Bentley Systems Inc: Form 10-Q for the period ended Jun 30, 2025

The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10‑Q and with our audited consolidated financial statements and notes thereto included in our 2024 Annual Report on Form 10‑K.

All amounts presented in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, except share and per share amounts, are presented in thousands. Additionally, many of the amounts and percentages have been rounded for convenience of presentation. Minor differences in totals and percentage calculations may exist due to rounding.

Overview:

Bentley Systems is the infrastructure engineering software company. Our purpose is to advance the world’s infrastructure for better quality of life. We empower people to design, build, and operate better and more resilient infrastructure through the adoption of our intelligent digital twin solutions. We manage our business globally within one reportable segment, the development and marketing of computer software and related services, which is consistent with how our CODM reviews and manages our business.

Executive Summary:

• Total revenues were $364,106 for the three months ended June 30, 2025, up 10.2% or 9.2% on a constant currency basis(1) compared to the three months ended June 30, 2024. Total revenues were $734,648 for the six months ended June 30, 2025, up 10.0% or 10.1% on a constant currency basis(1) compared to the six months ended June 30, 2024;
• Subscriptions revenues were $333,452 for the three months ended June 30, 2025, up 12.1% or 11.2% on a constant currency basis(1) compared to the three months ended June 30, 2024. Subscriptions revenues were $675,770 for the six months ended June 30, 2025, up 11.8% or 11.9% on a constant currency basis(1) compared to the six months ended June 30, 2024;
• ARR(2) was $1,379,161 as of June 30, 2025, compared to $1,215,910 as of June 30, 2024, representing a constant currency(1) ARR growth rate(2) of 11.5%;
• Last twelve-month recurring revenues dollar-based net retention rate(2) was 109% as of June 30, 2025, compared to 108% as of June 30, 2024;
• Operating income was $84,430 for the three months ended June 30, 2025, compared to $80,177 for the three months ended June 30, 2024. Operating income was $199,614 for the six months ended June 30, 2025, compared to $172,108 for the six months ended June 30, 2024;
• AOI less SBC(1) was $105,223 for the three months ended June 30, 2025, compared to $95,293 for the three months ended June 30, 2024. AOI less SBC(1) was $231,443 for the six months ended June 30, 2025, compared to $207,638 for the six months ended June 30, 2024; and
• Cash flows from operations was $280,500 for the six months ended June 30, 2025, compared to $267,555 for the six months ended June 30, 2024.

(1) Constant currency and AOI less SBC are non‑GAAP financial measures. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definitions and our uses of constant currency and AOI less SBC.

(2) Refer to the “Key Business Metrics” section for additional information, including our definitions and our uses of ARR, ARR growth rate, and recurring revenues dollar-based net retention rate.

Results of Operations:

Our results of operations have been, and in the future will be, affected by changes in foreign currency exchange rates. Other than the natural hedge attributable to matching revenues and expenses in the same currencies, we do not currently hedge foreign currency exposure. Additionally, because we have operations in, and derive revenue from, geographies around the world, we will continue to monitor the impact of tariffs and other trade policies on our business and the businesses of our accounts, as well as on our financial condition, results of operations, and/or cash flows.

We identify the effects of foreign currency on our operations and present constant currency growth rates and fluctuations because we believe exchange rates are an important factor in understanding period‑over‑period comparisons and enhance the understanding of our results and evaluation of our performance. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.

Revenues

Consolidated Revenues

(1) Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.

The increase in total revenues for the three and six months ended June 30, 2025 was primarily driven by an increase in subscriptions revenues, partially offset by a decrease in services revenues.

Subscriptions. For the three and six months ended June 30, 2025, the increase in subscriptions revenues was driven by improvements in our business performance of $36,008 ($33,157 on a constant currency basis) and $71,237 ($72,052 on a constant currency basis), respectively. Our business performance includes the impact from programmatic acquisitions, which generally are immaterial, individually and in the aggregate.

For the three and six months ended June 30, 2025, the improvements in business performance were primarily driven by expansion from accounts with revenues in the same period in the prior year (“existing accounts”), and growth of 3% attributable to new accounts, most notably small- and medium-sized accounts. Improvements in business performance for the three and six months ended June 30, 2025 were led by our engineering applications, followed by geoprofessional applications, and our Bentley Infrastructure Cloud.

