Bentley Systems Announces Third Quarter 2025 Results

EXTON, Pa.--(BUSINESS WIRE)--Nov. 5, 2025-- Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced results for the quarter ended September 30, 2025. Third Quarter 2025 Results Total revenues were $375.5 million, up 12.0% or 10.6% on a constant currency basis, year-over-year; Subscriptions revenues were $344.3 million, up 13.5% or 12.1% on a constant currency basis, year-over-year; Annualized Recurring Revenues (“ARR”) were $1,405.2 million as of September 30, 2025, compared to $1,270.7 million as of September 30, 2024, representing a constant currency ARR growth rate of 10.5%; Last twelve-month recurring revenues dollar-based net retention rate was 109%, consistent with the same period last year; Operating income margin was 22.5%, compared to 20.5% for the same period last year; Adjusted operating income less stock-based compensation expense (“AOI less SBC”) margin was 27.7%, compared to 26.7% for the same period last year; Net income per diluted share was $0.18, compared to $0.13 for the same period last year; Adjusted net income per diluted share (“Adjusted EPS”) was $0.27, compared to $0.24 for the same period last year; Cash flows from operations was $116.4 million, compared to $86.1 million for the same period last year; and Free cash flow was $110.7 million, compared to $84.3 million for the same period last year. Nine Months Ended September 30, 2025 Results Total revenues were $1,110.2 million, up 10.7% or 10.3% on a constant currency basis, year-over-year; Subscriptions revenues were $1,020.1 million, up 12.4% or 12.0% on a constant currency basis, year-over-year; Operating income margin was 25.6%, compared to 24.0% for the same period last year; AOI less SBC margin was 30.2%, compared to 29.6% for the same period last year; Net income per diluted share was $0.67, compared to $0.57 for the same period last year; Adjusted EPS was $0.94, compared to $0.86 for the same period last year; Cash flows from operations was $396.9 million, compared to $353.7 million for the same period last year; and Free cash flow was $384.0 million, compared to $345.2 million for the same period last year. Executive Chair Greg Bentley said, “To start with, I commend our management for 25Q3 execution which continues the steady progression within our annual outlook. But of greater significance, I think: our product announcements during the quarter, and ongoing strategic developments for Infrastructure AI advancement, create new opportunities to creatively broaden consumption and value generation of our software and cloud services. As we augment our traditional attended consumption with emerging programmatic A(P)I consumption, and when asset consumption reaches critical mass, our accounts (and, prospects) also have much to gain.” CEO Nicholas Cumins said, “AI was top of mind at our Year in Infrastructure conference, where we engaged with industry leaders on its potential to help close the engineering capacity gap and deliver the infrastructure the world needs. Our Going Digital Award submissions illustrated how users are already applying AI in meaningful ways, and we unveiled new AI capabilities across our portfolio—underscoring Bentley’s comprehensive and principled approach to Infrastructure AI. We are excited about the long-term opportunity AI represents for our users and for Bentley. “Our third quarter results reflected strong execution and consistent growth drivers across commercial models, regions, and infrastructure sectors. Demand for infrastructure engineering remains robust, and project pipelines are full.” CFO Werner Andre said, “Solid 25Q3 results, in line with our expectations, position us well with respect to our full-year financial outlook. Year-over-year, we achieved constant-currency ARR growth of 10.5%, while our mainstay subscription revenue, now 92% of total revenues, grew 12% in constant currency. Our strong margin and cash flow performance for the quarter, and for 2025 to date, puts us on track for another year of purposeful compounding for both of those metrics. Along with addressing our maturing convertible debt, our balance sheet strength and reliable cash flow generation provide sufficient capacity for stock repurchases to offset stock-based compensation dilution, our modest dividend, and to support long-term growth including potential acquisitions.” Call Details Bentley Systems will host a live Zoom video webinar on November 5, 2025 at 8:15 a.m. EST to discuss results for its third quarter ended September 30, 2025. Those wishing to participate should access the live Zoom video webinar of the event through a direct registration link at https://bentley-com.zoom.us/webinar/register/WN_kr3zivJeRfe-VQRmhqTGKg#/registration. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at https://investors.bentley.com. In addition, a replay and transcript will be available after the conclusion of the live event on Bentley Systems’ Investor Relations website for one year. Non-GAAP Financial Measures In this press release, we sometimes refer to financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these measures are considered non-GAAP financial measures under the United States Securities and Exchange Commission (“SEC”) regulations. Those rules require the supplemental explanations and reconciliations that are in Bentley Systems’ Form 8-K (Quarterly Earnings Release) furnished to the SEC. Forward-Looking Statements This press release includes forward-looking statements regarding the future results of operations and financial condition, business strategy, and plans and objectives for future operations of Bentley Systems, Incorporated (the “Company,” “we,” “us,” and words of similar import). All such statements contained in this press release, other than statements of historical facts, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations, projections, and assumptions about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, and there are a significant number of factors that could cause actual results to differ materially from statements made in this press release including: adverse changes in global economic and/or political conditions; the impact of tariffs and related policies on our business and the businesses of the industries we serve; the impact of current and future sanctions, embargoes and other similar laws at the state and/or federal level that impose restrictions on our counterparties or upon our ability to operate our business within the subject jurisdictions; political, economic, regulatory and public health and safety risks and uncertainties in the countries and regions in which we operate; failure to retain personnel necessary for the operation of our business or those that we acquire; failure to effectively manage succession; changes in the industries in which our accounts operate; the competitive environment in which we operate; the quality of our products; our ability to develop and market new products to address our accounts’ rapidly changing technological needs; changes in capital markets and our ability to access financing on terms satisfactory to us or at all; the impact of changing or uncertain interest rates on us and on the industries we serve; our ability to integrate acquired businesses successfully; and our ability to identify and consummate future investments and/or acquisitions on terms satisfactory to us or at all. Further information on potential factors that could affect the financial results of the Company are included in the Company’s Form 10‑K and subsequent Form 10‑Qs, which are on file with the SEC. The Company disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. About Bentley Systems Around the world, infrastructure professionals rely on software from Bentley Systems to help them design, build, and operate better and more resilient infrastructure for transportation, water, energy, cities, and more. Founded in 1984 by engineers for engineers, Bentley is the partner of choice for engineering firms and owner-operators worldwide, with software that spans engineering disciplines, industry sectors, and all phases of the infrastructure lifecycle. Through our digital twin solutions, we help infrastructure professionals unlock the value of their data to transform project delivery and asset performance. © 2025 Bentley Systems, Incorporated. Bentley, and the Bentley logo are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners. BENTLEY SYSTEMS, INCORPORATED Consolidated Balance Sheets (in thousands) (unaudited) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 165,411 $ 64,009 Accounts receivable 293,942 322,862 Allowance for doubtful accounts (7,776 ) (8,395 ) Prepaid income taxes 17,337 13,066 Prepaid and other current assets 57,916 50,531 Total current assets 526,830 442,073 Property and equipment, net 35,176 33,798 Operating lease right-of-use assets 31,099 32,303 Intangible assets, net 