Bentley Systems, Incorporated

Good morning, and thank you for joining Bentley Systems Q3 2025 results. I'm Eric Boyer, Bentley's Investor Relations Officer. On the webcast today, we have Bentley Systems Executive Chair Greg Bentley, Chief Executive Officer Nicholas Cummins, and Chief Financial Officer Werner Andre. This webcast includes forward-looking statements made as of November 5th, 2025, regarding the future results of operations and financial position, business strategy and plans, and objectives for future operations of Bentley Systems Incorporated. All such statements made in or contained during this webcast, other than statements of historical fact, are forward-looking statements. This webcast will be available for replay on Bentley Systems' investor relations website at investors.bentley.com on November 5th, 2025. After a presentation, we will conclude with Q&A. With that, let me introduce the Executive Chair of Bentley Systems, Greg Bentley.

Good morning, as the case may be, and thanks for your interest and attention. I'm pleased to say that all quantitative metrics for 2025 Q3 are quite in accord with our expected progress and outlook range for the year. But this quarter, Nicholas will highlight the significant product announcements and developments presented and observed at our Year in Infrastructure 2025 conference last month, which I think also merit your firsthand review at the links here. Now, I always look forward to discovering through submissions for the annual Going Digital Awards the unanticipated ways by which our users are ever creatively applying software and cloud services. This year, I was pleasantly surprised by the plurality of those citing contributions from AI. So upon observing this AI forward propensity at the level of projects and users, I reviewed with interest this year's AEC advisors survey of engineering firms participating in their annual CEO conference. You may recall that I previously reviewed two earlier such conferences where Bentley Systems helped with gauging progress and appetites in going digital. The surveyed firms together perform most of the contracted infrastructure engineering outside Asia, with the distribution of their revenues by sector rated, like ours, in favor of public works slash utilities and resources. And within general building, corresponding to what we classify as the commercial facilities sector, the survey highlights a dramatic and interesting transition. AEC firms are now literally engineering the infrastructure for AI. that spending for construction of data centers, such as the project by digital construction leader DPR, which served as the example throughout our Year in Infrastructure keynote presentations, ramps to soon overtake spending on office spaces. AEC Advisor shows that digital investment as an internal priority is also succeeding for engineering firms. For the last five years, they, in aggregate, have achieved continually increased profit margins at the same time as also higher growth in organic net revenues, the latter perhaps limited by capacity constraints as separately reported backlogs reached record levels. Underscoring market robustness, this organic revenue growth is still increasing, including through 2025 estimates and net of both annual U.S. inflation in red and in blue U.S. GDP growth. AEC Advisors concludes that this growth in aggregate profit margin must be attributable to improvements in direct labor productivity and as the total revenue percentage of other costs to support functions has risen continuously by almost 20%. This is despite real estate costs having declined since pre-pandemic by 25%, presumably owing to virtual and hybrid working enabled by our project-wise and other cloud services technologies. And most significantly for us, these firms' overall technology spending as a percentage of revenue will have increased by 40% over the six years through 2025. Combined with their organic revenue growth, their technology spending in dollar terms increased from 2019 through 2024 at a compounded annual growth rate of 13%. tolerably coinciding with the growth rate of Bentley Systems revenues, as I have reviewed in recent quarters, over our five years as a public company. I believe that we have thus effectively enabled AEC firms to keep up with accelerating demand, despite now chronic engineering resource constraints, by constantly improving their labor productivity through going digital. To understand changes now underway in the makeup and magnitude of AEC technology spending, this year we again helped AEC advisors with a supplemental AI survey yielding sufficiently representative responses. In the interest of validating the prevalence of the commendable self-help AI initiatives that relatively surprised us within this year's going digital award submissions, we focused survey questions on AI that these AEC firms are already implementing, not just testing, to support their businesses. Excluding for this immediate purpose more widespread AI implementations for generic business purposes, such as finance, HR, and legal, about a quarter of responses report AI already being implemented around the periphery of applications such as ours to support the infrastructure engineering-oriented functions of design automation, construction planning or monitoring, and or asset performance and maintenance. Asked in what respects competitiveness would be advanced through faster AI adoption, these firms expect superior project delivery and quality, operational efficiency, and clients' experience and satisfaction, but they have the greatest