Perpetual licenses. For the three months ended June 30, 2025, the decrease in perpetual licenses revenues was driven by a decline in our business performance of $670 ($762 on a constant currency basis). For the six months ended June 30, 2025, the increase in perpetual licenses revenues was driven by improvements in business performance of $610 ($681 on a constant currency basis).

Services. For the three and six months ended June 30, 2025, the decrease in services revenues was driven by a decline in our business performance of $1,569 ($1,894 on a constant currency basis) and $5,299 ($5,334 on a constant currency basis), respectively, driven primarily from weakness within Asset Performance Services.

Revenues by Geographic Region

Revenue from external customers is attributed to individual countries based upon the location of the customer.

(1) Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.

Americas. For the three and six months ended June 30, 2025, the increase in revenues from the Americas was primarily driven by improvements in our business performance of $17,749 ($18,194 on a constant currency basis) and $32,531 ($34,858 on a constant currency basis), respectively.

The improvements in business performance for the three and six months ended June 30, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S. Partially offsetting these improvements, for the six months ended June 30, 2025, was a decline in services revenues.

EMEA. For the three and six months ended June 30, 2025, the increase in revenues from EMEA was primarily driven by improvements in our business performance of $9,549 ($5,926 on a constant currency basis) and $21,840 ($19,402 on a constant currency basis), respectively.

The improvements in business performance for the three months ended June 30, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom, Central Europe, the Middle East, and Africa.

The improvements in business performance for the six months ended June 30, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom, the Middle East, and Africa, partially offset by a decline in services revenues.

APAC. For the three and six months ended June 30, 2025, the increase in revenues from APAC was primarily driven by improvements in our business performance of $6,471 ($6,381 on a constant currency basis) and $12,177 ($13,139 on a constant currency basis), respectively.

The improvements in business performance for the three months ended June 30, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in India, as well as an increase in our subscriptions revenues from new accounts in China, partially offset by declines in our subscriptions revenues from existing accounts in China.

The improvements in business performance for the six months ended June 30, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in India and Australia, as well as increases in our subscriptions and perpetual licenses revenues from new accounts in China, partially offset by declines in our subscriptions revenues from existing accounts in China.

The future results in China remain uncertain as a result of continued geopolitical challenges, the obstacles there to cloud‑deployed software, and the financial timing impact of the preference there for license sales, rather than subscriptions.

Cost of Revenues and Operating Expenses

Cost of Revenues

(1) Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.

Cost of subscriptions and licenses. For the three and six months ended June 30, 2025, on a constant currency basis, cost of subscriptions and licenses expenses increased due to an increase in headcount-related costs of $2,676 and $6,921, respectively, mainly due to an increase in annual and other compensation costs, and higher stock-based compensation expense, partially offset by realignment expenses recognized in the prior year periods related to the 2023 Program, which did not recur in the current year periods. Additionally, for the three and six months ended June 30, 2025, cost of subscriptions and licenses further increased due to an increase in cloud-related costs of $2,917 and $4,455, respectively.

Cost of services. For the three months ended June 30, 2025, on a constant currency basis, cost of services expenses were flat as the increase in annual and other compensation costs was offset by a reduction in third‑party personnel costs.

For the six months ended June 30, 2025, on a constant currency basis, cost of services expenses decreased primarily due to a decrease in headcount‑related costs, mainly due to a reduction in third‑party personnel costs.

Operating Expenses

Percentage changes that are considered not meaningful are denoted with NM.

(1) Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.

Research and development. For the three and six months ended June 30, 2025, on a constant currency basis, research and development expenses increased primarily due to increases in headcount‑related costs of $10,041 and $15,802, respectively, mainly due to increases in headcount, and annual and other compensation costs.

Selling and marketing. For the three and six months ended June 30, 2025, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount‑related costs $9,145 and $17,074, respectively, mainly due to increases in headcount, and annual and other compensation costs, and an increase in promotional costs of $1,987 and $2,609, respectively.

General and administrative. For the three months ended June 30, 2025, on a constant currency basis, general and administrative expenses decreased primarily due to a decrease in headcount‑related costs of $5,185, mainly due to lower incentive compensation expense related to the reduction in Gregory S. Bentley’s fractional interest under the Bonus Plan as part of Mr. Bentley’s transition to the role of Executive Chair effective July 1, 2024. Additionally, during the three months ended June 30, 2024, we recognized approximately $2,200 of other corporate initiatives expenses, which did not recur in the current year period. Partially offsetting these decreases were higher charitable contributions focusing on education and sustainability of $2,037.

