Bentley Systems (BSY) Stock Forecast & Price Target

Bentley Systems reported an annual recurring revenue (ARR) of $1,379 million, reflecting an 11.5% year-over-year growth in constant currency, which exceeded consensus expectations. The company also demonstrated strong performance in its Q2 subscription revenue, achieving $333.5 million, a 12.1% increase year-over-year, and surpassing estimates amid challenging macroeconomic conditions. The firm’s ongoing adoption of its E365 subscription program, contributing approximately 45% of total ARR, and robust demand across key markets, including public works and utilities, underpin a positive financial outlook.

Bentley Systems's financial outlook is negatively impacted by several key risks, including macroeconomic fluctuations, intense technical competition from larger vendors, and potential pricing pressures due to bundling strategies employed by these competitors. The company's heavy reliance on the public works and utilities sector, which constitutes about two-thirds of its revenue, heightens its vulnerability to market volatility and demand changes in this end market. Furthermore, integration risks associated with mergers and acquisitions, along with possible alterations in sales strategies and long-term margin targets, further contribute to financial uncertainty.