Bentley Systems, Incorporated

Good morning, and thank you for joining Bentley Systems Q1 2026 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 May 7, 2026, regarding the future results of operations and financial position, business strategy and plans, and objectives for future operations at Bentley Systems Incorporated. All such statements made in or contained during this webcast are other than statements of historical fact or forward-looking statements. This webcast will be available for replay on Bentley Systems' Investor Relations website at investors.bentley.com on May 7, 2026. After our presentation, we will conclude with Q&A. And with that, let me introduce the Executive Chair of Bentley Systems, Greg Bentley.

Thanks to each of you for your interest in BSY's 26Q1. Nicholas will describe factors that contributed to commendable operating performance favorably according, as usual for BSY, with our annual full-year outlook. Werner will put this in the financial terms, which continue to differentiate BSY as leading among peers both in the quality and in the measures most meaningful to shareholders of sustained profitability and cash flows. I will supplement their on-the-ground reporting with perspectives behind our characteristically even higher prioritized endeavors to benefit our future value, in particular through advancements which make AI for us more a seminal opportunity than a terminal threat. Last quarter, I enumerated some respects in which Bentley Systems' prospects are rather uniquely enhanced and accelerated by AI. Our advantages, as summarized here, make the case that leadership in infrastructure AI is destined, given our experience and determination within Bentley Systems' grasp. Our long-established incumbency as the digital quartermasters for infrastructure engineering organizations' substantive tooling is a differentiating and immediate advantage. Quantification of that pole position will be my focus today. In particular, our modeling and simulation applications have established the de facto standards for responsible and deterministic infrastructure engineering. And the stewardship for each account of their cumulative infrastructure engineering data in Bentley Infrastructure Cloud, project-wise, synchro, and asset-wise, positions them to leverage AI to compound value for themselves and for their own constituents at a steeper rate than ever. Beyond our existing consumption business models, AI is on the cusp of adding to our growth incrementally a genetic API consumption of our modeling and simulation functionality, especially for optimization of designs and, for instance, to intrinsically improve constructability. And our asset analytics initiative, spawned by AI and already exceeding $50 million in annual revenue run rate, is leading the way toward instant-on digital twins to optimize operations and maintenance, commercialized through subscriptions denominated in consumption per asset. Imbued with all these factors and shaping our distinctive AI game plan, our business is anchored by stalwart enterprise accounts. Within infrastructure engineering, these enterprises are on the leading edge of adopting, acting upon, and evolving individual proprietary AI initiatives, which we are there to support, prioritize, and enable. What will never change is that their business is our business, and their success is our success. Underscoring this affinity, 45% of our revenue comes from 220 accounts which each spend over $1 million per year with us. and almost two-thirds of our revenue comes from 824 accounts, which each spend over 250K per year with us, mostly, of course, through E365 consumption subscriptions, which include in each case a dedicated BSY technical success team positioned to nurture joint AI initiatives. To understand the extent to which our interests are aligned with, rather than opposed to, our accounts, Let us drill down on project delivery firms, in particular because Engineering News Record surveys and ranks them all, publishing individual revenue breakdowns that can help us understand their economics and our own penetration level and potential as digital quartermasters. From Engineering News Record's two lists ranking respectively domestic and international headquartered design firms, last published together a year ago, we compile the composite ENR global top design firms ranked by their verified design billings. For 2025, these 639 global top design firms generated $280 billion of design billings. 25% of these design billings were generated by 25 Chinese organizations. Unfortunately, because they're generally within state-owned entities, geopolitical tensions currently inhibit their accessibility for us. Thus, the top global design firms ex-China consist of 614 top firms generating design billings of $212 billion. Of these, 470 are BSY accounts, together accounting for $198 billion in design buildings, 93% of the ex-China total. A considerable portion of those whom are not BSY accounts are rather pure architecture firms. With our ARR across these BSY accounts totaling $414 million, or about 28% of our overall ARR, top design firms are our largest constituency. Per million dollars of their design billings, they spend on average about $2,000 in BSY ARR. On average, each uses about four among BSY's top brands, plus several other lesser brands. The top brand for these accounts, also now BSY's top brand, is ProjectWise, in use by 270 of the top firms, together generating $160 billion in design billings, representing 76% of the design billings of the ex-China top firms. In a coming quarter, we will describe joint AI initiatives with these firms to compound the reuse benefits from their Bentley Infrastructure Cloud data platforms. For now, I would like to quantifiably illustrate the aligned incentives for BSY and top design firms to work together on the incipient AI transformation of their business model. The key is that infrastructure engineering software isn't for these firms overhead or administration. It is a most necessary factor of production to enable, capture, and deliver their substantive work. along with attendant labor and associated computing, it's a cost of revenue. To assess the economics, let's consider a