For the six months ended June 30, 2025, on a constant currency basis, general and administrative expenses decreased primarily due to a decrease in headcount‑related costs of $5,748, mainly due to lower incentive compensation expense related to the change in the Bonus Plan described above, partially offset by increases in headcount, and annual and other compensation costs. Additionally, during the six months ended June 30, 2024, we recognized approximately $2,200 of other corporate initiatives expenses, which did not recur in the current year period. Partially offsetting these decreases were higher costs associated with our internal-use software implementations as compared to the same period in the prior year and higher charitable contributions focusing on education and sustainability of $1,981.

Deferred compensation plan. For the three and six months ended June 30, 2025 and 2024, deferred compensation plan expense was attributable to the marked to market impact on deferred compensation plan liability balances period over period.

Amortization of purchased intangibles. For the three and six months ended June 30, 2025, on a constant currency basis, amortization of purchased intangibles decreased primarily due to lower acquisition activity as compared to prior periods.

Interest Expense, Net

For the three and six months ended June 30, 2025, interest expense, net decreased primarily due to lower weighted average debt outstanding under the credit facilities as compared to the same periods in the prior year.

Other (Expense) Income, Net

(1) Foreign exchange gain (loss) is primarily attributable to foreign currency translation derived mainly from U.S. dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries.

Provision for Income Taxes

For the three months ended June 30, 2025, the effective tax rate was higher compared to the same period in the prior year primarily due to the impact of a decrease in discrete tax benefits recognized, partially offset by the decrease in forecasted effective tax rate impact of U.S. international tax provisions. For the three months ended June 30, 2025 and 2024, we recorded discrete tax benefits of $8,114 and $18,543, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.

For the six months ended June 30, 2025, the effective tax rate was lower as compared to the same period in the prior year primarily due to the impact of the decrease in forecasted effective tax rate impact of U.S. international tax provisions, partially offset by a decrease in discrete tax benefits recognized. For the six months ended June 30, 2025 and 2024, we recorded discrete tax benefits of $13,187 and $20,681, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates. Based on our preliminary impact assessment, we believe the OBBBA will have a favorable impact on our cash paid for income taxes in 2025, primarily attributable to the change in restoring immediate U.S. tax deductions for domestic research and development expenses. We are still evaluating the full impact of the OBBBA on our consolidated financial statements.

Key Business Metrics:

In addition to our results of operations discussed above, we believe the following presentation of key business metrics provides additional useful information to investors regarding our results of operations. To the extent material, we disclose below the additional purposes, if any, for which our management uses these key business metrics. Our key business metrics may vary significantly from period to period for reasons unrelated to our operating performance and may differ from similarly titled measures presented by other companies.

(1) Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.

Recurring Revenues

Recurring revenues are the basis for our other revenue-related key business metrics. We believe this measure is useful in evaluating our ability to consistently retain and grow our revenues within our existing accounts.

Recurring revenues are subscriptions revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and professional services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions.

ARR

ARR is a key business metric that we believe is useful in evaluating the scale and growth of our business as well as to assist in the evaluation of underlying trends in our business. Furthermore, we believe ARR, considered in connection with our last twelve‑month recurring revenues dollar‑based net retention rate, is a leading indicator of revenue growth.

ARR is defined as the sum of the annualized value of our portfolio of contracts that produce recurring revenues as of the last day of the reporting period, and the annualized value of the last three months of recognized revenues for our contractually recurring consumption‑based software subscriptions with consumption measurement durations of less than one year, calculated using the spot foreign currency exchange rates. We believe that the last three months of recognized revenues, on an annualized basis, for our recurring software subscriptions with consumption measurement period durations of less than one year is a reasonable estimate of the annual revenues, given our consistently high retention rate and stability of usage under such subscriptions.

ARR resulting from the annualization of recurring contracts with consumption measurement durations of less than one year, as a percentage of total ARR, was 51% and 49% as of June 30, 2025 and 2024, respectively, with our E365 subscription offering representing 45% and 43% of total ARR as of June 30, 2025 and 2024, respectively.

Constant currency ARR growth rate is the growth rate of ARR measured on a constant currency basis. In reporting period‑over‑period ARR growth rates in constant currency, we calculate constant currency growth rates by translating current and prior period ARR on a transactional basis to our reporting currency using current year budget exchange rates. We believe that ARR growth is an important metric indicating the scale and growth of our business.

