Steady infrastructure software, with AI upside arriving later
- Recurring subscriptions made up 92 percent of revenue for the second quarter of 2026.
- Second quarter 2026 annualized recurring revenue grew 12 percent in constant currency.
- Power Line Systems is growing quickly to support grid modernization and data center power needs.
- The services segment slowed to 9.4 percent growth, raising questions on full year targets.
- Management expects artificial intelligence API consumption revenue to begin in 2027.
Strong core, patient upside
Bentley provides software tied to a real world need: more infrastructure work than engineers can easily handle. Customers use its tools to design and manage assets like roads, bridges, plants, mines, and utilities. The bull case is simple. Most revenue repeats, customers tend to stay and spend more, and Q2 2026 annualized recurring revenue grew 12 percent in constant currency with net revenue retention at 109 percent.
The best growth stories inside the company are specific. Power Line Systems is benefiting from grid modernization and data center electrification. Seequent is doing well in geoprofessional software, helped by mining and critical minerals demand.
The harder part is timing and execution. Artificial intelligence and API based usage could become valuable new revenue pools, but management says monetization starts in 2027. Services growth also slowed sequentially to 9.4 percent in the second quarter, raising questions about meeting its full year target. This is a quality compounder story, but the price must make sense.
Subscriptions fund the machine
Bentley makes most of its money from subscriptions. In Q2 2026, recurring subscription revenues made up 92 percent of total revenue. That gives the company more visibility than a software seller that has to close large one time license deals each quarter.
The company also sells some perpetual licenses and services. Perpetual licenses are a shrinking piece of the mix. Services growth slowed to 9.4 percent in Q2 2026, down from 29.9 percent in the first quarter, leaving a question mark on the 15 percent to 20 percent full year target.
Bentley is shifting more customers toward Enterprise 365, a consumption model where customers pay based on use. Much of this revenue has multi year negotiated floors and ceilings. Customers can use more software, but the bill has agreed guardrails. That can make growth smoother than pure usage based models.
The long term swing factor is API consumption. Bentley is building an open ecosystem to interface with third party large language models. APIs let a customer plug Bentley tools into its own workflows. If that becomes common, usage could grow beyond the old seat based model.
Tools for infrastructure work
Bentley Open Applications
These are core design and engineering applications used by infrastructure teams. They are a primary driver of subscription growth.
Seequent
Seequent serves geoprofessional work, including subsurface data and mining. It is a standout performer helped by demand for critical minerals.
Power Line Systems
Power Line Systems supports electric grid infrastructure and has grown significantly overseas, driven by grid modernization and data center power needs.
Bentley Infrastructure Cloud
This cloud platform helps teams manage engineering data and digital twins, which are live digital models of physical assets.
Virtuoso
Virtuoso targets small and medium-sized businesses with easier buying and onboarding. It helps drive new account acquisition.
Bentley Asset Analytics
Asset Analytics uses artificial intelligence to inspect and assess infrastructure condition. The business reached a $50 million run rate in 2025.
One segment, three revenue streams
Bentley reports one business segment, software and related services, but discloses revenue by type. The mix below is an estimate based on Q2 2026 recurring revenue data.
What could go wrong
Subscription growth slows
High impact · Medium oddsThe main thesis depends on customers renewing and expanding. Q2 2026 net revenue retention was 109 percent, which means existing customers spent more than the prior year after churn. If that slips, the recurring revenue story weakens quickly.
Services rebound fades
Medium impact · Medium oddsServices grew 29.9 percent in Q1 2026 but slowed to 9.4 percent in Q2 2026. The risk is that the first quarter was a short burst rather than a lasting turnaround.
AI revenue arrives late
Medium impact · Medium oddsBentley has a clear plan for artificial intelligence, especially around automated design workflows and API consumption starting in 2027. If customers like the features but do not pay much more, the upside takes longer to show up.
China stays difficult
Low impact · Medium oddsChina is a smaller exposure now, about 2 percent of ARR, but it remains a real friction point. Management has cited geopolitical challenges and obstacles to cloud-deployed software.
AI mistakes create liability
Medium impact · Low oddsBentley names artificial intelligence as a risk in its filings. If AI tools produce bad outputs, misuse customer data, or create legal questions, the company could face reputational harm.
In one breath
What does Bentley Systems actually do?
Bentley makes software for infrastructure engineering. Its tools help design, build, and monitor assets like roads, bridges, utilities, mines, and industrial sites.
Why is recurring revenue important for BSY?
Recurring revenue makes the business more predictable because customers pay again each year or through usage-based contracts. In Q2 2026, recurring subscriptions were 92 percent of total revenue.
Is AI already a big profit driver for Bentley?
Not yet. Asset Analytics has reached a $50 million revenue run rate, but management plans to start broader AI API monetization in 2027.
What metric matters most for Bentley?
Annualized recurring revenue growth is the cleanest health check because it shows the yearly run rate. Net revenue retention is also important because it shows whether existing customers are spending more over time.