regard for AI's potential enablement of innovation and new services. To get to these benefits, the median reported level of AI implementation spending today, ranging from 6 to 53, is 19 basis points of gross revenue. That's on the order of 5% of the overall technology spending rate we just reviewed, and, as a frame of reference, this already somewhat exceeds what such firms on average are spending on all of Bentley Systems' offerings. Most significantly for us, these firms anticipate increasing their annual AI implementation spending over the next three years to a median, ranging from 35 to 164, of 71 basis points, a multiple of almost four from today. If all other technology spending would just continue to grow at the same rate as over the last five years, this projected AI increment would cause total technology spending as a percentage of revenue to grow about 50% faster than at present. But we know the resulting AI impact will be such that rather than so extrapolate, we need to factor in the probable AI accelerated changes in infrastructure engineering business models as innovation and new services are enabled. This was the subject of dialogue with a diversity of thoughtful marketplace participants, including public and private sector infrastructure owners, as we helped lead a separate survey and convened an in-person discussion in September in London that culminated in this white paper, The Impact of Artificial Intelligence on the Built Environment. The majority of the 140 senior opinion leaders surveyed expect the impact of AI on current business models either to augur a major disruption, and so are already taking steps to adapt, or to impact to a significant extent. Interpreting the qualitative feedback as well, the knowledgeable white paper authors venture that AI will finally catalyze the long-awaited tipping point in engineering business model mix from hours-related revenue towards value-price data-enabled services and performance-slash-outcome contracting. To be sure, the emerging opportunities accordingly anticipated around automation, analytics, and digital twins bode well for Bentley Systems' forward-looking initiatives. But to the extent that our accounts would become incented and through AI increasingly able to more so minimize their currently generally billable engineering hours and days because they would instead be variously fixed in value and outcome pricing, What could be anticipated about the consumption of software and cloud services underlying our own business model? I could describe what we currently measure as consumption attended by a user and thus charged within E365 per day for our open applications and per quarter for project-wise and most term licenses. As our AI-native plus generation of applications progressively roll out, the commercial norm for our attended consumption charging is likely to become a hybrid combination of these factors and of surcharges based on computing intensity. With our AI accelerating the pace of engineering productivity growth, Attended consumption should generate commensurately higher value and hybrid monetization per relatively slowing time and or frequency of attended usage. At Year and Infrastructure, Nicholas previewed the commercialization of an already evident source of incremental consumption, with our application engines accessed through APIs to provide essential engineering context for simulations and analytics programmatically invoked by our accounts and users' AI agents. By virtue of our ingrained platform orientation, we are very enthusiastic about working with our enterprise accounts to prioritize development of many further such APIs and to arrive at reasonable monetization for the burgeoning value that API consumption will generate. Among potential AI-enabled business model innovations, the cited AI surveys show me that engineering firms and owners share our asset analytics aspiration for digital twins created and curated through AI to become the foundation for infrastructure inspections, operations, and maintenance. Bentley Systems is investing resolutely to lead this charge, internally and through our ongoing prioritization of capital allocation for pertinent strategic acquisitions. With critical mass for escape velocity gathering, I believe the resulting asset consumption will become for us another mainstay of subscription revenue growth. not only within owner-operators but also as their digital integrators with co-innovating engineering firms. My expectation for the confluence of our maturing incumbent consumption model and these new and incipient consumption streams is influenced by the way that these surveys and our enterprise subscription renewals show that infrastructure engineering executives are assessing against the backdrop of their engineering resource constraints, their current combination of record margins, organic real GDP plus growth and backlogs, and their auspicious opportunities in the infrastructure AI transform future. In the short and medium term, the prevailing sustainment of our E365 renewals, including for multiple out-years at negotiated annual floor and ceiling escalations consistently averaging about 10%, reflects shared confidence of enterprise accounts and of Bentley Systems and the continued healthy overall gradient of a changing mix evolving to everyone's benefit of attended API and asset consumption. And now to review, as usual, our robust markets and execution, including also notably strong SMB and new logo growth, and to highlight our year in infrastructure announcements and feedback, over to Nicholas. Thank you.

