New Bentley Systems CEO Nicholas Cumins says AI is going to be a “major driver of our business moving forward”, describing it as the latest paradigm shift in the US company’s 40-year history to reshape the software landscape.
“Our first 40 years as a company were successful because we saw opportunity in paradigm shifts – to the personal computer, to the cloud, to digital twins and now to AI,” Cummins said on Bentley’s latest quarterly results call with analysts.
The New York-listed software firm’s two main markets are public works/utilities, and resources. It booked an 11% year-on-year increase in second-quarter revenue to $330 million and was up from $611 million to $668 million in H1 on its way to a projected FY24 range of $1.35-1.375 billion.
“Infrastructure sectors have benefited greatly from the massive capital investment in projects and jobs post-pandemic, but much more remains to be done to make infrastructure more resilient – from retrofitting aging infrastructure and mitigating the effects of climate change, to closing the gap in engineering resources,” Cumins said.
AI would play a key role, he said.
“The traction we are generating in the market with our AI-based solutions for asset analytics is worth noting,” Cumins said.
“We’re generating quite a bit of traction with AI-based asset analytics solutions … in the US and globally.
“The vast majority of costs are incurred during the operations phase of the infrastructure lifecycle, which represents a significant growth opportunity for us. With asset analytics we can transform the way organisations monitor the condition of roads, bridges, dams, water networks, and telecommunications towers. We are seeing increased adoption of our AI-based solution for roadway maintenance, and our AI-based offering for cell towers is also ramping up globally.
“Of course, this all builds on our broader strategy of bringing data to life—federating it, enriching it, reusing it—through digital twins.
“[The] other area of AI which is quite interesting is around design.
“This is more in development right now, and we’re getting great traction from representative accounts who see a huge potential in leveraging AI, again, to get more from less, to get more from the existing resources that they have, automating mundane tasks if needs be … For example, drawing production, or simply allowing the engineers to be more effective by acting truly as a copilot.
“The monetisation there will have to be potentially different … If we’re talking about automation, then a user-based pricing, obviously, is not totally adequate. You can be sure that whatever efficiency gains we generate, we will capture our fair share of that value.”
Bentley Systems reported GAAP operating income of $80 million for Q2 and $172m year-to-date. It ended Q2 with annual recurring revenue (ARR) at $1.216 billion.
Cumins said public works/utilities was the main growth driver for the company “as we continue to benefit from strong global infrastructure spending across transportation, water utilities, and the electric grid”.
“Civil is also the largest growth driver for Seequent [acquired in 2021].
“Growth in resources remained solid, with Seequent strengthening its position in mining, despite new mine investments remaining subdued.
“The industrial and the commercial/facilities sectors had modest growth.”
Regionally, North America and the Americas more broadly underpinned Bentley sales growth.
“We continue to see tailwinds from the IIJA [$1.2 trillion US Infrastructure Investment and Jobs Act], with only 38% of the overall funding having been announced to date … primarily for transportation,” Cumins said.
“We are also benefiting from increased spending for highways and bridges by the states themselves.
“As another positive development in the US, the Senate Energy & Natural Resources Committee just proposed a bipartisan reform bill representing the biggest change to federal permitting in years.
“The president recently signed into law the ADVANCE Act, a bipartisan nuclear energy bill to ease permitting restrictions. And the House passed the Water Resources Development Act, which delivers critical water resource infrastructure improvements and streamlines processes and permitting. We believe this bipartisan support for infrastructure will continue in the US, regardless of election outcomes in November.”
Ex-Bentley Systems CEO, now executive chair, Greg Bentley said the only place the word “bipartisan” appeared in the US was in relation to infrastructure legislation.
“I’m exaggerating perhaps a little bit, but we think that’s not up for electoral change,” he said.
