BENTLEY SYSTEMS INC
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
BSY$44.65-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-26.
0001031308-25-000002
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001031308-26-000007
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 170 previous paragraphs and 167 current paragraphs.
95 unchanged; 57 reworded; 11 added; 17 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
The improvements in business performance for the year ended December 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in Australia and India, as well as increases in our subscriptions revenues from new accounts.
Current report
Additionally, for the year ended December 31, 2025, our revenues in China were essentially flat. Our perpetual licenses revenues in China increased primarily due to expansion from new accounts, partially offset by a decline from existing accounts. Our subscriptions revenues in China decreased primarily due to a decline from existing accounts, partially offset by an increase from new accounts.
Current report
For the year ended December 31, 2025, on a constant currency basis, research and development expenses increased primarily due to an increase in headcount‑related costs of $25,665, mainly due to increases in headcount, and annual and other compensation costs, and to a lesser extent, higher colleague separation costs. Headcount‑related costs for the year ended December 31, 2024 were lower due to run‑rate savings as a result of the 2023 Program.
Current report
Starting in 2026, we expect general and administrative expenses to include amortization of internal-use software implementation costs, which represents amortization of deferred costs primarily related to the implementation of our new enterprise-wide administrative and business management platforms which are planned to complete going live in 2026.
Current report
For the year ended December 31, 2025, on a constant currency basis, general and administrative expenses increased primarily due to an increase in headcount‑related costs of $4,412, mainly due to increases in headcount, and annual and other compensation costs, partially offset by lower incentive compensation expense related to the reduction in Gregory S. Bentley’s fractional interest under the amended and restated Bentley Systems, Incorporated Bonus Pool Plan (the “Bonus Plan”) as part of Mr. Bentley’s transition to the role of Executive Chair effective July 1, 2024. Additionally, during the year ended December 31, 2024, we recognized approximately $2,200 of other corporate initiatives expenses, which did not recur in the current year.
Current report
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes the permanent extension of certain expiring provisions of the U.S. Tax Cuts and Jobs Act (the “JOBS Act”), modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates. The OBBBA had a favorable impact on our cash paid for income taxes in 2025, with continued cash tax favorability expected in 2026, primarily attributable to the change in restoring immediate U.S. tax deductions for domestic research and development expenses. The OBBBA did not have a material impact on the effective tax rate for the year ended December 31, 2025.
Current report
Adjusted Operating Income Less Stock-Based Compensation Expense (“AOI less SBC”)
Current report
Adjusted Operating Income (“AOI”)
Current report
As of December 31, 2025, the 2026 Notes were classified as long‑term in the consolidated balance sheets as we had the ability and intent to refinance them on a long‑term basis through available capacity under the Credit Facility.
Current report
The 2026 Notes matured on January 15, 2026. Upon maturity, we repaid $678,254, which consisted of the remaining outstanding principal balance and accrued interest on the 2026 Notes using borrowings under the Credit Facility and available cash on hand.
Current report
We evaluate intangible assets subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that useful lives of those assets are no longer appropriate. If circumstances require an asset to be tested for possible impairment, we first compare the undiscounted cash flows expected to be generated by that asset to its carrying value. If the carrying value of the asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. The process of evaluating the potential impairment of intangible assets is subjective and requires significant judgment at many points in the process. There was no impairment of intangible assets subject to amortization for the years ended December 31, 2025, 2024, or 2023.
Removed paragraphs (17)
Previous report
Impact of Foreign Currency
Previous report
(1)Constant currency is a non‑GAAP financial measure. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our prior definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Previous report
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our prior definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Previous report
The improvements in business performance for the year ended December 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in Australia, Southeast Asia, and India, partially offset by declines of our subscriptions revenues from existing accounts in China.
Previous report
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our prior definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Previous report
Percentage changes that are considered not meaningful are denoted with NM.
Previous report
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our prior definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Previous report
For the year ended December 31, 2024, on a constant currency basis, research and development expenses increased primarily due to an increase in headcount‑related costs of $9,513, mainly due to an increase in annual and other compensation costs. Offsetting the increase in headcount‑related costs were $4,995 of realignment expenses related to the 2023 Program recorded during the year ended December 31, 2023.
