Bentley Systems (BSY) Stock Forecast & Price Target

Bentley Systems demonstrated robust financial performance in Q3, reporting subscription revenue of $344.3 million, marking a 14% year-over-year increase, which reflects ongoing healthy infrastructure project activity globally and an increasing adoption of engineering tools. The company achieved an annual recurring revenue (ARR) of $1,405 million, exhibiting a 10.5% year-over-year growth in constant currency, supported by strong demand in its core U.S. market and ongoing customer engagement with its E365 subscription program. Additionally, Bentley's overall revenue grew to $375.5 million for the quarter, surpassing estimates, while EBITDA margins improved to 27.7%, highlighting enhanced operational efficiency alongside substantial dollar growth.

The analysis indicates a negative outlook for Bentley Systems due to flat quarterly services revenue, which fell short by $5 million compared to prior guidance, largely impacted by challenges related to IBM Maximo work. Furthermore, the company's revenue guidance has been adjusted downwards, highlighting concerning trends in perpetual licenses, which are also underperforming against expectations. Despite a slight increase in total revenue and EBITDA margins exceeding consensus estimates, the persistent issues in its core services segment and reduced projections for future growth raise significant concerns about the company’s financial stability and trajectory.