Bentley Systems, Incorporated (BSY): BCG Matrix [Dec-2025 Updated]

You're looking for the straight story on Bentley Systems, Incorporated's (BSY) business health as of late 2025, so here's the distilled view: the company's foundation is rock solid, with a massive $1,405.2 million in Annualized Recurring Revenue providing the fuel. We've broken down their portfolio using the BCG Matrix, clearly showing how the dependable Cash Cows-like MicroStation-are funding the high-potential Stars, such as the iTwin Platform, while also covering the risks tied up in Question Marks like the China operations. It's a textbook case of using scale to drive future growth, but you need to see exactly which units are stars and which are dogs to understand where to place your bets next.

Background of Bentley Systems, Incorporated (BSY)

You're looking at Bentley Systems, Incorporated (BSY), which is fundamentally an infrastructure engineering software company, founded way back in 1984 by engineers for engineers. They're based in Exton, Pennsylvania, and their whole game revolves around providing digital twin solutions that help professionals design, build, and operate everything from roads and bridges to water and energy systems. Honestly, their software spans the entire infrastructure lifecycle, which is a huge scope.

The real story for Bentley Systems lately is the shift to recurring revenue. As of the third quarter of 2025, their mainstay subscription revenue accounted for a massive 92% of total revenues. For the nine months ending September 30, 2025, total revenues hit $1,110.2 million, showing a solid 10.7% increase year-over-year on a constant currency basis. That steady progression is what management often points to.

Let's look closer at the recurring numbers as of September 30, 2025. Annualized Recurring Revenues (ARR) stood at $1,405.2 million, which was a 10.5% constant currency growth rate for the year to that point. Plus, their dollar-based net retention rate for recurring revenues over the last twelve months was 109%, meaning existing customers are spending more with Bentley year after year. That retention rate is definitely a key indicator of product stickiness.

The company is also seeing success broadening its customer base; Enterprise 365 (E365) and Small and Medium Business (SMB) accounts are now contributing 45% of the ARR, up from just 25% back in 2020. This suggests they're successfully moving beyond just the largest traditional enterprise accounts. The overall Total Addressable Market (TAM) for infrastructure-engineering software is estimated to be around $29.8 billion, so there's still plenty of room to grow, even with competitors like Autodesk in the space.

Finance: draft the required market share and growth rate assumptions for the four product lines based on the Q3 2025 data by Monday.

Bentley Systems, Incorporated (BSY) - BCG Matrix: Stars

The Stars quadrant for Bentley Systems, Incorporated (BSY) is characterized by business units operating in high-growth markets where the company maintains a high relative market share, demanding significant investment to maintain leadership.

Overall Business Performance Context (Q3 2025)

The overall constant currency ARR growth rate of 10.5% as of September 30, 2025, positions the core recurring business within a high-growth market context, supporting the Star categorization for key growth drivers.

iTwin Platform and Infrastructure AI

The iTwin Platform is the foundation for Bentley Infrastructure Cloud Connect, which leverages the platform to ingest data from over 50 distinct file formats and integrate with various enterprise systems. The company supports ecosystem growth through its iTwin Ventures fund, offering startups up to USD 250K in funding through a SAFE note.

• Bentley Infrastructure Cloud Connect General Availability: December (2025)
• New next-generation AI-powered applications introduced at Year in Infrastructure 2025: Three

Power Line Systems (PLS) and Seequent

Power Line Systems (PLS) is explicitly noted as a standout performer, capitalizing on global demand for grid resilience. Seequent, a leader in 3D modeling software for geosciences, was acquired for approximately $1.05 billion, comprising $900 million in cash (subject to adjustment) plus 3,141,361 Class B shares. The acquisition was expected to initially add approximately 10% to key financial metrics like ARR and annual revenue. Seequent was projected to contribute in excess of $80 million to ARR in its initial year of contribution.

Asset Analytics Solutions

New Asset Analytics deals are cited as a catalyst for expected stronger ARR growth in Q4 2025. The Chief Operating Officer has responsibility for growth initiatives including Bentley Asset Analytics.

The following table summarizes the financial context for key growth areas and their expected impact:

The company expects Q4 2025 year-over-year ARR growth to be higher compared to Q3 2025.