Thank you, Greg. A few weeks ago, infrastructure leaders from around the world gathered in Amsterdam for annual year infrastructure conference to showcase excellence in infrastructure delivery and performance through digital innovation. Amsterdam, celebrating its 750th anniversary, is a city built on land reclaimed from the sea through generations of engineering ingenuity. It was a filling stage for YII and the growing digital world. That same spirit of innovation took center stage. YAI was also an opportunity to share progress on last year's key announcements, such as integrating Cesium and Google Geo data across our portfolio. But today, I will focus my remarks on infrastructure AI, the theme introduced by Greg. The backdrop remains the same. Whether to address climate concerns, ensure energy supply, or more broadly, support economic and population growth, Our world is in unprecedented demand for better, more resilient infrastructure, yet lacks the engineering capacity to deliver it. We must make existing engineers more productive by empowering them with better tools, smarter workflows, and more connected data. At YII, the Going Digital Awards finalists once again showcase how Bentley's software helped them achieve meaningful productivity gains. often in the range of 15 to 25% or more. These gains, while impressive, are the most advanced projects and don't reflect the industry as a whole. Scaling them across all projects will help narrow the gap between global demand and current capacity, but closing it requires a step change in productivity. That step change is just beginning to take shape and it's AI. The AEC Advisor survey referenced by Greg shows large engineering firms making substantial investments in AI for design automation. For those building their own AI agents, Bentley can support them in several critical ways. First, we help them tap into past project designs. Every infrastructure asset is unique, but new designs shouldn't start from a blank screen. Historically, design data has been trapped in different file formats and proprietary systems. Bending Infrastructure Cloud, powered by iTwin, data is ingested from a wide range of file formats and mapped to our infrastructure schemas so that it can be queried, analyzed, and reused, including by AI. In this context, we announced Connect, a new foundational layer to Bending Infrastructure Cloud, Connect delivers a connected data environment for project and asset information, improving collaboration across the entire infrastructure lifecycle. From there, product-wise for designs and construction workflows, and asset-wise for operations and maintenance. Connect will be generally available in December. Next, we help firms who create their own AI agents by providing engineering context, ensuring their AI recommendations are grounded in sound engineering logic and physical principles. Hyundai Engineering, a Going Digital Award winner in 2023, demonstrated this by using our STAAD simulation application to validate the integrity of AI-generated designs. This year, I highlighted four similar examples in my keynotes, all drawn from an even larger number of going digital award submissions that illustrated how Bentley applications provide engineering context to AI. Infrastructure engineering is a creative profession, but one where precision is non-negotiable and consequences are real. The same way that infrastructure organizations have trusted our broad and deep applications to empower their individual engineers, they are turning to our applications to provide the same precision to their AI agents. Now, as our applications were not designed to interact with AI agents, we also announced the Infrastructure AI Co-Innovation Initiative, inviting our users to partner with us to explore how our applications need to evolve both technically and commercially, as Greg mentioned, to better support these AI use cases. At YII, we also highlighted the AI capabilities we are delivering to the broader engineering community, starting with our next-generation applications powered by AI. Open Site Plus, announced at last year's YII for Site Engineering, is now in limited availability. We also introduced two additional next-generation applications in Early Access this quarter. Substation Plus for collaborative substation design, and Synco Plus for 4D construction modeling with AI-driven insights. Open Site Plus applications feature Bentley Copilot, or AI-assisted purpose-built for infrastructure engineering. We are also enhancing existing applications with AI, bringing Bentley Copilot and AI-powered drawings production to open roads and open rail. And we