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Bentley Systems, Class B (BSY)
:BSY
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Bentley Systems
(NASDAQ:BSY)78Outperform
Positive Factors
Earnings
Subscription revenue of $315.6mn was above our $310.6mn estimate and consensus of $315.0mn.
Government policy
Management commentary on US government spending was constructive, likely mitigating some investor fears related to DOGE-driven federal spending cuts.
Negative Factors
Growth challenges
Bentley Systems faces challenges in showing meaningful growth acceleration with limited catalysts for mid-term revenue tailwinds.
Bentley Systems (BSY) vs. S&P 500 (SPY)
Market Cap
$13.04B
Dividend Yield0.56%
Average Volume (3M)1.32M
Price to Earnings (P/E)59.4
Beta (1Y)1.12
Revenue Growth9.06%
EPS Growth109.03%
CountryUS
Employees5,200
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)0.72
Shares Outstanding291,565,800
10 Day Avg. Volume1,883,147
30 Day Avg. Volume1,315,235
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)N/A
Price to Sales (P/S)9.64
Price to Cash Flow (P/CF)39.90
P/FCF Ratio41.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$56.50Price Target Upside31.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Bentley Systems Business Overview & Revenue Model
Company DescriptionBentley Systems, Incorporated (BSY) is a leading global provider of software solutions for infrastructure engineering. The company specializes in delivering innovative solutions for the design, construction, and operation of infrastructure assets, including buildings, roads, bridges, airports, and industrial facilities. Bentley's comprehensive software portfolio supports all phases of infrastructure projects, from planning and design to construction and operations, empowering engineers, architects, contractors, and owner-operators to improve project efficiency and performance.
How the Company Makes MoneyBentley Systems generates revenue primarily through the sale of software licenses and subscriptions. The company offers a range of software products under different licensing models, including perpetual licenses, term licenses, and subscriptions, catering to various customer needs. Additionally, Bentley provides maintenance and support services, which contribute to recurring revenue streams. The company's revenue is also bolstered by its comprehensive training and professional services, assisting clients in maximizing the value of their software investments. Significant partnerships with engineering firms, governments, and infrastructure owners further enhance Bentley's market reach and revenue potential.
Bentley Systems Financial Statement Overview
Summary
Bentley Systems showcases strong financial health with robust revenue and cash flow growth. The net profit margin slightly decreased, and moderate leverage on the balance sheet requires careful management. Overall, financial performance is solid, driven by effective cost and cash flow management.Income Statement
Bentley Systems shows strong revenue growth with a 10.2% increase from 2023 to 2024. The gross profit margin is high at 80.9%, indicating effective cost management. However, the net profit margin decreased to 17.3% from 26.6% in the previous year, reflecting increased costs or reduced efficiency in operations.88
Very Positive
Balance Sheet
The company's debt-to-equity ratio stands at 1.37, indicating moderate leverage relative to equity. Return on Equity (ROE) improved to 22.6%, showcasing efficient use of equity to generate profits. The equity ratio is stable at 30.6%, reflecting a balanced asset financing structure. However, the high debt level could pose a risk if not managed properly.82
Very Positive
Cash Flow
Bentley Systems experienced a 7.5% growth in free cash flow, highlighting strong cash generation. The operating cash flow to net income ratio is robust at 1.85, suggesting effective cash management. The free cash flow to net income ratio is high, indicating that the company is generating more cash than its net income, which is a positive sign of liquidity.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.35B | 1.23B | 1.10B | 965.05M | 801.54M | Gross Profit |
| 1.10B | 910.24M | 862.07M | 748.51M | 634.39M | EBIT |
| 302.15M | 230.54M | 208.61M | 94.59M | 150.15M | EBITDA |
| 382.44M | 288.44M | 297.63M | 152.34M | 206.03M | Net Income Common Stockholders |
| 234.79M | 326.79M | 174.78M | 93.19M | 126.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 64.01M | 68.41M | 71.68M | 329.34M | 122.01M | Total Assets |
| 3.40B | 3.32B | 3.17B | 2.66B | 1.13B | Total Debt |
| 1.43B | 1.57B | 1.82B | 1.49B | 294.38M | Net Debt |
| 1.36B | 1.50B | 1.75B | 1.16B | 172.37M | Total Liabilities |
| 2.36B | 2.44B | 2.59B | 2.25B | 784.44M | Stockholders Equity |
| 1.04B | 883.28M | 572.75M | 409.22M | 341.60M |
| Cash Flow | Free Cash Flow | |||
| 421.25M | 391.69M | 255.78M | 270.49M | 241.89M | Operating Cash Flow |
| 435.29M | 416.70M | 274.32M | 288.02M | 258.34M | Investing Cash Flow |
| -143.27M | -60.50M | -770.13M | -1.06B | -117.33M | Financing Cash Flow |
| -289.85M | -359.07M | 243.03M | 982.58M | -136.51M |
Bentley Systems Technical Analysis
Negative
43.02
Price Trends
46.06
Negative
47.45
Negative
48.57
Negative
Market Momentum
-0.99
Positive
37.10
Neutral
20.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BSY, the sentiment is Negative. The current price of 43.02 is below the 20-day moving average (MA) of 45.27, below the 50-day MA of 46.06, and below the 200-day MA of 48.57, indicating a bearish trend. The MACD of -0.99 indicates Positive momentum. The RSI at 37.10 is Neutral, neither overbought nor oversold. The STOCH value of 20.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BSY.