Last Twelve‑Months Recurring Revenues

Last twelve‑month recurring revenues is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues. We believe that we will continue to experience favorable growth in recurring revenues primarily due to our strong account retention and recurring revenues dollar‑based net retention rates, as well as the addition of new accounts with recurring revenues.

Last twelve‑months recurring revenues is calculated as recurring revenues recognized over the preceding twelve‑month period.

The last twelve‑months recurring revenues for the periods ended June 30, 2025 compared to the last twelve‑months of the comparative twelve‑month period increased by $146,161. This increase was primarily due to growth in ARR, which is primarily the result of growing our recurring revenues within our existing accounts as expressed in our recurring revenues dollar‑based net retention rate, as well as additional recurring revenues resulting from new accounts and acquisitions. For the twelve months ended June 30, 2025 and 2024, 92% and 90%, respectively, of our revenues were recurring revenues.

Account Retention Rate

Account retention rate is a key business metric that we believe is useful in evaluating the long‑term value of our account relationships and our ability to retain our account base. We believe that our consistent and high account retention rates illustrate our ability to retain and cultivate long‑term relationships with our accounts.

Account retention rate for any given twelve-month period is calculated using the average foreign currency exchange rates for the prior period, as follows: the prior period recurring revenues from all accounts with recurring revenues in the current and prior period, divided by total recurring revenues from all accounts during the prior period.

Recurring Revenues Dollar‑Based Net Retention Rate

Recurring revenues dollar‑based net retention rate is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues.

Recurring revenues dollar‑based net retention rate is calculated, using the average exchange rates for the prior period, as follows: the recurring revenues for the current period, including any growth or reductions from existing accounts, but excluding recurring revenues from any new accounts added during the current period, divided by the total recurring revenues from all accounts during the prior period. A period is defined as any trailing twelve months. Related to our platform acquisitions, recurring revenues into new accounts will be captured as existing accounts starting with the second anniversary of the acquisition when such data conforms to the calculation methodology. This may cause variability in the comparison.

Given that recurring revenues represented 92% and 90% of our total revenues for the twelve months ended June 30, 2025 and 2024, respectively, this metric helps explain our revenue performance as primarily growth from existing accounts.

Non-GAAP Financial Measures:

In addition to our results determined in accordance with GAAP discussed above, we believe the following presentation of financial measures not in accordance with GAAP provides useful information to investors regarding our results of operations. To the extent material, we disclose below the additional purposes, if any, for which our management uses these non‑GAAP financial measures and provide reconciliations between these non‑GAAP financial measures and their most directly comparable GAAP financial measures. Non‑GAAP financial information should be considered in addition to, not as a substitute for, or in isolation from, the financial information prepared in accordance with GAAP, including operating income, or other measures of performance. Our non‑GAAP financial measures may vary significantly from period to period for reasons unrelated to our operating performance and may differ from similarly titled measures presented by other companies.

Adjusted Operating Income Less Stock-Based Compensation Expense (“AOI less SBC”)

AOI less SBC is a non-GAAP financial measure and is used to measure the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business.

AOI less SBC is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, and realignment expenses (income), for the respective periods.

AOI less SBC is our primary performance measure, which excludes certain expenses and charges, including the non-cash amortization expense resulting from the acquisition of intangible assets, as we believe these may not be indicative of our core business operating results. We intentionally include stock-based compensation expense in this measure as we believe it better captures the economic costs of our business.

Management uses this non-GAAP financial measure to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and in our comparison of our financial results to those of other companies. It is also a significant performance measure in certain of our executive incentive compensation programs.

Adjusted Operating Income (“AOI”)

Adjusted operating income is a non-GAAP financial measure that we believe is useful to investors in making comparisons to other companies, although this measure may not be directly comparable to similar measures used by other companies.

Adjusted operating income is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), and stock‑based compensation expense, for the respective periods.

Reconciliation of operating income to AOI less SBC and to Adjusted operating income:

Further explanation of certain of our adjustments in arriving at AOI less SBC and Adjusted operating income are as follows:

(1) Amortization of purchased intangibles. Amortization of purchased intangibles varies in amount and frequency and is significantly impacted by the timing and size of our acquisitions. Management finds it useful to exclude these non‑cash charges from our operating expenses to assist in budgeting, planning, and forecasting future periods. The use of intangible assets contributed to our revenues earned during the periods presented and will also contribute to our revenues in future periods. Amortization of purchased intangible assets will recur in future periods.

