Cash, cash equivalents and investments totaled $260.5 million at quarter end, up from $232.5 million in first quarter 2025.
Excluding licensing revenue, endpoint IC product revenue grew 12% sequentially and declined 8% year-over-year, exceeding expectations but still at the low end of typical seasonal growth.
Excluding licensing revenue, second quarter product gross margin was 52.6% compared with 51% in second quarter 2024.
Free cash flow was $27.3 million.
Inventory totaled $96.2 million, down $2.3 million from prior quarter.
Second quarter adjusted EBITDA was $27.6 million, a new quarterly record, with a margin of 28.2%. Excluding licensing revenue, adjusted EBITDA margin was 14.2%.
Second quarter endpoint IC revenue was $84.6 million, up 38% sequentially from $61.2 million in first quarter 2025 and down 5% year-over-year from $89.4 million in second quarter 2024.
Second quarter GAAP net income was $11.6 million; non-GAAP net income was $24.5 million or $0.80 per share on a fully diluted basis.
Second quarter gross margin was 60.4%, compared with 52.7% in first quarter 2025 and 58.2% in second quarter 2024, with sequential increase driven primarily by licensing revenue and year-over-year increase driven by endpoint IC product mix and licensing revenue.
Second quarter revenue was $97.9 million, up 32% sequentially from $74.3 million in first quarter 2025 and down 4% year-over-year from $102.5 million in second quarter 2024.
Second quarter systems revenue was $13.3 million, up 2% sequentially and up 1% year-over-year, driven by reader strength.
Total second quarter operating expense was $31.5 million, below expectations due to fiscal discipline.
Adjusted operating income less stock-based compensation expense was $105 million for Q2, up 10% year-over-year with a margin of 28.9%, up 10 basis points.
Annual recurring revenue (ARR) grew 11.5% year-over-year to $1.379 billion at quarter-end spot rates, or 12% excluding China, which now represents only 2% of total ARR.
Bentley Systems reported Q2 2025 total revenues of $364 million, up 10% year-over-year on a reported basis and 9% on a constant currency basis.
Free cash flow was $57 million for the quarter and $273 million year-to-date, with an increased full-year outlook of $430 million to $470 million due to new U.S. tax benefits.
Subscription revenues grew 12% year-over-year for the quarter and now represent 92% of total revenues, up 2 percentage points from last year.
Dafinchi