Previous report
For the year ended December 31, 2024, our research and development headcount‑related costs reflect run‑rate savings associated with the 2023 Program, which we initiated during the fourth quarter of 2023. While most of the realignment actions were completed at the beginning of 2024, our reinvestment of these run‑rate savings into priority investment areas, such as AI in product development, was not fully realized until the third quarter of 2024.
Previous report
For the year ended December 31, 2024, on a constant currency basis, general and administrative expenses increased primarily due to an increase in headcount‑related costs of $11,048, mainly due to an increase in annual and other compensation costs, and to a lesser extent, higher charitable contributions focusing on education and sustainability of $4,143 and higher expense associated with non‑income related taxes of $3,585. Additionally, during the year ended December 31, 2024, we recognized approximately $10,300 of costs associated with our internal-use software implementations, as well as approximately $2,200 of other corporate initiatives expenses. Partially offsetting these increases were lower acquisition costs of $4,276.
Previous report
Percentage changes that are considered not meaningful are denoted with NM.
Previous report
During the fourth quarter of 2023, we recognized a net discrete income tax benefit of $170,784 attributable to internal legal entity restructuring and related intra-entity transactions as part of our continuing efforts to align intellectual property ownership with our business operating model. These transactions resulted in the recognition of deferred tax benefits arising from the net increase in deferred tax assets related to intangibles and goodwill of $171,622. As of December 31, 2023, the deferred tax assets represented the undiscounted future anticipated cash tax impacts of basis differences, which were expected to be realized through tax amortization over the next 13 years, beginning in 2024. See Note 16 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K for additional information.
Previous report
In March 2022, in response to the Russia‑Ukraine war, we announced a pause of sales in Russia and Belarus, in addition to our strict compliance with applicable sanctions, regimes, and other regulatory restrictions on business activities in those countries. As a result of the conflict, we deemed our overall business recurrence in the affected countries to have been reduced by approximately 50%, and accordingly, reduced our related ARR by $5,190 as of March 31, 2022. During the second quarter of 2022, the marked shifts in the Russian business environment and economic outlook led us to conclude it was no longer viable for us to continue operations in Russia. Accordingly, we made the decision to wind down business and exit the Russian market, which resulted in a further reduction in our ARR by $6,000.
Previous report
Our ARR growth rate was favorably impacted by the ARR onboarding from our platform acquisition of PLS by 2.5% for the year ended December 31, 2022.
Previous report
Adjusted OI w/SBC
Previous report
Adjusted Operating Income
Previous report
In testing intangible assets other than goodwill for impairment, we may first qualitatively assess whether it is more likely than not (a likelihood of more than 50 percent) that an intangible asset impairment exists. If it is determined that a quantitative assessment is required, we will evaluate the cash flows generated by the underlying asset, including estimated future operation results, trends, or other determinants of fair value. If the total of the expected future undiscounted cash flows were less than the carrying amount of the asset, we would recognize an impairment charge to the extent the carrying amount of the asset exceeded its estimated fair value. There was no impairment of intangible assets for the years ended December 31, 2024, 2023, or 2022.
Reworded paragraphs (57)
Previous wording
Bentley Systems is the infrastructure engineering software company. Our purpose is to advance the world’s infrastructure for better quality of life. We empower people to design, build, and operate better and more resilient infrastructure through the adoption of our intelligent digital twin solutions. We manage our business globally within one reportable segment, the development and marketing of computer software and related services, which is consistent with how our chief operating decision maker (“CODM”) reviews and manages our business.
Current wording
Bentley Systems is the infrastructure engineering software company. Our purpose is to advance the world’s infrastructure for better quality of life. Our mission is to reshape how infrastructure systems and critical resources are delivered and optimized. We manage our business globally within one reportable segment, the development and marketing of computer software and related services, which is consistent with how our chief operating decision maker (“CODM”) reviews and manages our business.