(2) Deferred compensation plan. We exclude Deferred compensation plan expense (income) when we evaluate our continuing operational performance because it is not reflective of our ongoing business and results of operation. We believe it is useful for investors to understand the effects of this item on our total operating expenses. Deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to Deferred compensation plan in the consolidated statements of operations.

(3) Acquisition expenses. We incur expenses for professional services rendered in connection with business combinations, which are included in our GAAP presentation of general and administrative expense. Also included in our acquisition expenses are retention incentives paid to executives of the acquired companies. We exclude these acquisition expenses when we evaluate our continuing operational performance as we would not have otherwise incurred these expenses in the periods presented as part of our continuing operations.

(4) Realignment expenses. We exclude these charges and subsequent adjustments to our estimates when we evaluate our continuing operational performance because they are not reflective of our ongoing business and results of operations. We believe it is useful for investors to understand the effects of these items on our total operating expenses. For the three and six months ended June 30, 2024, Realignment expenses were primarily associated with the 2023 Program.

(5) Stock‑based compensation expense. We exclude non-cash stock‑based compensation expenses from certain of our non‑GAAP measures because we believe this is useful to investors in making comparisons to other companies.

Constant Currency

Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated effects of foreign currency exchange rate fluctuations. A significant amount of our operations is conducted in foreign currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance.

In reporting period‑over‑period results, except for ARR as discussed above in “Key Business Metrics” section, we calculate the effects of foreign currency fluctuations and constant currency information by translating current and prior period results on a transactional basis to our reporting currency using prior period average foreign currency exchange rates in which the transactions occurred.

Reconciliation of consolidated revenues to consolidated revenues in constant currency:

Reconciliation of revenues by geographic region to revenues by geographic region in constant currency:

41

Reconciliation of cost of revenues to cost of revenues in constant currency:

Reconciliation of operating expenses to operating expenses in constant currency:

42

Liquidity and Capital Resources:

Cash and Cash Equivalents

Our primary source of operating cash is from the sale of our subscriptions, perpetual licenses, and services. Our primary use of cash is payment of our operating costs, which consist mainly of headcount‑related costs. In addition to operating expenses, we also use cash to service our debt obligations, to pay quarterly dividends, to repurchase our Class B common stock and convertible debt, and for capital expenditures in support of our operations. We also use cash to fund our acquisitions of software assets and businesses, and other investment activities.

We believe that cash generated from operations, together with existing cash and cash equivalent balances, and external borrowings including available liquidity under the Credit Facility, will be sufficient to meet our domestic and international working capital and capital expenditure requirements. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure that we have the proper liquidity available in the locations in which it is needed and to fund our operations and growth investments with cash that has not been permanently reinvested outside the U.S. Our future capital requirements may be materially different than those currently planned in our budgeting and forecasting activities and depend on many factors, including our strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses, our rate of revenue growth, the timing and extent of spending on research and development, the expansion of our sales and marketing activities, the timing of new product introductions, market acceptance of our products, competitive factors, our discretionary payments of dividends or repurchases of our Class B common stock and convertible debt, funding of our purchase commitments, currency fluctuations, and overall economic conditions, globally. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders, while the incurrence of additional debt financing, including convertible debt, would result in additional debt service obligations. Such debt instruments also could introduce new or modified covenants that might restrict our operations and/or our ability to pay dividends, consummate acquisitions, or otherwise pursue our business strategies. We cannot provide assurance that we could obtain additional financing on favorable terms or at all.

Cash Flows Activity

Operating Activities

For the six months ended June 30, 2025, compared to the same period in the prior year, net cash provided by operating activities was higher by $12,945 due to an increase in net income of $19,482, partially offset by a net decrease in non‑cash adjustments of $3,935 and a decrease in net cash flows from the change in operating assets and liabilities of $2,602. The decrease in net cash flows from the change in operating assets and liabilities period over period was primarily due to lower period over period Cloud Services Subscription deposits, and accruals and other liabilities. Offsetting these decreases were increases primarily due to timing of collections on our receivables, the overall timing of payments for income taxes and for software maintenance contracts, as well as lower capitalized internal‑use software implementation costs compared to the same period in the prior year.

Investing Activities

Net cash used in investing activities was lower by $3,811 for the six months ended June 30, 2025, compared to the same period in the prior year, primarily due to lower acquisition related payments of $5,000.