representative project with a million dollars of design buildings. Triangulating variously, including from BSY's $2,000 average of spending per million dollars of design billings across the universe of all of our top firms' accounts projects globally, I estimate that a representative million-dollar design project would consume about $10,000 of design software. Since margins for these firms now reach about 10%, The cost other than for design software, mostly for engineers labor, must then be $890,000. Now, what could a top firm gain by theoretically investing to the detriment of its design software vendors to somehow reduce its design software spending, say by 20%? For that putative inspiration and effort and distraction and risk and liability, an investment which thus couldn't afford to be much, their net profit margin would extensively grow from 10% to 10.2%. But... Back to the drawing board, consider that investing instead in AI automation and agentic API consumption and computing, even if that, say, doubled the all-in design software cost, could save at least 20% of scarce engineering time, as that is readily achievable with just agentic automation of drawings production. It seems logical to prefer reducing engineering labor because these top design firms compete with one another for a demographically shrinking talent pool of infrastructure engineers. And with near-record backlogs, these resource constraints limit the new projects each firm can pursue, even though there's an abundance of infrastructure engineering work available. Unfortunately, with the prevalent hourly billing commercial model for infrastructure engineering, improved productivity would produce more output with the same staffing, but not more design billings. So one more simple change would be needed to make this fully worthwhile. Transform the design billings commercial model for such projects to fixed pricing. Now, if I were an infrastructure owner operator client, the only objection I can think of to fixed pricing would be a concern that as a result, corners might be cut, alternatives might not be pursued, and thus engineering quality could be compromised. But now, with API consumption enabling demonstrable agentic optimization, that concern can be overcome technically. And each human engineer, now augmented by busy agents and automation, remains daily in the loop, but delivering 20% more design billings on additional projects in the same time, yielding very worthwhile AI-enhanced economics. the top design firm enterprise, by investing in proprietary AI agents to automate and leverage and to API consume trusted modeling and simulation functionality, could now generate IP level margins of over 24% on the same engineering inputs. As the owner-client gets better assured and more timely quality of designs at no higher cost, everyone wins, including the fully employed and probably gainfully incented engineer, not to mention the software and computing providers. So while respecting confidentiality of our enterprise accounts, individual AI plans and strategies, Nicholas will provide a brief update on our infrastructure AI program with accounts for such joint initiatives, among his other content. So over to you, Nicholas. Thank you.

Thank you, Greg. We began 2026 on a strong footing. Our Q1 performance demonstrates our ability to consistently execute against a backdrop of sustained global demand for better performing and more resilient infrastructure. Before going further, my thoughts are with our colleagues and users affected by the conflict in the Middle East. I am incredibly grateful for our team in the region. Their commitment to our users has been unwavering, and their dedication is inspiring. Following up on Greg's remarks, I will start with an update on AI. We continue to execute on our AI initiatives across the portfolio, but I will focus on two recent highlights. First, on Bentley Asset Analytics. To take this business to the next level of scale, I am delighted to welcome Brian Freehoff as our new general manager. Brian joins us from GE Vernova and was previously at Hitachi. He brings a wealth of experience in scaling enterprise software businesses in the operation and maintenance phase of the infrastructure lifecycle. Second, on Bentley Open Applications, we have engaged with leading infrastructure organizations, both engineering services firms and owner-operators, as part of the infrastructure AI initiative announced at the end of 2025. The feedback has been clear and consistent. There is strong demand for us to instrument our applications so they can power users' own AI-driven workflows. Based on this strong feedback, we have prioritized the development of both APIs and MCP servers. In fact, we just released an MCP server for STAAD, our flagship product for structural analysis. To give you a sense of the potential, this allows an AI agent like Claude to interact directly with STAAD to optimize the structural design at machine speed. The ability to iterate on complex design trade-offs so quickly is transformative. Our next steps are to instrument other key applications and to validate the commercial model for this powerful new usage pattern. We look forward to sharing your progress. Now turning to our business highlights. Our year-over-year AR growth for Q1 was 11.5% in line with our expectations. Our net revenue retention rate remains strong at 109%, consistent with previous quarters, and highlighting the stability and growth within our existing accounts. Our Enterprise 365 commercial program continues to drive steady growth, both in terms of conversions, as well as floor uplift at renewals, noting that Q1 is our smallest quarter for renewals. New logos contributed again 300 basis points of AR growth, primarily within the SMB segment. Through Virtuoso, our flagship commercial program for SMB accounts, we again added over 600 new logos in Q1. At the same time, our growth model is evolving, with an increasing contribution from cross-selling and up-selling to existing Virtuoso accounts. While our renewal rate remains high, the sheer scale of the virtuoso base creates a natural churn dollar amount to overcome each period. Our combination of new logos and existing account expansion