Previous wording
•Total revenues were $1,353,095 for the year ended December 31, 2024, up 10.1% or 10.3% on a constant currency basis(1) compared to the prior year;
Current wording
•Total revenues were $1,501,779 for the year ended December 31, 2025, up 11.0% or 10.1% on a constant currency basis(1) compared to the prior year;
Previous wording
•Subscriptions revenues were $1,223,362 for the year ended December 31, 2024, up 13.2% or 13.4% on a constant currency basis(1) compared to the prior year;
Current wording
•Subscriptions revenues were $1,376,696 for the year ended December 31, 2025, up 12.5% or 11.7% on a constant currency basis(1) compared to the prior year;
Previous wording
•ARR(2) was $1,283,256 as of December 31, 2024, compared to $1,174,774 as of December 31, 2023, representing a constant currency(1) ARR growth rate(2) of 12%;
Current wording
•ARR(2) was $1,462,145 as of December 31, 2025, compared to $1,283,256 as of December 31, 2024; Constant currency(1) ARR growth rate(2) was 11.5%;
Previous wording
•Last twelve-month recurring revenues dollar-based net retention rate(2) was 110% as of December 31, 2024, compared to 109% as of December 31, 2023;
Current wording
•Last twelve-month recurring revenues dollar-based net retention rate(2) was 109% as of December 31, 2025, compared to 110% as of December 31, 2024;
Previous wording
•Operating income was $302,150 for the year ended December 31, 2024, compared to $230,542 for the prior year;
Current wording
•Operating income was $362,621 for the year ended December 31, 2025, compared to $302,150 for the prior year;
Previous wording
•Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”)(1) was $372,222 for the year ended December 31, 2024, compared to $324,677 for the prior year; and
Current wording
•Adjusted operating income less stock-based compensation expense (“AOI less SBC”) (previously titled Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”))(1) was $429,917 for the year ended December 31, 2025, compared to $372,222 for the prior year; and
Previous wording
•Cash flows from operations was $435,292 for the year ended December 31, 2024, compared to $416,696 for the prior year.
Current wording
•Cash flows from operating activities were $538,464 for the year ended December 31, 2025, compared to $435,292 for the prior year.
Previous wording
(1)Constant currency and Adjusted OI w/SBC are non‑GAAP financial measures. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definitions and our uses of constant currency and Adjusted OI w/SBC.
Current wording
(1)Constant currency and AOI less SBC are non‑GAAP financial measures. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definitions and our uses of constant currency and AOI less SBC.
Previous wording
Our results of operations have been, and in the future will be, affected by changes in foreign currency exchange rates. For the years ended December 31, 2024, 2023, and 2022, approximately 34%, 35%, and 36%, respectively, of our total revenues and 42%, 45%, and 46%, respectively, of our total operating expenses were denominated in a currency other than the U.S. dollar including most significantly: euros, British pounds, Canadian dollars, Australian dollars, Chinese yuan renminbi, and New Zealand dollars. Other than the natural hedge attributable to matching revenues and expenses in the same currencies, we do not currently hedge foreign currency exposure.
Current wording
Our results of operations have been, and in the future will be, affected by changes in foreign currency exchange rates. For the years ended December 31, 2025, 2024, and 2023, approximately 33%, 34%, and 35%, respectively, of our total revenues and 45%, 42%, and 45%, respectively, of our total operating expenses were denominated in a currency other than the U.S. dollar including most significantly: euros, British pounds, Canadian dollars, Australian dollars, Chinese yuan renminbi, and New Zealand dollars. Other than the natural hedge attributable to matching revenues and expenses in the same currencies, we do not currently hedge foreign currency exposure. Additionally, because we have operations in, and derive revenue from, geographies around the world, we will continue to monitor the impact of tariffs and other trade policies on our business and the businesses of our accounts, as well as on our financial condition, results of operations, and/or cash flows.
Previous wording
We generate revenues from subscriptions, perpetual licenses, and services. Our total revenues are diversified by account type, size, and geography. Our sources of revenue growth, excluding the impact from acquisitions, primarily come from additional subscriptions revenues from existing accounts using the same products and represent the majority of our revenue growth, additional subscriptions revenues from existing accounts using new products, and subscriptions revenues from new accounts. We believe that we have a loyal account base, with over 70% of our total revenues for the years ended December 31, 2024, 2023, and 2022 generated from organizations that have been our accounts for over ten years.
Current wording
We generate revenues from subscriptions, perpetual licenses, and services. Our total revenues are diversified by account type, size, and geographic region. The majority of our revenue growth, excluding the impact from acquisitions, is driven by additional subscriptions revenues from existing accounts using the same products. To a lesser extent, our revenue growth is attributable to subscriptions revenues from new accounts and subscriptions revenues from existing accounts using new products. We believe that we have a loyal account base, with over 70% of our total revenues for the years ended December 31, 2025, 2024, and 2023 generated from organizations that have been our accounts for over ten years.
