorporated (BSY) Investor Profile: Who’s Buying and Why?

Bentley Systems, Incorporated (BSY) Debt vs. Equity Structure

Understanding how Bentley Systems, Incorporated (BSY) finances its operations and growth is crucial for investors. The balance between debt and equity plays a significant role in assessing the company's financial stability and potential for future expansion. Let's delve into BSY's debt levels, ratios, and financing strategies.

As of the fiscal year 2024, Bentley Systems, Incorporated (BSY) exhibits a well-managed debt profile. A detailed look into their financial statements reveals the following:

• Long-term Debt: Bentley Systems, Incorporated (BSY) carries a substantial amount of long-term debt, which is used to fund significant projects and strategic initiatives.
• Short-term Debt: The company also utilizes short-term debt to manage immediate financial obligations and operational expenses.

Analyzing these figures in isolation, however, doesn't provide a complete picture. The debt-to-equity ratio is a key metric for understanding the extent to which Bentley Systems, Incorporated (BSY) relies on debt versus equity to finance its assets. This ratio is calculated by dividing total liabilities by shareholders' equity.

Bentley Systems, Incorporated (BSY)’s debt-to-equity ratio can be juxtaposed against industry benchmarks to gauge its financial leverage relative to its peers. A lower ratio generally indicates a more conservative financial approach, while a higher ratio might suggest a more aggressive growth strategy financed by debt.

Recent activities, such as new debt issuances or refinancing, provide insights into Bentley Systems, Incorporated (BSY)'s strategic financial management. Credit ratings from agencies like Standard & Poor's and Moody's offer an external validation of the company's creditworthiness, influencing borrowing costs and investor confidence.

Striking a balance between debt financing and equity funding is paramount for Bentley Systems, Incorporated (BSY). Debt can provide leverage and potentially enhance returns on equity, but excessive debt can increase financial risk. Equity funding, on the other hand, dilutes ownership but strengthens the balance sheet. Bentley Systems, Incorporated (BSY) adeptly navigates these considerations to support sustainable growth and shareholder value.

For further insights into the investors profile of Bentley Systems, Incorporated (BSY), explore: Exploring Bentley Systems, Incorporated (BSY) Investor Profile: Who’s Buying and Why?

Bentley Systems, Incorporated (BSY) Liquidity and Solvency

Assessing Bentley Systems, Incorporated (BSY)'s financial health involves a detailed look at its liquidity, which indicates its ability to meet short-term obligations. Key metrics like the current and quick ratios, working capital trends, and cash flow statements provide insights into the company's liquidity position.

Here's how we can break down BSY's liquidity:

• Current and Quick Ratios: These ratios measure a company's ability to pay off its current liabilities with its current assets. A current ratio of around 2.0 or higher is generally considered healthy, suggesting the company has twice as many current assets as current liabilities. The quick ratio, which excludes inventory from current assets, offers a more conservative view of liquidity.
• Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, indicates the funds available for day-to-day operations. Monitoring the trend of working capital helps to identify whether a company's short-term financial health is improving or deteriorating.
• Cash Flow Statements Overview: The cash flow statement is crucial for understanding the movement of cash both into and out of a company. It is generally divided into three sections:

• Operating Activities: This reflects the cash generated from the company's core business operations. Positive and stable operating cash flow is a good sign.
• Investing Activities: This section includes cash flow from the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Activities: This involves cash flow related to debt, equity, and dividends.

Analyzing these components helps to reveal whether the company is generating enough cash from its operations to cover its investments and financing needs.

Potential liquidity concerns or strengths can be identified by examining these factors:

• A declining current or quick ratio might indicate potential liquidity issues.
• Consistently negative operating cash flow could signal problems with the company's core business model.
• A growing cash balance and positive working capital trend typically suggest a strong liquidity position.

For instance, let's consider a hypothetical scenario based on BSY's financial data:

In this scenario, both the current and quick ratios have improved, indicating a stronger ability to meet short-term liabilities. The increase in working capital and operating cash flow further supports the assessment of a healthy liquidity position.

Explore more insights into Bentley Systems, Incorporated (BSY)'s financial health: Breaking Down Bentley Systems, Incorporated (BSY) Financial Health: Key Insights for Investors

Bentley Systems, Incorporated (BSY) Valuation Analysis

Assessing whether Bentley Systems, Incorporated (BSY) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. A thorough examination of these elements provides investors with a clearer perspective on the company's current market valuation.

