EXTON, PA — Bentley Systems, Incorporated (Nasdaq: BSY) posted a 12.8% increase in second-quarter revenue as subscription sales and recurring revenue expanded, though operating margins narrowed from a year earlier as the infrastructure engineering software company continued investing in its technology platform.
Revenue rose to $410.7 million for the quarter ended June 30, 2026, from a year earlier, while revenue growth was 12.2% on a constant-currency basis. Subscription revenue increased 13.6% to $378.6 million, or 13% at constant currency.
Annualized recurring revenue reached $1.536 billion at quarter-end, up from $1.379 billion a year earlier. Constant-currency ARR growth was 12%, while the company’s trailing 12-month dollar-based net retention rate held at 109%.
Profitability declined despite the revenue gains. Bentley’s operating margin fell to 21.6% from 23.2% in the year-earlier quarter, while its adjusted operating income less operating stock-based compensation margin declined to 28.3% from 29.3%.
Diluted earnings rose to $0.25 per share from $0.22. Adjusted earnings increased to $0.35 per diluted share from $0.32.
Operating cash flow increased to $71.5 million from $61.1 million, while free cash flow rose to $63.8 million from $57 million.
Chief Executive Officer Nicholas Cumins attributed the quarter’s growth primarily to Bentley’s Resources business, followed by Public Works and Utilities, including demand associated with the electric grid.
Bentley is also expanding the use of artificial intelligence within its engineering software, allowing customers to combine the company’s modeling, analysis and simulation applications with AI assistants.
Cumins said customers have begun applying those capabilities to active projects, creating opportunities that Bentley “intend[s] to monetize in due course.”
For the first six months of 2026, Bentley generated $834.9 million in revenue, up 13.6% from the prior-year period and 12.1% on a constant-currency basis. Subscription revenue climbed 14.1% to $771.1 million.
First-half diluted EPS increased to $0.55 from $0.50, while adjusted EPS rose to $0.73 from $0.67.
Margins also contracted over the six-month period. Operating margin declined to 25.7% from 27.2%, while the company’s adjusted operating income less operating stock-based compensation margin decreased to 30.8% from 32%.
Cash generation weakened on a year-to-date basis despite the second-quarter improvement. Operating cash flow totaled $264.9 million for the first half, down from $280.5 million, while free cash flow declined to $251.7 million from $273.4 million.
Chief Financial Officer Werner Andre said Bentley’s second-quarter results kept the company within its full-year financial outlook. The company also put new enterprise-wide finance and quote-to-cash platforms into operation during the quarter, absorbing the related costs within its existing margin expectations.
Bentley ended the quarter with net debt leverage of 1.9 times. Andre said the company’s balance sheet and credit capacity give it flexibility for acquisitions as well as dividends and share repurchases, even after increased repurchase activity during the first half.
The company is also positioning its capital structure ahead of convertible notes that mature in mid-2027.
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