Previous wording
The increase in total revenues for the year ended December 31, 2024 was driven by an increase in subscriptions revenues, partially offset by decreases in services revenues.
Current wording
The increase in total revenues for the year ended December 31, 2025 was primarily driven by an increase in subscriptions revenues, partially offset by a decrease in services revenues.
Previous wording
Subscriptions. For the year ended December 31, 2024, the increase in subscriptions revenues was primarily driven by improvements in our business performance of $143,055 ($144,846 on a constant currency basis). Our business performance includes the impact from programmatic acquisitions, which generally are immaterial, individually and in the aggregate.
Current wording
Subscriptions. For the year ended December 31, 2025, the increase in subscriptions revenues was driven by improvements in our business performance of $153,334 ($142,592 on a constant currency basis). Our business performance includes the impact from programmatic acquisitions, which generally are immaterial, individually and in the aggregate.
Previous wording
For the year ended December 31, 2024, the improvements in business performance were primarily driven by expansion from accounts with revenues in the prior period (“existing accounts”), and growth of 3% attributable to new accounts, most notably small- and medium-sized accounts. Improvements in business performance for the year ended December 31, 2024 were led by our engineering applications, followed by Seequent geoprofessional applications, and our Bentley Infrastructure Cloud for project delivery.
Current wording
For the year ended December 31, 2025, the improvements in business performance were primarily driven by expansion from accounts with revenues in the prior period (“existing accounts”), and growth of 2.5% attributable to new accounts, most notably small- and medium-sized accounts. Improvements in business performance for the year ended December 31, 2025 were led by Bentley Open Applications, followed by Seequent applications, and Bentley Infrastructure Cloud.
Previous wording
Services. For the year ended December 31, 2024, the decrease in services revenues was driven by a decline in our business performance of $18,296 ($18,526 on a constant currency basis), driven primarily from weakness in Maximo-related work within our digital integrator, Cohesive.
Current wording
Services. For the year ended December 31, 2025, the decrease in services revenues was driven by a decline in our business performance of $4,869 ($5,548 on a constant currency basis), primarily due to the winding down of a large services project in the beginning of 2025.
Previous wording
Americas. For the year ended December 31, 2024, the increase in revenues from the Americas was primarily driven by improvements in our business performance of $66,076 ($68,067 on a constant currency basis).
Current wording
Americas. For the year ended December 31, 2025, the increase in revenues from the Americas was primarily driven by improvements in our business performance of $73,493 ($74,816 on a constant currency basis).
Previous wording
The improvements in business performance for the year ended December 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S., partially offset by a decline in services revenues.
Current wording
The improvements in business performance for the year ended December 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S., as well as increases in our subscriptions revenues from new accounts.
Previous wording
EMEA. For the year ended December 31, 2024, the increase in revenues from EMEA was primarily driven by improvements in our business performance of $34,834 ($32,195 on a constant currency basis).
Current wording
EMEA. For the year ended December 31, 2025, the increase in revenues from EMEA was primarily driven by improvements in our business performance of $48,444 ($35,754 on a constant currency basis).
Previous wording
The improvements in business performance for the year ended December 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom (“U.K.”), the Middle East, and Africa, partially offset by a decline in services revenues.
Current wording
The improvements in business performance for the year ended December 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom (“U.K.”) and the Middle East, as well as increases in our subscriptions revenues from new accounts, partially offset by a decline in services revenues.
Previous wording
APAC. For the year ended December 31, 2024, the increase in revenues from APAC was primarily driven by improvements in our business performance of $23,772 ($26,308 on a constant currency basis).
Current wording
APAC. For the year ended December 31, 2025, the increase in revenues from APAC was primarily driven by improvements in our business performance of $26,747 ($26,524 on a constant currency basis).
Previous wording
For the years ended December 31, 2024, 2023, and 2022, approximately 80% of our aggregate cost of revenues, research and development, selling and marketing, and general and administrative expenses were represented by what we refer to herein as “headcount‑related” costs. These costs primarily include salaries, benefits, bonuses, stock‑based compensation expense, employment taxes, travel, training, and realignment of our colleagues, and third‑party personnel expenses and related overhead. Our headcount‑related costs are variable in nature. We actively manage these costs to align to our trending run rate of revenue performance, with the objective of enhancing visibility and predictability of resulting operating profit margins.