allows us to continue to deliver strong net growth. Turning to our performance by infrastructure sector, resources were the fastest growing sector in total and across each geographic region. We expect another strong year for Sequent, bolstered by improving mining fundamentals. I will come back to how we plan to expand our addressable market even further into critical resources in a few minutes. Our larger sector public works utilities delivered a solid quarter, driven by robust global infrastructure investments. Powerline's system continues to benefit from increasing demand for grid resiliency and new power generation, as well as international expansion. The adoption of sequent applications for the civil infrastructure also supported growth in that sector. Growth in the industrial sector continued to be solid, while commercial facilities remained relatively flat. Turning to our tone of business by geographic region. In the Americas, our largest region, the US delivered solid growth, supported by stable public funding at both the federal and state levels for transportation, grid, and water projects. Private investment was also robust, particularly in resources and AI-related data centers and power generation. Latin America delivered a standout quarter with strong performance from Sequin in mining and from our increased focus on transportation in the region. EMEA was our fastest growing region in the quarter. This strong performance was achieved despite the conflict in the Middle East, which saw some project delays and a shift in consumption to all the regions. However, this was more than offset by strengths elsewhere. In the UK, growth accelerated as major projects moved into the delivery phase, just as we anticipated last quarter. We also saw robust growth in Africa, driven by increased spending in mining. Asia Pacific delivered solid growth, with India once again leading the way, and Australia showing improved momentum. While we continue to navigate persistent headways in China, which represents approximately 2% of ALR, the strength across the rest of the region more than compensates. Now I would like to take a deeper dive into our resources sector. This is a part of our business that has become increasingly significant, and we believe it's important for you to appreciate its journey and its forward-looking potential. When we acquired Sequent almost five years ago, our primary objective was strategic, to integrate their best-in-class software for understanding the subsurface into the world of infrastructure. We knew that a misunderstanding of ground conditions is a primary cause of delays and risk in major infrastructure projects. As a byproduct of that strategic move, we also acquired a sizable and thriving business in the resources sector. I am pleased to report that the initial strategy has proven effective. Since the acquisition of Sequent, we have grown our subsurface ARR in civil infrastructure by a factor of four, in part due to successful cross-selling into the existing Bentley accounts. The potential for further growth is significant as engineering services firms adopt a ground-informed design approach, bringing detailed ground investigation in as a foundational step before design begins, much like they already do for above-ground surveying. At the same time, Sequent has continued its impressive growth in its core mining market. Sequin's growth rate in 2025 accelerated as the geopolitical climate and race to AI increased the focus on critical minerals. We expect these trends to continue in 2026, contributing to another standout year for Sequin. However, it is important to note that Sequin has delivered strong growth even during the mining exploration slowdown starting early 2023, when production mining companies use our solutions to mine existing deposits more efficiently. But the potential of Sequin in resources extends beyond traditional mining. Sequin's technology is pivotal for other critical resources that are essential to the global economy and to society. Take, for instance, new sources of energy. Sequence software is already instrumental in the operations of more than 60% of the world's high-temperature geothermal electricity generation. Now it's being applied to new enhanced geothermal systems by companies such as Fervor Energy, a winner at our 2025 Yen Infrastructure Awards. Their project CAPE in Utah, for example, demonstrated how new drilling techniques and digital technologies are making geothermal power increasingly accessible and economically viable. Clean, renewable, and consistent baseload energy is more critical now than ever as AI and data centers demand more power. And sequence impact extends to the most vital resource of all, water. Groundwater supplies about 50% of global domestic water and over 40% of irrigation water. Most of these resources are under stress due to overuse. Sequence software is used around the world by engineering consultancies to manage these resources, mapping aquifers from California to India, designing managed aquifer recharge facilities, and constructing a digital framework for groundwater management models. So, nearly five years since the acquisition of Sequent, resources have become our second largest sector, accounting for more than 20% of our sector attributable ARR, and it continues to be our fastest growing sector. In summary, it was a strong start to the year. We are executing well in a robust market, and we're excited about expanding our reach further within the resources sector. Before heading off to Werner, a quick update on our event strategy. We are decoupling our YI awards from our user conference to create two distinct world-class events. Our year in infrastructure event will now be exclusively focused on our global awards competition. We are keeping its intimate and celebratory format. And this year, it will be held in Singapore from October 6 to 7. Separately, we're launching a new large-scale user conference dedicated to product learning, best practices, and community networking. The very first will take place in Toronto in April of 2027. We believe this new format will allow both events to thrive. And now, for a detailed review of our financial results, Over to you, Werner.