In This Article:
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ARR Growth: Up 9% in Q1 '25, driven by strong subscription and maintenance signings.
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Subscription and SaaS Revenue: Down 2% in the quarter due to deals pushed to Q2 '25.
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Software Licensing Growth: High-teens growth, largely from subscription.
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Maintenance Revenue Growth: Up 11%, with strong premium maintenance sales.
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EBIT Growth: 8% in Q1 '25, with EBIT margin expanding to 31.5%.
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Free Cash Flow: $49 million, up 12% in the quarter.
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Net Debt: $562 million, with leverage at 1.3x.
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EPS Growth: 17%, ahead of net profit growth of 14%.
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Net Profit Growth: Up 14% in the quarter.
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Share Buyback: Announced for up to CHF250 million, starting April 28, 2025.
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Tax Rate: Unchanged at 20.1%, with a reported tax rate guidance of 15% to 17% for 2025.
Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Temenos AG (TMNSF) reported strong high-teens growth in software licensing, primarily driven by subscription services.
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The company delivered solid ARR and maintenance growth, providing visibility on future recurring revenue and free cash flow.
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Temenos AG (TMNSF) reconfirmed its full-year guidance despite macroeconomic uncertainties.
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The company announced a share buyback program of up to CHF250 million, which is expected to be accretive to EPS.
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Temenos AG (TMNSF) made significant progress in its US growth strategy, including the opening of a US innovation hub in Orlando, Florida.
Negative Points
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Several deals were pushed to Q2 due to macroeconomic uncertainties, impacting Q1 results.
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Subscription and SaaS revenues were down 2% in Q1, primarily due to deal delays.
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The company faced a downsell impact from a large BNPL client, affecting SaaS revenue.
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Temenos AG (TMNSF) operates in an environment with increased macroeconomic uncertainty, which could impact future performance.
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Service revenues continued to decline as part of the company's strategy to work more closely with partners.
Q & A Highlights
Q: What was the macro weakness observed in late March, and why are clients more confident now in signing deals? A: Paniagotis Spiliopoulos, CFO, explained that the anticipation of macroeconomic changes led some customers to delay decision-making. However, since the Liberation Day, there is more clarity, which aids in decision-making. The indicative growth rates for Q2 are based on a stable environment and a solid start in the first three weeks of April.
Q: Can you provide details on the magnitude of the slippage in subscription and SaaS in Q1 and expectations for Q2? A: Jean-Pierre Brulard, CEO, stated that approximately $5 million worth of deals were closed in April, which was the amount missed in Q1. They expect to close all deals in Q2, which supports their growth outlook for the quarter. Paniagotis Spiliopoulos added that the CHF250 million buyback is part of their capital allocation strategy, with potential for more depending on M&A opportunities.