181,022 213,959 Goodwill 2,410,308 2,367,179 Investments 27,690 25,764 Deferred income taxes 176,376 198,286 Other assets 75,947 86,445 Total assets $ 3,464,448 $ 3,399,807 Liabilities and Equity Current liabilities: Accounts payable $ 17,841 $ 16,479 Accruals and other current liabilities 158,299 169,522 Cloud Services Subscription deposits 427,750 366,895 Deferred revenues 234,824 245,729 Operating lease liabilities 11,797 11,656 Income taxes payable 9,944 4,053 Current portion of long-term debt — — Total current liabilities 860,455 814,334 Long-term debt 1,247,378 1,388,088 Deferred compensation plan liabilities 104,857 96,684 Long-term operating lease liabilities 24,072 26,894 Deferred revenues 17,904 16,641 Deferred income taxes 9,350 8,612 Income taxes payable — 3,615 Other liabilities 5,082 3,819 Total liabilities 2,269,098 2,358,687 Equity: Common stock 3,034 3,020 Additional paid-in capital 1,283,584 1,217,986 Accumulated other comprehensive loss (77,445 ) (104,078 ) Accumulated deficit (13,870 ) (75,941 ) Total Bentley Systems stockholders’ equity 1,195,303 1,040,987 Noncontrolling interest 47 133 Total equity 1,195,350 1,041,120 Total liabilities and equity $ 3,464,448 $ 3,399,807 BENTLEY SYSTEMS, INCORPORATED Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenues: Subscriptions $ 344,293 $ 303,239 $ 1,020,063 $ 907,772 Perpetual licenses 10,913 11,274 31,898 31,649 Subscriptions and licenses 355,206 314,513 1,051,961 939,421 Services 20,343 20,660 58,236 63,852 Total revenues 375,549 335,173 1,110,197 1,003,273 Cost of revenues: Cost of subscriptions and licenses 53,824 44,220 148,080 126,870 Cost of services 18,371 20,612 58,550 62,985 Total cost of revenues 72,195 64,832 206,630 189,855 Gross profit 303,354 270,341 903,567 813,418 Operating expenses: Research and development 78,751 70,068 226,586 204,148 Selling and marketing 72,107 64,940 205,039 176,455 General and administrative 53,818 51,359 150,903 152,695 Deferred compensation plan 6,033 6,983 12,371 13,665 Amortization of purchased intangibles 8,148 8,361 24,557 25,717 Total operating expenses 218,857 201,711 619,456 572,680 Income from operations 84,497 68,630 284,111 240,738 Interest expense, net (2,727 ) (4,669 ) (10,054 ) (16,289 ) Other income (expense), net 1,937 (5,087 ) 790 4,330 Income before income taxes 83,707 58,874 274,847 228,779 Provision for income taxes (26,256 ) (16,522 ) (55,620 ) (44,099 ) Equity in net (losses) income of investees, net of tax (162 ) (14 ) (100 ) 14 Net income 57,289 42,338 219,127 184,694 Less: Net income (loss) attributable to noncontrolling interest (84 ) — (96 ) — Net income attributable to Bentley Systems $ 57,373 $ 42,338 $ 219,223 $ 184,694 Net income per share attributable to Bentley Systems stockholders: Basic $ 0.18 $ 0.13 $ 0.70 $ 0.59 Diluted $ 0.18 $ 0.13 $ 0.67 $ 0.57 Weighted average shares: Basic 314,626,191 315,207,216 314,826,779 314,820,679 Diluted 333,277,478 333,789,636 333,214,695 333,724,425 BENTLEY SYSTEMS, INCORPORATED Consolidated Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 219,127 $ 184,694 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization, and impairment 50,125 48,397 Deferred income taxes 23,339 7,056 Stock-based compensation expense 55,037 57,856 Deferred compensation plan 12,371 13,665 Amortization of deferred debt issuance costs 5,682 5,554 Change in fair value of derivative 9,293 5,570 Foreign currency remeasurement loss (gain) 1,194 (126 ) Other (1,154 ) (1,733 ) Changes in assets and liabilities, net of effect from acquisitions: Accounts receivable 40,813 34,588 Prepaid and other assets 2,128 (9,952 ) Accounts payable, accruals, and other liabilities (36,984 ) (20,984 ) Cloud Services Subscription deposits 42,359 57,340 Deferred revenues (24,369 ) (31,512 ) Income taxes payable, net of prepaid income taxes (2,085 ) 3,247 Net cash provided by operating activities 396,876 353,660 Cash flows from investing activities: Purchases of property and equipment and investment in capitalized software (12,836 ) (8,499 ) Acquisitions, net of cash acquired — (128,774 ) Purchases of investments (938 ) (807 ) Other — 2,400 Net cash used in investing activities (13,774 ) (135,680 ) Cash flows from financing activities: Proceeds from credit facilities 258,750 233,281 Payments of credit facilities (394,065 ) (207,608 ) Repurchase of convertible senior notes (9,797 ) — Repayments of term loan — (140,000 ) Payments of contingent and non-contingent consideration (310 ) (3,022 ) Payments of dividends (63,756 ) (53,985 ) Proceeds from stock purchases under employee stock purchase plan 11,534 11,228 Proceeds from exercise of stock options — 4,007 Payments for shares acquired including shares withheld for taxes (28,382 ) (11,199 ) Repurchases of Class B common stock under approved program (65,029 ) (45,769 ) Other (152 ) (151 ) Net cash used in financing activities (291,207 ) (213,218 ) Effect of exchange rate changes on cash and cash equivalents 9,507 (999 ) Increase in cash and cash equivalents 101,402 3,763 Cash and cash equivalents, beginning of period 64,009 68,412 Cash and cash equivalents, end of period $ 165,411 $ 72,175 BENTLEY SYSTEMS, INCORPORATED Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except share and per share data) (unaudited) Reconciliation of operating income to AOI less SBC and to Adjusted operating income: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Operating income $ 84,497 $ 68,630 $ 284,111 $ 240,738 Amortization of purchased intangibles 11,339 11,448 34,188 35,159 Deferred compensation plan 6,033 6,983 12,371 13,665 Acquisition expenses 2,157 2,454 4,799 6,782 Realignment expenses — 9 — 818 AOI less SBC 104,026 89,524 335,469 297,162 Stock-based compensation expense 17,873 15,895 54,497 57,088 Adjusted operating income $ 121,899 $ 105,419 $ 389,966 $ 354,250 Reconciliation of net income attributable to Bentley Systems to Adjusted net income: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 $ EPS(1) $ EPS(1) $ EPS(1) $ EPS(1) Net income attributable to Bentley Systems $ 57,373 $ 0.18 $ 42,338 $ 0.13 $ 219,223 $ 0.67 $ 184,694 $ 0.57 Non-GAAP adjustments, prior to income taxes: Amortization of purchased intangibles 11,339 0.03 11,448 0.03 34,188 0.10 35,159 0.11 Stock-based compensation expense 17,873 0.05 15,895 0.05 54,497 0.16 57,088 0.17 Deferred compensation plan 6,033 0.02 6,983 0.02 12,371 0.04 13,665 0.04 Acquisition expenses 2,157 0.01 2,454 0.01 4,799 0.01 6,782 0.02 Realignment expenses — — 9 — — — 818 — Other (income) expense, net (1,937 ) (0.01 ) 5,087 0.02 (790 ) — (4,330 ) (0.01 ) Total non-GAAP adjustments, prior to income taxes 35,465 0.11 41,876 0.13 105,065 0.32 109,182 0.33 Income tax effect of non-GAAP adjustments (4,842 ) (0.01 ) (6,756 ) (0.02 ) (16,175 ) (0.05 ) (11,600 ) (0.03 ) Equity in net losses (income) of investees, net of tax 162 — 14 — 100 — (14 ) — Adjusted net income(2) $ 88,158 $ 0.27 $ 77,472 $ 0.24 $ 308,213 $ 0.94 $ 282,262 $ 0.86 Adjusted diluted weighted average shares 333,277,478 333,789,636 333,214,695 333,724,425 _________________________ (1) Adjusted EPS was computed independently for each reconciling item presented; therefore, the sum of Adjusted EPS for each line item may not equal total Adjusted EPS due to rounding. (2) Adjusted EPS numerator includes $1,721 and $1,723 for the three months ended September 30, 2025 and 2024, respectively, and $5,005 and $5,164 for the nine months ended September 30, 2025 and 2024, respectively, related to interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method. Reconciliation of cash flows from operations to free cash flow: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Cash flows from operations $ 116,376 $ 86,105 $ 396,876 $ 353,660 Purchases of property and equipment and investment in capitalized software (5,701 ) (1,810 ) (12,836 ) (8,499 ) Free cash flow $ 110,675 $ 84,295 $ 384,040 $ 345,161 Reconciliation of cash flows from operations to Adjusted EBITDA: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Cash flows from operations $ 116,376 $ 86,105 $ 396,876 $ 353,660 Cash interest 2,520 3,424 5,844 12,130 Cash taxes 4,320 10,176 34,027 33,023 Cash deferred compensation plan distributions — — 3,766 2,436 Cash acquisition expenses 4,902 1,829 9,354 5,571 Cash realignment costs — 1,118 — 12,606 Changes in operating assets and liabilities 3,512 9,801 (37,039 ) (44,718 ) Other(1) (1,908 ) (2,452 ) (5,646 ) (7,220 ) Adjusted EBITDA $ 129,722 $ 110,001 $ 407,182 $ 367,488 _________________________ (1) Includes receipts related to interest rate swap. Reconciliation of total revenues and subscriptions revenues to total revenues and subscriptions revenues in constant currency: Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Actual Impact of Foreign Exchange at 2024 Rates Constant Currency Actual Impact of Foreign Exchange at 2024 Rates Constant Currency Total revenues $ 375,549 $ (4,553 ) $ 370,996 $ 335,173 $ 197 $ 335,370 Subscriptions revenues $ 344,293 $ (4,233 ) $ 340,060 $ 303,239 $ 212 $ 303,451 Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Actual Impact of Foreign Exchange at 2024 Rates Constant Currency Actual Impact of Foreign Exchange at 2024 Rates Constant Currency Total revenues $ 1,110,197 $ (4,379 ) $ 1,105,818 $ 1,003,273 $ (480 ) $ 1,002,793 Subscriptions revenues $ 1,020,063 $ (4,091 ) $ 1,015,972 $ 907,772 $ (461 ) $ 907,311 Explanation of Non-GAAP and Other Financial Measures Constant currency Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated effects of foreign currency exchange rate fluctuations. A significant amount of our operations is conducted in foreign currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance. In reporting period‑over‑period results, except for ARR as discussed further below, we calculate the effects of foreign currency fluctuations and constant currency information by translating current and prior period results on a transactional basis to our reporting currency using prior period average foreign currency exchange rates in which the transactions occurred. Recurring revenues Recurring revenues are the basis for our other revenue-related key business metrics. We believe this measure is useful in evaluating our ability to consistently retain and grow our revenues from accounts with revenues in the prior period (“existing accounts”). Recurring revenues are subscriptions revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and professional services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions. Annualized recurring revenues (“ARR”) ARR is a key business metric that we believe is useful in evaluating the scale and growth of our business as well as to assist in the evaluation of underlying trends in our business. Furthermore, we believe ARR, considered in connection with our last twelve‑month recurring revenues dollar‑based net retention rate, is a leading indicator of revenue growth. ARR is defined as the sum of the annualized value of our portfolio of contracts that produce recurring revenues as of the last day of the reporting period, and the annualized value of the last three months of recognized revenues for our contractually recurring consumption‑based software subscriptions with consumption measurement durations of less than one year, calculated using the spot foreign currency exchange rates. We believe that the last three months of recognized revenues, on an annualized basis, for our recurring software subscriptions with consumption measurement period durations of less than one year is a reasonable estimate of the annual revenues, given our consistently high retention rate and stability of usage under such subscriptions. Constant currency ARR growth rate is the growth rate of ARR measured on a constant currency basis. In reporting period‑over‑period ARR growth rates in constant currency, we calculate constant currency growth rates by translating current and prior period ARR on a transactional basis to our reporting currency using current year budget exchange rates. Constant currency ARR growth rate from business performance excludes the ARR onboarding of our platform acquisitions and includes the impact from the ARR onboarding of programmatic acquisitions, which generally are immaterial, individually and in the aggregate. We believe these ARR growth rates are important metrics indicating the scale and growth of our business. Last twelve‑month recurring revenues dollar‑based net retention rate Last twelve‑month recurring revenues dollar‑based net retention rate is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues. Last twelve‑month recurring revenues dollar‑based net retention rate is calculated, using the average exchange rates for the prior period, as follows: the recurring revenues for the current period, including any growth or reductions from existing accounts, but excluding recurring revenues from any new accounts added during the current period, divided by the total recurring revenues from all accounts during the prior period. A period is defined as any trailing twelve months. Related to our platform acquisitions, recurring revenues into new accounts will be captured as existing accounts starting with the second anniversary of the acquisition when such data conforms to the calculation methodology. This may cause variability in the comparison. Adjusted operating income less stock-based compensation expense (“AOI less SBC”) 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. 