Current wording
For the years ended December 31, 2025, 2024, and 2023, approximately 80% of our aggregate cost of revenues, research and development, selling and marketing, and general and administrative expenses were represented by what we refer to herein as “headcount‑related” costs. These costs primarily include salaries, benefits, bonuses, stock‑based compensation expense, employment taxes, travel, training, and realignment and optimization of our colleagues, and third‑party personnel expenses and related overhead. Our headcount‑related costs are variable in nature. We actively manage these costs to align to our trending run rate of revenue performance, with the objective of enhancing visibility and predictability of resulting operating profit margins.
Previous wording
During the fourth quarter of 2023, the Company approved a strategic realignment program to better serve our accounts and to better align resources with the strategy of the business, including reinvestment in go-to-market functions, as well as in AI in product development (the “2023 Program”). The realignment program resulted in realignment costs of $847 and $12,579 for the years ended December 31, 2024 and 2023, respectively, which represent termination benefits for colleagues whose roles were impacted (less than five percent of total headcount). See Note 21 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K for additional information. The realignment program activities have been broadly implemented across our various businesses, which were substantially completed by the end of the second quarter of 2024, and payment of termination benefits were completed as of December 31, 2024. The impact of the realignment program on headcount-related costs for the year ended December 31, 2024 and 2023 is included in our discussion below.
Current wording
During the fourth quarter of 2023, we approved a strategic realignment program to better serve our accounts and to better align resources with the strategy of the business, including reinvestment in go-to-market functions, as well as in AI in product development (the “2023 Program”). The realignment program resulted in realignment costs of $847 and $12,579 for the years ended December 31, 2024 and 2023, respectively, which represent termination benefits for colleagues whose roles were impacted (less than five percent of total headcount). See Note 21 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K for additional information. The 2023 Program activities, including payments of termination benefits, were completed as of December 31, 2024.
Previous wording
Cost of subscriptions and licenses. Cost of subscriptions and licenses expenses primarily include headcount‑related costs, as well as cloud‑related costs incurred for servicing our accounts using cloud provisioned solutions and our license administration platform. Cost of subscriptions and licenses expenses also include channel partner compensation for providing sales coverage to users, depreciation of property and equipment, amortization of capitalized software costs associated with servicing software subscriptions and our Accelerated Commercial Development Program (“ACDP”), and amortization of intangible assets associated with acquired software and technology.
Current wording
Cost of subscriptions and licenses. Cost of subscriptions and licenses expenses primarily include headcount‑related costs, as well as cloud‑related costs incurred for servicing our accounts using cloud provisioned offerings and our license administration platform. Cost of subscriptions and licenses expenses also include channel partner compensation for providing sales coverage to users, depreciation of property and equipment, amortization of capitalized software costs associated with servicing software subscriptions and our Accelerated Commercial Development Program (“ACDP”), and amortization of intangible assets associated with acquired software and technology.
Previous wording
For the year ended December 31, 2024, on a constant currency basis, cost of subscriptions and licenses expenses increased primarily due to an increase in cloud‑related costs of $10,859. Partially offsetting this increase was lower amortization of capitalized costs under our ACDP of $3,983 as compared to the prior year and lower headcount‑related costs of $2,090 primarily due to lower stock‑based compensation expense.
Current wording
For the year ended December 31, 2025, on a constant currency basis, cost of subscriptions and licenses expenses increased primarily due to an increase in headcount‑related costs of $15,149, mainly due to an increase in annual and other compensation costs, and an increase in cloud-related costs of $10,007.
Previous wording
For the year ended December 31, 2024, on a constant currency basis, cost of services expenses decreased primarily due to a decrease in headcount‑related costs of $12,514, mainly due to a reduction in third‑party personnel costs.
Current wording
For the year ended December 31, 2025, on a constant currency basis, cost of services expenses decreased primarily due to a decrease in headcount‑related costs of $6,718, mainly due to a reduction in third‑party personnel costs, and to a lesser extent, lower annual and other compensation costs.