Bentley Systems, Incorporated (BSY) - BCG Matrix: Cash Cows

You're looking at the bedrock of Bentley Systems, Incorporated's financial strength, the Cash Cows. These are the established products that dominate their mature segments, generating far more cash than they consume. For Bentley Systems, Incorporated, this category is defined by the reliability of its core software offerings.

Core Subscription Portfolio: Mainstay Products

The mainstay subscription products, which include foundational platforms like MicroStation and OpenRoads, are the engine here. These products command a high market share in the infrastructure engineering software space, which is a mature market segment. For the third quarter of 2025, these subscriptions were responsible for a massive 92% of the total revenues, which amounted to $375.5 million for the quarter. Subscriptions revenues specifically hit $344.3 million in Q3 2025. This concentration shows where the predictable, high-margin cash is coming from; it's definitely the core base.

Annual Recurring Revenue (ARR) Stability

The stability of this cash flow is best quantified by the Annual Recurring Revenue (ARR). As of September 30, 2025, Bentley Systems, Incorporated reported an ARR base of $1,405.2 million. This figure represents a significant, predictable stream of income, which is exactly what you want from a Cash Cow. This base is what funds the riskier bets in the portfolio, so keeping it healthy is paramount.

Here's a quick look at the key recurring metrics as of the end of Q3 2025:

Deep Customer Entrenchment and Cash Generation

The deep entrenchment of these products is evidenced by the dollar-based net retention rate. For the last twelve months ending September 30, 2025, this rate stood at 109%. What this estimate hides is that even without adding many new logos, your existing customers are spending more on the core platform, which is a powerful sign of value capture. This high retention means promotion and placement investments can be relatively lower compared to growth-stage products.

The resulting cash flow is robust, which is the whole point of a Cash Cow. For the nine months ending September 30, 2025, the company generated Free Cash Flow (FCF) of $384.0 million. The Q3 2025 figure alone was $110.7 million. This cash is what you use to support the rest of the business structure.

You can see the cash generation in action:

• Cash flows from operations (Q3 2025): $116.4 million.
• Free Cash Flow (Q3 2025): $110.7 million.
• Free Cash Flow Year-to-Date (YTD 2025): $384.0 million.
• Operating Income Margin (Q3 2025): 22.5%.

Investments here are focused on maintaining efficiency, like supporting the cloud infrastructure, rather than aggressive market expansion. Finance: draft 13-week cash view by Friday.

Bentley Systems, Incorporated (BSY) - BCG Matrix: Dogs

You're looking at the parts of Bentley Systems, Incorporated (BSY) that aren't driving the high-growth story, the ones that are just ticking over. In the BCG framework, these are the Dogs: low market share in low-growth areas. They tie up capital without offering much return.

Perpetual License Revenue

The outlook for Perpetual Licenses revenue for the full year 2025 is approximately flat in constant currency. This contrasts sharply with the core subscription business, which is projected for growth between 10.5% and 12.5% in constant currency for 2025. This flatness signals a mature, low-growth segment, likely representing older purchasing models that the company is actively trying to migrate away from.

Here's how the revenue streams are positioned for the full year 2025 outlook:

To give you a concrete look at the non-subscription side from mid-2025, for the first half of 2025, License revenue was reported at $38 million.

Professional Services Revenue

Professional Services revenue is also expected to be approximately flat in constant currency for the full year 2025. This segment has been described as subdued, and its percentage contribution to total revenue is shrinking as the subscription base grows-subscription revenues made up 90% of total revenue at the end of 2024 and grew to 92% by the third quarter of 2025.

The trend shows a clear prioritization away from services, which often involve project-based, lower-margin work. For instance, in the fourth quarter of 2024, services revenues declined by 21% year-over-year, even as subscription revenues grew by 15.8%.

The numbers for the first half of 2025 show a slight uptick, but still low compared to the core business:

• Services revenue for the first half of 2025: $21 million.
• Services revenue growth for the first half of 2025: +3% year-over-year.

If onboarding takes 14+ days, churn risk rises, and services are often tied to implementation.

Legacy Product Versions

Legacy product versions fall squarely into this Dog category, as they are the primary drivers of the non-growing Perpetual License revenue stream. These are the older, non-cloud-native software instances that customers hold onto, requiring maintenance but not driving the strategic cloud transition.