unveiled new search capabilities in Bentley Infrastructure Cloud, powered by AI, as demonstrated on stage with ProjectWise. One last point. We talked about how engineering firms are leveraging our software to ensure that the recommendations from their AI agents are trustworthy. A related topic is trust from the engineering firms in the data that we use to train our AI capabilities. The AAC Advisor survey shows security and data privacy as the top concern of engineering firms with respect to AI. And this is across all firm sizes. At YII, we reaffirmed our stewardship first outlined two years ago. Respect for intellectual property is foundational to Bentley's approach. Users control their data always. They decide if and how it is used for AI training. To uphold this principle, we implemented strict governance. Only data explicitly licensed or explicitly contributed by accounts for the benefit of the broader Band-Aid user community, users can also fine-tune Band-Aid AI models with their own data for their exclusive use. And to ensure transparency, we introduced the data agreement registry, an auditing system that shows exactly how data was used to train Band-Aid AI models. When others are vague on these critical topics, we lead with clarity. Overall, we were pleased with this year's Year in Infrastructure, receiving great feedback about our comprehensive and principled approach to infrastructure. And I encourage you to check out our sessions and going to the total awards winners at yii.bentley.com. Moving on to our results for the quarter, we delivered a solid quarter in line with our expectations. Our year-to-date results position us well to finish within our outlook ranges for the full year. Low double-digit ARR growth, approximately 100 basis points of margin expansion, and robust free cash flow consistent with our long-term financial framework. Q3 ARR increased 10.5% year-over-year or 11% when excluding the impact of China. Growth was underpinned by a net revenue retention rate of 109%. E365 performance remained solid, and we added 300 basis points of AR growth from new logos again, primarily within the SMB segment. For the 15th consecutive quarter, we added at least 600 new SMB logos through our online store, with retention in this segment remaining high. Turning to our toy sector, Resources was once again our fastest growing sector in the quarter. We continue to see soft signals of improvement in mining exploration. Public Works Utilities delivered another solid quarter consistent with first half performance and driven by sustained global infrastructure investment. Powerline systems remain a standout performer benefiting from global demand for grid resilience and increased power generation. growth in industrial sector remained modest for facilities was flat looking at our geographies at a high level asia pacific had a strong quarter followed by the americas and emea growth in americas was solid led by north america in the u.s our accounts continue to benefit from a favorable macro backdrop despite ongoing uncertainty though less so from tariffs and policy shifts and the recent federal shutdown. To date, we have seen minimal disruption from the shutdown. Looking ahead, there are concerns that full-scale permitting reform for energy infrastructure and critical minerals in the US could happen in the coming quarters. Both our parallel systems and sequent businesses are very well positioned to benefit from these developments. In the MEA, the Middle East continued to lead the region with another very strong quarter, followed by Europe and the UK. Long-term opportunities are supported by robust investment in transport, water and energy, particularly in areas such as dual-use infrastructure expansion and nuclear. There is also movement in Europe on permitting reform. The European Commission published guidance to help member states accelerate permitting and deployment of renewable energy and grid infrastructure as part of its broader effort to lower energy costs and strengthen supply security. In Asia-Pacific, overall performance was strong, with India and Southeast Asia standing out. Robust investment in India is expected to continue, supporting its 2047 vision for long-term growth and development. Growth in ANZ remains softer due to the slowdown in transportation spending in Australia. However, there is general expectation that it will rebound, driven by infrastructure projects tied to the 2032 Brisbane Olympics. China's performance was consistent with our expectations, given the economic and geopolitical headwinds, and represents only about 2% of total ARR. And with that, Werner, over to you.