Bentley Systems Risk Analysis
Bentley Systems disclosed 37 risk factors in its most recent earnings report. Bentley Systems reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bentley Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $38.34B | 57.01 | 13.63% | ― | 15.67% | 15.64% | |
78 Outperform | $13.04B | 59.44 | 24.39% | 0.56% | 9.06% | 109.03% | |
69 Neutral | $55.98B | 50.69 | 49.69% | ― | 12.46% | 22.28% | |
66 Neutral | $16.63B | 11.32 | 29.37% | ― | -3.04% | 388.42% | |
66 Neutral | $28.50B | 49.76 | 10.03% | ― | 12.11% | 14.35% | |
63 Neutral | $19.32B | 50.17 | 12.99% | ― | 6.05% | 63.78% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
BSY
Bentley Systems
43.02
-5.48
-11.30%
ANSS
Ansys
325.61
-7.96
-2.39%
ADSK
Autodesk
259.75
1.49
0.58%
TRMB
Trimble
69.06
6.22
9.90%
VEEV
Veeva Systems
246.80
19.05
8.36%
PTC
PTC
162.65
-23.70
-12.72%
Bentley Systems Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -5.82% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call presents a strong performance with significant progress in subscription revenue growth, strategic acquisitions, and organizational enhancements aimed at accelerating innovation. However, challenges persist in China and service revenue declines, indicating mixed macroeconomic conditions.Highlights
Subscription Revenue Growth
Subscriptions increased to 90% of total revenues, with an annual growth rate of 16.3% in constant currency. This growth adds quality and consistency to the revenue stream.
Acquisition of Cesium
The strategic acquisition of Cesium in 2024 broadened BSY's platform ecosystem for geospatial digital twin developments, enhancing capabilities and offerings.
ARR and Free Cash Flow Improvement
ARR grew 12% year-over-year, with a net revenue retention rate at a high watermark of 110%. Free cash flow, net of stock-based compensation, has compounded at an annual growth rate of 18.5%.
Organizational Changes to Accelerate Innovation
New COO and structural reorganization to streamline product development and boost innovation, particularly in AI and asset analytics.
Global Demand Environment
Strong demand across most sectors and geographies, with significant growth drivers in public works utilities and robust infrastructure spending globally.
Lowlights
Challenges in China
ARR in China has declined substantially due to soft economic conditions and a shift in preferences for local software. China now represents less than 2.5% of total ARR.
Impact of Macroeconomic Factors
Continued softness in new mine investments and uncertainties about federal spending in the U.S. could potentially impact future growth.
Service Revenue Decline
Service revenues declined 21% for the quarter and 18% for the year, primarily due to reduced work within digital integrator cohesive.
Company Guidance
In the call, BSY provided a comprehensive overview of its financial accomplishments and strategic positioning. For fiscal year 2024, subscriptions comprised 90% of total revenue, indicating enhanced revenue visibility and consistency. The company achieved a 16.3% compound annual growth rate (CAGR) in constant currency subscription revenues and ARR, demonstrating robust growth. Notably, BSY's adjusted operating income, inclusive of stock-based compensation, grew by 20.4% CAGR, translating efficiently into free cash flow with a CAGR of 18.5%. Looking ahead, BSY forecasts a consistent outlook for 2025, targeting low double-digit ARR growth and a 100 basis point margin expansion. The company aims to double its subscription revenues and ARR from 2020 levels, with strong free cash flow generation of $450 million to $455 million. Despite challenges in China, BSY remains optimistic about its global demand environment, driven by infrastructure investments, AI initiatives, and strategic acquisitions like Cesium.Bentley Systems Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Bentley Systems Appoints New COO and Restructures Leadership
Positive
Jan 13, 2025
Bentley Systems has appointed James Lee as Chief Operating Officer effective January 13, 2025. Lee, with previous experience at Google and SAP, will enhance Bentley’s operational excellence and oversee growth initiatives, including Bentley Asset Analytics. The company is also consolidating product development under Chief Technology Officer Julien Moutte, eliminating the Chief Product Officer role, and positioning itself to leverage AI for infrastructure advancements.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.