Bentley Systems (BSY) Stock Forecast & Price Target

Bentley Systems' financial performance in Q3 highlights robust subscription revenue growth, with reported figures of $344.3 million, reflecting a year-over-year increase of 14%, signaling strong global infrastructure activity and adoption of engineering tools. The company's Annual Recurring Revenue (ARR) reached $1,405 million, which translates to a 10.5% year-over-year growth in constant currency, underlining stable demand in key markets, particularly the United States. Additionally, Bentley's improved EBITDA margins, rising to 27.7% from 26.7% the previous year, demonstrate effective cost management and operational efficiencies amid expanding revenue.

The analysis indicates that Bentley Systems is experiencing stagnation in its services revenue, which showed no growth quarter-over-quarter, resulting in a downward revision of annual guidance by $5 million, primarily due to ongoing challenges with IBM Maximo-related work. Furthermore, while total revenues exceeded expectations, the performance of perpetual licenses fell short of forecasts, reflecting potential weaknesses in demand for certain product offerings. Lastly, despite strong EBITDA margins, the overall outlook remains cautious as market headwinds and lower estimates over a five-year horizon contribute to an increasingly negative perspective on the company's growth potential.