The lack of growth expectation for perpetual licenses suggests that the installed base of these legacy versions is either static or slowly declining, but not fast enough to be divested immediately. This is compounded by specific geographic headwinds; for example, ARR growth excluding China was projected at 12.5% year-over-year in early 2025, but management had limited expectations for a turnaround in China, where ARR declined substantially and structurally in recent years.

The key characteristics of these Dog segments are:

• Perpetual License growth outlook for 2025: Approximately flat.
• Services revenue growth outlook for 2025: Approximately flat.
• Q4 2024 Services Revenue decline: 21%.

Finance: draft 13-week cash view by Friday.

Bentley Systems, Incorporated (BSY) - BCG Matrix: Question Marks

You're looking at the segments of Bentley Systems, Incorporated (BSY) that are currently burning cash but hold the potential for significant future growth-the classic BCG Question Marks. These are areas where the market is expanding rapidly, but our current footprint, or market share, is still small or unproven. Honestly, these are the riskiest bets in the portfolio right now, demanding heavy investment to see if they can mature into Stars.

Here's a quick look at the key areas fitting this high-growth, low-share profile as of late 2025:

China Market Operations

Management has definitely signaled caution here. The geopolitical and market uncertainties are real, leading to conservative expectations that narrowed the top-end of the 2025 Annual Recurring Revenue (ARR) guidance. We've seen a continued decline in revenues from this region. As of the first quarter of 2025, the Annual Recurring Revenue exposure from China has shrunk to less than 2.5% of the total ARR. That's a low base for a major geographic market, showing the current low market share despite the underlying market size.

The key actions here revolve around risk mitigation, not aggressive expansion, for the near term. The company is focusing on diversification, with strong growth anticipated elsewhere, like EMEA and India, to offset the China headwinds.

API Commercialization

This represents a high-risk, high-reward play centered on monetizing consumption of the iTwin platform's capabilities, likely via APIs (Application Programming Interfaces). It's a pure growth play because the market for infrastructure data access is expanding, but it's not yet translating into measurable revenue streams that would show up in the subscription numbers. The overall Subscription Revenues for Bentley Systems, Incorporated (BSY) are projected to grow between 10.5% and 12.5% in constant currency for the full year 2025, but this new API layer is not yet a known driver of that growth.

The strategy is to drive adoption first, hoping to quickly convert usage into a significant revenue stream later. We need to see how this new commercialization model integrates with the existing subscription base, which was already responsible for 91% of total revenue in Q2 2025.

Bentley Infrastructure Cloud Connect

This is a brand-new, major platform layer, with its General Availability (GA) scheduled for December 2025. It's designed to be the unified data environment connecting design, construction, and operations, powered by the iTwin platform and Cesium 3D visualization. Because it's launching right at the end of the year, its market share is, by definition, zero or near-zero in terms of established revenue contribution for 2025.

The investment required to bring a foundational platform like this to market is substantial. The success of this product will be measured by its adoption rate in 2026 and beyond, as it needs to quickly gain traction to justify the R&D spend. Early adopter feedback from WSB noted curated views of 72 projects accessible to over 900 external stakeholders from 86 organizations, which is a strong initial signal, but not yet market share.

• It unifies data across the infrastructure lifecycle.
• It features a dedicated mobile application for field access.
• It serves as the new entry point to the Bentley Infrastructure Cloud.

Small, Programmatic Acquisitions

Bentley Systems, Incorporated (BSY) maintains a strategy of using its strong cash generation-with Free Cash Flows reaching $384 million year-to-date through Q3 2025-to fund programmatic acquisitions. These smaller deals are intended to fill technology gaps, but their long-term impact on overall market share and growth is inherently uncertain until fully integrated. The most recent acquisition detailed was Cesium in September 2024. Even in Q3 2025, management noted that ARR growth was in line with expectations despite an unfavorable comparison with Cesium's performance in the prior year, suggesting the integration and revenue ramp-up are still being closely monitored.

These tuck-in deals are meant to bolster core offerings like Asset Analytics and the iTwin platform, but they don't move the needle on the overall market share in the way a massive acquisition would. Finance: draft 13-week cash view by Friday to monitor capacity for the next programmatic deal.