Piper Sandler Lowers Bentley Systems (BSY) Target, Sees Services Rebound in 2026

Bentley Systems, Incorporated (NASDAQ:BSY) is included among the 14 Best Dividend Stocks to Invest in Under $50.

On March 2, Piper Sandler lowered its price recommendation on Bentley Systems, Incorporated (NASDAQ:BSY) to $42 from $45. It maintained a Neutral rating on the shares. The firm noted that Bentley introduced FY26 guidance calling for 10.5%-12.5% ARR growth. Only about 40bps of that growth is expected to come from programmatic acquisitions completed in 2025. Piper also pointed out that the services segment, which has struggled for nearly eight quarters, is expected to recover. The firm now sees services revenue growing by 15%-20% in 2026.

During the company’s Q4 2025 earnings call, President and Executive Chairman Gregory Bentley discussed the consistency of the company’s business model. He said the company’s key performance metric, annual constant currency ARR growth, has stayed in the low-double-digit range since 2022. Bentley also reported strong cash flow performance. The company generated a 35% free cash flow margin in 2025. Truly free cash flow margin, which excludes stock-based compensation, reached 30%.

He also noted that the company retired its convertible debt due in 2026. This move reduced the fully diluted share count by about 3%. Bentley said the company has now completed its deleveraging process after earlier platform acquisitions and has reached its targeted leverage range of about 2x. With the balance sheet in that position, management now plans to allocate more cash flow toward larger programmatic acquisitions.

Bentley also spoke about artificial intelligence. He described AI as a significant opportunity and said the company believes it plays a central role in the digital workflow of infrastructure engineering. Chief Executive Officer Nicholas Cumins explained the company’s two-part AI strategy. The first part focuses on integrating AI capabilities directly into Bentley’s products. The second involves building platforms that allow users and partners to create their own AI-driven workflows.

Cumins said ARR grew 11.5% year over year in the fourth quarter. Net revenue retention remained steady at 109%. He also pointed to continued strength in the Seequent segment and highlighted strong growth in Public Works Utilities. Cumins said that momentum has been supported by global infrastructure investment and solid performance from Bentley Asset Analytics.

Bentley Systems, Incorporated (NASDAQ:BSY) develops infrastructure engineering software. The company provides integrated software solutions used across professional disciplines, infrastructure sectors, geographies, and different stages of the infrastructure lifecycle.

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