Watch this space as Temenos continues to deliver growth

Swiss banking software vendor, Temenos, has announced its latest Q1 results, revealing increased headline revenues, despite a dip in Subscriptions and SaaS during the first three months. The financials for the quarter ended 31 March 2025 showed that Annual Recurring Revenue (ARR) was up 10% on a constant currency basis at $797m and up 9% on a pro-forma basis (excluding the Multifonds business, which is in the process of being sold to Montagu Private Equity). Total revenue was up 2% on a constant currency basis at $232m.

During the first quarter of FY25, Temenos secured a number of new core banking logos in Europe and North America, underlining the vendor’s continuing strong position in what is a very competitive marketplace. However, despite the healthy top-line performance, the vendor’s Q1 was negatively impacted by one large SaaS client reducing its usage, as well as lengthening deal times toward the end of the quarter. A look at Temenos’ segmented financials reveals that Maintenance income helped to maintain the vendor’s headline growth in Q1, with revenue from this line up 7% year on year at $120.9m. Meanwhile, Subscription and SaaS revenue was down 5% year on year at $80.2m and Services revenue was down 6% at $31.2m.

In light of recent events on the World stage and the damage that US tariffs are expected to do to economic confidence and global growth prospects, it is likely to be Q2 before we get a steer on whether Temenos has been negatively impacted by the banking sector tightening its belt. For now, the Swiss vendor has reiterated its guidance for FY25, including ARR growth of at least 12% and EBIT growth of at least 5%. Temenos also confirmed its FY28 targets for continuing operations (excluding Multifonds) including ARR of at least USD1.2bn and EBIT of USD 450m. Alongside yesterday results, the vendor also announced a new share buyback program of up to CHF 250m, which will commence on April 28, 2025 and last until December 30, 2025. 

Posted by: Jon C Davies at 09:51

Tags: banking