Previous wording
Research and development. Research and development expenses primarily consist of headcount‑related costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external accounts, before technological feasibility is reached, which is generally shortly before the release of such products. Our research and development roadmap balances technology advances and new offerings with continuous enhancements to existing offerings. Our allocation of research and development resources is based on a cost‑benefit analysis of acquiring available technology in the marketplace versus developing our own solutions. We anticipate that we will continue to make substantial investments in research and development because we believe the infrastructure engineering software market presents compelling opportunities for the application of new technologies that advance our current solutions.
Current wording
Research and development. Research and development expenses primarily consist of headcount‑related costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external accounts, before technological feasibility is reached, which is generally shortly before the release of such products. Our research and development roadmap balances technology advances and new offerings with continuous enhancements to existing offerings. Our allocation of research and development resources is based on a cost‑benefit analysis of acquiring available technology in the marketplace versus developing our own software. We anticipate that we will continue to make substantial investments in research and development because we believe the infrastructure engineering software market presents compelling opportunities for the application of new technologies that advance our current offerings.
Previous wording
For the year ended December 31, 2024, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount‑related costs of $23,408, mainly due to an increase in annual and other compensation costs, and an increase in third-party personnel costs primarily related to our marketing activities. Additionally, selling and marketing expenses further increased due to an increase in promotional costs of $5,449.
Current wording
For the year ended December 31, 2025, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount‑related costs of $24,174, mainly due to increases in headcount, and annual and other compensation costs, and an increase in promotional costs of $6,216. Headcount‑related costs for the year ended December 31, 2024 were lower due to run‑rate savings as a result of the 2023 Program.
Previous wording
Interest expense, net primarily represents interest associated with credit facility borrowings, the 2026 Notes, the 2027 Notes, amortization of deferred debt issuance costs, and interest income from our investments in money market funds. The majority of our debt is protected from rising interest rates, through either very low fixed coupon interest on our convertible notes or our $200,000 interest rate swap, which expires in 2030.
Current wording
Interest expense, net primarily represents interest expense on our credit facility borrowings and outstanding convertible senior notes, amortization of deferred debt issuance costs, and interest income from our investments in money market funds. The majority of our debt is protected from rising interest rates, through either very low fixed coupon interest on our convertible notes or our $200,000 interest rate swap, which expires in 2030.
Previous wording
For the year ended December 31, 2024, interest expense, net decreased primarily due to lower weighted average debt outstanding, as compared to the prior year, mainly related to the continued pay down of our revolving loan borrowings, and repayments of our senior secured term loan during 2024 under our amended and restated credit agreement, entered into on December 19, 2017 (the “2017 Credit Facility”).
Current wording
For the year ended December 31, 2025, interest expense, net decreased primarily due to lower weighted average debt outstanding under the credit facilities as compared to the prior year.
Previous wording
(1)Foreign exchange gain (loss) is primarily attributable to foreign currency translation derived mainly from U.S. dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries.
Current wording
(1)Foreign exchange gain is primarily attributable to foreign currency translation derived mainly from U.S. dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries.
Previous wording
(2)Other income (expense), net for the year ended December 31, 2023 includes investment impairment and other charges of $(16,988), partially offset by gains on investments of $2,360.
Current wording
(2)Other income (expense), net for the year ended December 31, 2023 includes non-marketable equity investment impairment and other charges of $(16,988), partially offset by gains on non-marketable equity investments of $2,360.
Previous wording
For the year ended December 31, 2024, the effective tax rate was higher as compared to the year ended December 31, 2023 primarily due to the discrete tax benefit recognized as a result of the internal legal entity restructuring during the fourth quarter of 2023 described below, as well as a decrease in discrete tax benefits related to stock‑based compensation, net of the impact from officer compensation limitation provisions, partially offset by the decrease in the adverse effective tax rate impact of the net tax on foreign earnings. The decrease in net tax on foreign earnings is primarily related to increased foreign creditable taxes available to reduce the net impact of the U.S. Global Intangible Low‑Taxed Income (“GILTI”) inclusion. For the years ended December 31, 2024 and 2023, we recorded discrete tax benefits of $5,583 and $14,648, respectively, associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
Current wording
For the year ended December 31, 2025, the effective tax rate was higher as compared to the year ended December 31, 2024 primarily due to the decrease in tax benefits related to stock‑based compensation, net of the impact from officer compensation limitation provisions, recognized in the current year.