To determine if Bentley Systems, Incorporated (BSY) is correctly valued, consider the following:

• Price-to-earnings (P/E) Ratio: This ratio compares the company's stock price to its earnings per share. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers.
• Price-to-book (P/B) Ratio: The P/B ratio relates a company's market capitalization to its book value of equity. It can help determine whether the stock price is reasonable compared to the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is used to assess the overall value of a company compared to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It’s particularly useful for comparing companies with different capital structures.

Analyzing Bentley Systems, Incorporated (BSY)'s stock price trends over the past year, or longer, can reveal important insights into market sentiment and investor confidence. Significant price appreciation might suggest strong market approval, while a declining trend could signal concerns about the company's future prospects. As of April 18, 2025, BSY's stock has shown mixed performance. For instance, the stock demonstrated a notable increase, climbing from approximately $47.17 on May 03, 2024, to around $55.18 by July 26, 2024. However, it experienced a downturn, reaching about $45.37 on October 25, 2024. The stock then recovered, peaking at approximately $54.99 on March 24, 2025, before slightly decreasing to $52.83 by April 18, 2025.

Dividend yield and payout ratios are crucial for investors seeking income. Bentley Systems, Incorporated (BSY)'s dividend yield, if applicable, indicates the return on investment based on dividends alone. The payout ratio shows the proportion of earnings paid out as dividends, which can indicate the sustainability of dividend payments. Bentley Systems' latest dividend, paid on June 6, 2024, was $0.050 per share. The ex-date was May 16, 2024, and the payment was for shareholders of record on May 20, 2024.

To provide a clearer picture, here's a hypothetical overview of valuation metrics (Note: This is for illustrative purposes only and does not reflect actual real-time data):

Analyst consensus plays a significant role in determining stock valuation. A consensus rating of 'buy' suggests analysts believe the stock is undervalued and has potential for appreciation. Conversely, a 'sell' rating indicates the stock may be overvalued. A 'hold' rating implies a neutral stance. As of April 2025, the consensus among analysts for Bentley Systems, Incorporated (BSY) is leaning towards a 'hold', suggesting a neutral outlook on the stock's potential.

For more insights into Bentley Systems, Incorporated (BSY), you might find this resource helpful: Mission Statement, Vision, & Core Values of Bentley Systems, Incorporated (BSY).

Bentley Systems, Incorporated (BSY) Risk Factors

Bentley Systems faces a variety of internal and external risks that could impact its financial health. These risks range from industry-specific challenges to broader economic and regulatory factors.

Here's a breakdown of key risk areas:

• Industry Competition: The competitive environment in which Bentley Systems operates is a significant factor. The company must continuously innovate and maintain the quality of its products to compete effectively.
• Regulatory Changes: Increasing regulation around AI and data privacy, such as GDPR and PIPL, could impact Bentley’s operations and innovation. Compliance with these regulations is costly and complex, potentially affecting the adoption of its solutions. The US regulatory reform may be delayed or postponed. If this factor is already reflected in the current share price, the stock's growth potential may be lower than expected.
• Market Conditions: Demand for Bentley's software solutions is volatile and dependent on infrastructure projects, which have long timelines and are subject to economic fluctuations. A decrease in government spending on infrastructure could negatively impact demand.
• Economic and Political Conditions: Adverse changes in global economic and/or political conditions could significantly affect Bentley Systems. Political, economic, regulatory, and public health and safety risks and uncertainties in the countries and regions in which the company operates also play a role. Operations outside the U.S. account for a significant portion of its revenue, exposing it to foreign economic and political risks.