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, and realignment expenses (income), for the respective periods. 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 the Company’s 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. Management uses this non-GAAP financial measure to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and in our comparison of our financial results to those of other companies. It is also a significant performance measure in certain of our executive incentive compensation programs. AOI less SBC margin is calculated by dividing AOI less SBC by total revenues. Adjusted operating income (“AOI”) Adjusted operating income is a non-GAAP financial measure that we believe is useful to investors in making comparisons to other companies, although this measure may not be directly comparable to similar measures used by other companies. 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. Adjusted net income and Adjusted EPS Adjusted net income and Adjusted EPS are non-GAAP financial measures presenting the earnings generated by our ongoing operations that we believe is useful to investors in making meaningful comparisons to other companies, although these measures may not be directly comparable to similar measures used by other companies, and period-over-period comparisons. Adjusted net income is defined as net income attributable to Bentley Systems adjusted for the following: amortization of purchased intangibles, stock‑based compensation expense, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), other non‑operating (income) expense, net, the tax effect of the above adjustments to net income, and equity in net (income) losses of investees, net of tax, for the respective periods. The income tax effect of non‑GAAP adjustments was determined using the applicable rates in the taxing jurisdictions in which income or expense occurred, and represent both current and deferred income tax expense or benefit based on the nature of the non‑GAAP adjustments, including the tax effects of non‑cash stock‑based compensation expense. Adjusted EPS is calculated as Adjusted net income, less net income attributable to Bentley Systems allocated to participating securities, plus interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method, if applicable, (numerator) divided by Adjusted diluted weighted average shares (denominator). Adjusted diluted weighted average shares is calculated by adding incremental shares related to the dilutive effect of convertible senior notes using the if‑converted method, if applicable, to diluted weighted average shares. Free cash flow Free cash flow is a non-GAAP financial measure and our primary liquidity measure that we believe provides a meaningful measure of liquidity and a useful basis for assessing our ability to service our debt obligations, make strategic acquisitions and investments, and return capital to investors through dividends and stock repurchases. Additionally, we believe free cash flow is useful to investors as a basis for comparing our results with other companies in our industries, although our measure of free cash flow may not be directly comparable to similar measures used by other companies. Free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other non-discretionary payments, such as mandatory debt repayments, are not deducted from the measure. Free cash flow is defined as cash flows from operations less purchases of property and equipment and investment in capitalized software. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we believe provides a meaningful measure of liquidity and a useful basis for assessing our ability to repay debt, make strategic acquisitions and investments, and return capital to investors. Adjusted EBITDA is defined as cash flow from operations adjusted for the following: cash interest, cash taxes, cash deferred compensation plan distributions, cash acquisition expenses, cash realignment costs, changes in operating assets and liabilities, and other cash items (such as those related to our interest rate swap). From time to time, we may exclude from Adjusted EBITDA the impact of certain cash receipts or payments that affect period-to-period comparability. View source version on businesswire.com: https://www.businesswire.com/news/home/20251105934705/en/ Investors: Eric Boyer, [email protected] Source: Bentley Systems, Incorporated