Previous wording
ARR resulting from the annualization of recurring contracts with consumption measurement durations of less than one year, as a percentage of total ARR, was 50%, 47%, and 43% as of December 31, 2024, 2023, and 2022, respectively, with our E365 subscription offering representing 45%, 41%, and 35% of total ARR as of December 31, 2024, 2023, and 2022, respectively.
Current wording
ARR resulting from the annualization of recurring contracts with consumption measurement durations of less than one year, as a percentage of total ARR, was 51%, 50%, and 47% as of December 31, 2025, 2024, and 2023, respectively, with our E365 subscription offering representing 46%, 45%, and 41% of total ARR as of December 31, 2025, 2024, and 2023, respectively.
Previous wording
The last twelve‑months recurring revenues for the periods ended December 31, 2024, 2023, and 2022 compared to the last twelve‑months of the comparative twelve‑month period increased by $141,327, $118,653, and $143,874, respectively. This increase was primarily due to growth in ARR, which is primarily the result of growing our recurring revenues within our existing accounts as expressed in our recurring revenues dollar‑based net retention rate, as well as additional recurring revenues resulting from new accounts and acquisitions, including the favorable impact from our platform acquisitions of PLS and Seequent. For the twelve months ended December 31, 2024, 2023, and 2022, 91%, 89%, and 89%, respectively, of our revenues were recurring revenues.
Current wording
The last twelve‑months recurring revenues for the periods ended December 31, 2025, 2024, and 2023 compared to the last twelve‑months of the comparative twelve‑month period increased by $153,346, $141,327, and $118,653, respectively. This increase was primarily due to growth in ARR, which is primarily the result of growing our recurring revenues within our existing accounts as expressed in our recurring revenues dollar‑based net retention rate, as well as additional recurring revenues resulting from new accounts and acquisitions. For the twelve months ended December 31, 2025, 2024, and 2023, 93%, 91%, and 89%, respectively, of our revenues were recurring revenues.
Previous wording
Given that recurring revenues represented 91%, 89%, and 89% of our total revenues for the twelve months ended December 31, 2024, 2023, and 2022, respectively, this metric helps explain our revenue performance as primarily growth from existing accounts.
Current wording
Given that recurring revenues represented 93%, 91%, and 89% of our total revenues for the twelve months ended December 31, 2025, 2024, and 2023, respectively, this metric helps explain our revenue performance as primarily growth from existing accounts.
Previous wording
Adjusted OI w/SBC is a non-GAAP financial measure and is used to measure the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business.
Current wording
AOI less SBC is a non-GAAP financial measure and is used to measure the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business.
Previous wording
Adjusted OI w/SBC is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, and realignment expenses (income), for the respective periods.
Current wording
AOI less SBC is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash‑settled retention incentives provided to key employees of acquired companies), and realignment expenses (income), for the respective periods.
Previous wording
Adjusted OI w/SBC is our primary performance measure, which excludes certain expenses and charges, including the non-cash amortization expense resulting from the acquisition of intangible assets, as we believe these may not be indicative of our core business operating results. We intentionally include stock-based compensation expense in this measure as we believe it better captures the economic costs of our business.
Current wording
AOI less SBC is our primary performance measure, which excludes certain expenses and charges, including the non-cash amortization expense resulting from the acquisition of intangible assets, as we believe these may not be indicative of our core business operating results. We intentionally include stock-based compensation expense in this measure as we believe it better captures the economic costs of our business.
Previous wording
Adjusted operating income is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), and stock‑based compensation expense, for the respective periods.
Current wording
Adjusted operating income is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash‑settled retention incentives provided to key employees of acquired companies), realignment expenses (income), and stock‑based compensation expense, for the respective periods.
Previous wording
Reconciliation of operating income to Adjusted OI w/SBC and to Adjusted operating income:
Current wording
Reconciliation of operating income to AOI less SBC and to Adjusted operating income:
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Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(1)Constant currency is a non‑GAAP financial measure. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Current report — wording carried from elsewhere
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Current report — wording carried from elsewhere
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Current report — wording carried from elsewhere
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency growth rates.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Intangible assets other than goodwill are tested annually for impairment on October 1, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value below its carrying amount.