Bentley Systems Raises 2026 ARR Outlook as Q3 Revenue Rises 12%

Bentley Systems (Nasdaq: BSY) raised its 2026 annualized recurring revenue growth outlook after third-quarter ARR increased 13% year over year in constant currency, while the infrastructure software provider maintained its profit and free cash flow forecasts despite divesting Cohesive.

The company now expects full-year ARR growth excluding Cohesive of 12.5% to 13.5%, up from 10.5% to 12.5%. Its reported ARR growth forecast was revised to 11.5% to 12.5% from 10.5% to 12.5%, reflecting an approximately 100-basis-point impact from the divestiture. Bentley attributed the higher midpoint of the ex-Cohesive range to organic momentum and acquisitions.

Total revenue for the quarter ended September 30 rose 12.2% to $421.5 million, or 12.7% in constant currency. Subscription revenue, the company’s largest revenue source, increased 12.4% to $386.8 million and rose 12.9% in constant currency.

For the first nine months of 2026, revenue advanced 13.2% to $1.26 billion, while subscription revenue increased 13.5% to $1.16 billion. On a constant-currency basis, the increases were 12.3% and 12.7%, respectively.

ARR reached $1.58 billion at September 30 spot exchange rates. Last-12-month recurring revenue increased 13.2% to $1.53 billion, or 12% in constant currency. Dollar-based net retention was 110%, while dollar-weighted account retention was 99%, indicating continued expansion within existing customer relationships alongside high account retention.

Profitability Strengthens

GAAP operating income rose 45% to $122.6 million in the third quarter. Adjusted operating income less operating stock-based compensation increased 28% to $135.5 million, and the corresponding margin expanded to 32.1% from 28.1% a year earlier.

For the first nine months, GAAP operating income increased 19% to $337.5 million. Adjusted operating income less operating stock-based compensation rose 15% to $392.4 million, with the margin reaching 31.2% compared with 30.7% in the prior-year period.

Third-quarter operating cash flow declined 6% to $109.4 million, while free cash flow fell 8% to $101.4 million. On a last-12-month basis, however, operating cash flow increased 8% to $515.9 million and free cash flow rose 6% to $489.3 million.

Resources and Asia-Pacific Lead Growth

Bentley said Resources remained its fastest-growing infrastructure sector. Geographically, growth was led by Asia-Pacific and the Americas.

In Asia-Pacific, the company cited activity across Public Works and Utilities and Resources, with India benefiting from domestic water and electricity-grid investments as well as project delivery for global engineering firms. Strength in Australia, New Zealand and Southeast Asia more than offset continued headwinds in China, which accounts for less than 2% of ARR.

Demand in the Americas included transportation, grid and water projects in the U.S., with the company also pointing to infrastructure requirements related to AI data centers. Latin American growth was led by mining and water infrastructure. Bentley described activity in Continental Europe and the U.K. as steady, while the Middle East recorded strong consumption associated with airport and transportation programs in the United Arab Emirates and Saudi Arabia.

Bentley is also expanding Seequent’s subsurface modeling portfolio through the acquisition of Eliis, whose PaleoScan software supports seismic interpretation. The presentation identified mining, civil engineering, oil and gas, and new energy as relevant markets for the expanded offering.

Cohesive Divestiture Reshapes Revenue Outlook

Bentley completed the divestiture of Cohesive to Naviam on October 13. The company became a significant minority investor in Naviam, an IBM Maximo services and solutions provider, and said the business will add Bentley Infrastructure Cloud and iTwin technology to its Maximo offerings.

Cohesive generated approximately $35 million of services revenue and $10 million of subscription revenue during the first nine months of 2026. Following the transaction, Bentley reduced its full-year revenue forecast by about $12 million to a range of $1.67 billion to $1.70 billion. Its constant-currency services revenue outlook changed from growth of 15% to 20% to approximately flat, while the subscription growth forecast remained 11% to 13% and was described as trending toward the high end.

The company maintained its forecast for adjusted operating income less operating stock-based compensation of $495 million to $510 million. It also retained its $500 million to $570 million free cash flow outlook, including higher expected cash taxes. Cash taxes are now projected at $55 million to $60 million, up from $45 million to $50 million, driven by the Cohesive divestiture.

Bentley expects about 319 million diluted shares for the year, below its previous range of 320.8 million to 322.4 million because of higher share repurchases. Through the third quarter, the company had allocated $168 million to share repurchases and $64 million to dividends. Net debt leverage, including convertible notes, stood at 1.7 times, and available revolving credit capacity was $1.26 billion.

Management continues to position AI-enabled asset analytics and Bentley Infrastructure Cloud as ways to extend the company’s presence from infrastructure project delivery into asset operations. The presentation noted, however, that execution remains subject to global economic and political conditions, tariffs and sanctions, changing interest rates and capital-market access, competition, product quality, acquisition integration, personnel retention, and the evolving impact of artificial intelligence on Bentley and the industries it serves.