Here's a more detailed look at specific types of risks:

• Operational Risks:
  • Foreign Operations: A significant portion of Bentley Systems' revenue comes from operations outside the U.S., exposing the company to foreign economic and political risks.
  • Currency Exchange Rates: Currency exchange rate fluctuations pose a risk, as a substantial portion of revenue is denominated in foreign currencies.
  • Personnel Retention: Failure to retain personnel necessary for the operation of the business or those that the company acquires could disrupt operations.
  • Succession Management: Failure to effectively manage succession could lead to instability and loss of expertise.
• Financial Risks:
  • Debt Obligations: Bentley Systems has $1.39 billion in long-term debt, with cash reserves totaling only $64 million.
  • Restrictive Covenants: The company's credit agreement contains restrictive covenants that limit operational flexibility.
  • Ownership Changes: Changes in ownership by the Bentley Family could trigger an event of default.
  • Access to Financing: Changes in capital markets could impact the company's ability to access financing on terms satisfactory to them or at all.
  • Interest Rates: The impact of changing or uncertain interest rates on the company and on the industries it serves is a risk factor.
• Strategic Risks:
  • Integration of AI: The integration of AI into Bentley's offerings presents challenges, including slow adoption and regulatory hurdles.
  • Acquisition Integration: The company's ability to integrate acquired businesses successfully is crucial.
  • Future Investments: The ability to identify and consummate future investments and/or acquisitions on terms satisfactory to the company or at all is a risk.
  • Convertible Debt: The majority of Bentley Systems' debt is convertible, which creates dilution risk upon conversion.

Bentley Systems is addressing these risks through various mitigation strategies:

• Debt Management: The company reduced its long-term debt from $1,518,403 in 2023 to $1,388,088 in 2024, primarily through repayments under its credit facility. Net debt repayments in 2024 totaled $147 million.
• Debt Refinancing: The company moved some debt maturing in 2025 to 2029, mitigating short-term risks.
• Liquidity: A $1.3 billion credit facility provides additional liquidity for operational funding.
• Share Repurchases: The company extended its stock repurchase program, authorizing up to $200 million in repurchases through June 30, 2026, and repurchased 1,292,733 shares for $64,359 in 2024.
• Dividend Increases: Bentley Systems increased its quarterly dividend from $0.05 per share in 2023 to $0.06 per share in 2024, reflecting a commitment to returning value to shareholders.

For more insights into Bentley Systems' financial health, check out this analysis: Breaking Down Bentley Systems, Incorporated (BSY) Financial Health: Key Insights for Investors

Bentley Systems, Incorporated (BSY) Growth Opportunities

Bentley Systems, Incorporated (BSY) demonstrates strong future growth prospects, driven by several key factors. These include continuous product innovation, strategic market expansions, well-planned acquisitions, and advantageous partnerships. These elements collectively enhance the company's competitive positioning and potential for sustained financial growth.

Key growth drivers for Bentley Systems, Incorporated (BSY) are multifaceted:

• Product Innovation: Bentley Systems consistently invests in research and development to enhance its software solutions, meeting the evolving needs of infrastructure professionals.
• Market Expansion: The company strategically expands its global footprint, targeting high-growth regions and sectors within the infrastructure market.
• Acquisitions: Bentley Systems has a track record of acquiring companies that complement its existing offerings, broadening its product portfolio and market reach.

Future revenue growth projections and earnings estimates for Bentley Systems, Incorporated (BSY) reflect positive trends. According to the company's 2024 fiscal year results, they anticipate continued growth in key sectors. While specific forward-looking statements can fluctuate, the general outlook remains optimistic, supported by ongoing digital transformation in infrastructure and construction.

Strategic initiatives and partnerships are also crucial for Bentley Systems' growth:

• Digital Twins: Focus on digital twin technology enhances project lifecycle management and operational efficiency.
• Cloud Services: Expansion of cloud-based services offers scalable, accessible solutions for infrastructure projects.
• Strategic Alliances: Partnerships with major industry players extend Bentley Systems' reach and integration capabilities.

Bentley Systems, Incorporated (BSY) holds several competitive advantages that underpin its growth trajectory:

• Comprehensive Software Suite: Offers end-to-end solutions for infrastructure design, engineering, and operations.
• Industry Expertise: Deep understanding of infrastructure workflows and regulatory requirements.
• Global Presence: Extensive network of offices and partners worldwide.

To provide a clearer picture, consider the following hypothetical financial projections (note: these are illustrative and not based on specific 2024 guidance):

These projections suggest a steady growth pattern, driven by the factors mentioned above. For more insights into the company's investor profile, you might find this resource helpful: Exploring Bentley Systems, Incorporated (BSY) Investor Profile: Who’s Buying and Why?