Infrastructure engineering software company Bentley Systems (NASDAQ: BSY) announced better-than-expected revenue in Q1 CY2026, with sales up 14.5% year on year to $424.2 million. Its non-GAAP profit of $0.38 per share was 6.9% above analysts’ consensus estimates.
Is now the time to buy Bentley Systems? Find out by accessing our full research report, it’s free.
Bentley Systems (BSY) Q1 CY2026 Highlights:
- Revenue: $424.2 million vs analyst estimates of $419.3 million (14.5% year-on-year growth, 1.2% beat)
- Adjusted EPS: $0.38 vs analyst estimates of $0.36 (6.9% beat)
- Adjusted Operating Income: $158.9 million vs analyst estimates of $150.6 million (37.5% margin, 5.5% beat)
- Operating Margin: 29.8%, down from 31.1% in the same quarter last year
- Free Cash Flow Margin: 44.3%, up from 34.8% in the previous quarter
- Net Revenue Retention Rate: 109%, in line with the previous quarter
- Annual Recurring Revenue: $1.49 billion vs analyst estimates of $1.49 billion (13.3% year-on-year growth, in line)
- Billings: $414.2 million at quarter end, up 12.3% year on year
- Market Capitalization: $10.07 billion
CEO Nicholas Cumins said, “We are pleased to report a strong start to 2026, reflecting both solid market fundamentals and strong execution by our team. The quarter was highlighted by the performance of our Resources business, which continues to be our fastest-growing sector, and by the steady demand from Public Works / Utilities. This gives us a solid foundation for the year.
Company Overview
Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ: BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Bentley Systems grew its sales at a 13.4% compounded annual growth rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the software sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Bentley Systems’s recent performance shows its demand has slowed as its annualized revenue growth of 11.5% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, Bentley Systems reported year-on-year revenue growth of 14.5%, and its $424.2 million of revenue exceeded Wall Street’s estimates by 1.2%.
Looking ahead, sell-side analysts expect revenue to grow 12% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and implies its newer products and services will not accelerate its top-line performance yet.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
Annual Recurring Revenue
While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.
Bentley Systems’s ARR came in at $1.49 billion in Q1, and over the last four quarters, its growth was underwhelming as it averaged 12.8% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in securing longer-term commitments. 
Customer Retention
One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.
Bentley Systems’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 109% in Q1. This means Bentley Systems would’ve grown its revenue by 9% even if it didn’t win any new customers over the last 12 months.
Bentley Systems has a decent net retention rate, showing us that its customers not only tend to stick around but also get increasing value from its software over time.
Key Takeaways from Bentley Systems’s Q1 Results
It was encouraging to see Bentley Systems beat analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its billings missed. Overall, this quarter could have been better. The stock traded down 3.4% to $30.97 immediately after reporting.
Bentley Systems may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