Financing Activities

Net cash used in financing activities was lower by $13,490 for the six months ended June 30, 2025, compared to the same period in the prior year, primarily due to lower net paydowns of the credit facilities of $61,713, partially offset by higher payments for shares acquired of $27,661, including shares repurchased under the Repurchase Program, higher dividend payments of $6,642, primarily due to an increase in our quarterly dividend per share to $0.07 in 2025 from $0.06 in 2024, and lower proceeds from the exercise of stock options of $4,007. Additionally, we paid $9,797 in cash to repurchase $10,000 aggregate principal amount of our outstanding 2026 Notes during the first quarter of 2025.

Long-Term Debt

As of June 30, 2025, we had $1,299,850 available under the Credit Facility, and we were in compliance with all covenants under the Credit Facility, the 2026 Notes, and the 2027 Notes. Any failure to comply with such covenants under the Credit Facility would prevent us from being able to borrow additional funds under the Credit Facility, and, as with any failure to comply with such covenants under the 2026 Notes and the 2027 Notes, could constitute a default that may cause all amounts outstanding to become due and immediately payable in full.

Unless converted, upon maturity in January 2026, we will be required to repay the outstanding principal amount on the 2026 Notes, which, as of June 30, 2025, was $677,830. As of June 30, 2025, the 2026 Notes were classified as long‑term in the consolidated balance sheets as we currently have the ability and intent to refinance them on a long‑term basis through available capacity under the Credit Facility.

Stock Repurchases

BSY Stock Repurchase Program

Our Board of Directors approved the Repurchase Program authorizing us to repurchase up to $200,000 of our Class B common stock and/or outstanding convertible senior notes through June 30, 2026. We may use available working capital, cash provided by operating activities, and/or external borrowings including available liquidity under our Credit Facility to make repurchases.

During the six months ended June 30, 2025, we repurchased 1,173,041 shares for $50,023, and $10,000 aggregate principal amount of our outstanding 2026 Notes for $9,797 under the Repurchase Program. During the six months ended June 30, 2024, we repurchased 729,681 shares for $37,515 under the Repurchase Program.

The timing, as well as the number and value of shares and/or outstanding convertible senior notes repurchased under the Repurchase Program, will be determined at our discretion and will depend on a variety of factors, including our assessment of the intrinsic value of our shares, the market price of our Class B common stock and outstanding convertible senior notes, general market and economic conditions, available liquidity, compliance with our debt and other agreements, and applicable legal requirements.

Withholding Taxes on Certain Equity Awards

We have the right to require that certain equity awardees receive gross or net quantities of shares of our Class B common stock, including distributions from the DCP and share issuances under our Bonus Plan. In the case of a gross issuance or distribution, an awardee is required to reimburse promptly to us the cash required for his or her tax withholding amounts. Conversely, under a net issuance or distribution, shares are withheld in consideration of remitting withholding taxes on behalf of an equity awardee, thereby requiring us to remit cash for the tax withholdings. We exercised our right to require that impacted equity awardees receive gross quantities of our Class B common stock during the first quarter of 2025, but we allowed impacted awardees the option to receive net quantities of shares of our Class B common stock during the second quarter of 2025. During the six months ended June 30, 2024, we exercised our right to require that impacted equity awardees receive gross quantities of our Class B common stock. We will continue to evaluate whether share awards will be required to be received by awardees on a gross basis, or if net settlement may be elected by awardees.

Dividend Payments

The declaration and payment of dividends is within the discretion of our Board of Directors. We paid quarterly dividends of $0.07 per share of common stock during the six months ended June 30, 2025 and $0.06 per share of common stock during the six months ended June 30, 2024. While we intend to continue paying quarterly dividends, any future determination will be subject to the discretion of our Board of Directors and will be dependent on a number of factors, including our results of operations, capital requirements, restrictions under Delaware law, and overall financial condition, as well as any other factors our Board of Directors considers relevant. In addition, the terms of the agreement governing the Credit Facility limit the amount of dividends we can pay.

There have been no material changes in our market risk exposure as described in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2024 Annual Report on Form 10‑K.

Evaluation of Effectiveness of Disclosure Controls and Procedures

Our management maintains disclosure controls and procedures as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Bentley Systems, Incorporated have been detected.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a or 15d of the Exchange Act that occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our 2024 Annual Report on Form 10‑K.