Earnings call transcript: Temenos Q2 2025 revenue grows 16% with strong SaaS gains

Temenos Group AG, a $5.05 billion market cap banking software provider, reported a robust financial performance in Q2 2025, with total revenue increasing by 16% and subscription and SaaS revenue surging by 24%. The company raised its full-year guidance for subscription and SaaS growth to at least 6%, while also enhancing its EBIT guidance to a minimum of 9%. The stock price of Temenos closed at 115.85, reflecting a 5.14% increase, marking a positive market reaction to the earnings announcement. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, suggesting potential upside for investors.

Key Takeaways

• Revenue increased by 16% in Q2 2025, driven by a 24% growth in subscription and SaaS.
• EBIT grew by 28%, with significant margin expansion of 400 basis points.
• Temenos raised its full-year guidance for subscription and SaaS growth to at least 6%.
• The company launched new AI-integrated products, including the Temenos Product Manager Co-Pilot.
• Stock price increased by 5.14% following the earnings announcement.

Company Performance

Temenos demonstrated strong growth in Q2 2025, with total revenue rising by 16% compared to the same quarter last year. This growth was primarily fueled by a 24% increase in subscription and SaaS revenue, highlighting the company’s successful pivot towards cloud-based solutions. EBIT saw a notable increase of 28%, accompanied by a 400 basis point expansion in margins. The company’s net profit climbed by 31%, and EPS grew by 36%, showcasing enhanced profitability.

Financial Highlights

• Revenue: 16% increase year-over-year
• Subscription and SaaS revenue: 24% growth
• EBIT: 28% increase, with a 400 basis point margin expansion
• Net profit: 31% increase
• EPS: 36% growth
• Free cash flow: 8% growth in Q2

Outlook & Guidance

Temenos has raised its full-year guidance for subscription and SaaS growth to at least 6%, reflecting confidence in its cloud strategy. The company also increased its EBIT guidance to a minimum of 9% and expects EPS to grow by 10-12%. Looking ahead, Temenos plans to continue investing in the U.S. market and AI capabilities, focusing on building a larger deal pipeline for 2026-2027. Analyst consensus from InvestingPro shows mixed sentiment, with price targets ranging from $55.44 to $110.76, suggesting varying views on the company’s growth trajectory.

Executive Commentary

Jean Pierre Poulart, CEO of Temenos, stated, "We are executing the strategy we announced at Capital Market Day." This indicates the company’s commitment to its strategic goals. CFO Takis emphasized, "We always assume a lower conversion rate for those [large] deals," suggesting a cautious approach to forecasting large deal closures. Poulart also highlighted, "We put in place some very serious incentive for the salespeople when they close larger deals," underlining efforts to boost sales performance.

Risks and Challenges

• Potential market saturation in the core banking sector could limit growth.
• Macroeconomic pressures and currency fluctuations may impact financial performance.
• Increased competition in the SaaS market could affect market share.
• Integration challenges with new AI products may arise.
• Dependence on the U.S. market expansion could pose risks if growth targets are not met.

Temenos’ strategic initiatives and strong Q2 performance position it well for future growth, although the company must navigate competitive and macroeconomic challenges. The company maintains a "GOOD" overall Financial Health Score of 2.55 on InvestingPro, reflecting solid fundamentals despite market uncertainties. For a comprehensive analysis of Temenos and similar companies, investors can access detailed Pro Research Reports available on InvestingPro, covering over 1,400 stocks with actionable insights and expert analysis.

Full transcript - Temenos Group AG (TEMN) Q2 2025:

Adam, Conference Moderator: Afternoon. Good evening, everyone. Thank you very much for joining our Q2 twenty twenty five results call. I would just like to offer everyone a brief apology. It seems there was an issue with the conference call dial in numbers that were sent out.

New numbers have been sent out to everyone. So hopefully more people will be joining. So sorry about that. We will make sure that it’s fixed for the next call. Nothing further from me.

I’m going to hand straight over to Jean Pierre to talk about the quarter.

Jean Pierre Poulart, CEO, Temenos: Okay. Thank you, Adam, and good evening, good afternoon. Thank you all for joining us for our Q2 twenty twenty five results call. I would like to talk through our key performance and operational highlights for the quarter before handing over to Takis. So let me start with an overview.

I’m very pleased with our performance in Q2, which means we deliver a strong first half. The sales environment was stable throughout the quarter. We were able to convert the orders which slipped from Q1 and as well executing a number of larger deals. I was especially pleased with our performance in Europe as well in The Americas. We had good traction with our existing base and also won quite a lot of new logos.

We continued executing our strategic roadmap, investing across the business and make new senior hires in sales and product and technology. This is largely self funded through our cost program. So even with this investment, we had strong growth in our profitability, driven by the strong revenue growth and cost control. In May, we held the Temenos Community Forum, which was very well attended by clients and prospects. We made several important AI product enhancements, which I will give some details on.

And I was pleased to announce the sale of Multiphone closed at the May as planned, as we continue to rationalize our product portfolio. So with a strong H1, we have raised our full year guidance and confirm our 2028 targets. So now I would like to highlight a couple of deals we announced this quarter. We signed Banco de Amazonia, a large regional development bank in Brazil for core banking, payments and digital. This is a marquee win for us in LatAm and we are supporting them across the business, including retail, SME and corporate banking.

Their main objective of implementing Temenos is to modernize their core banking infrastructure, diversify revenue streams and expand digital capabilities beyond their current physical footprint, positioning themselves as a full digital bank with national reach. And this shows us for our modular platform, strong banking compliance and our deep functionality, so overall a great win. In APAC, we announced a deal with East West Bank moving to Temenos SaaS core and digital for retail, SME and corporate. For the digital platform, they are replacing the current leading global front office provider with our digital platform. And they’re wanting the scalability and efficiency of our platform and as well the opportunity it gives them to expand into new segments included wealth.

Indeed, have some good traction in the wealth space with a number of deals signed in particular in Europe and that will be a focus for us going forward. Looking at go live, this increased to 81 this quarter, up from 70 in Q1. This included Raiffeisen Bank going live in Bosnia and Herzegovia as they continue to roll out Temenos card banking across the operation. They are already live with Temenos in other Eastern European markets, including Poland. Now I would like to touch briefly on Temenos Community Forum, our flagship client event.

We held the main event in Madrid with two regional events in Miami and The Philippines. The first time we have taken TCF global, reflecting our strong profile and the strength of demand for our solution around the world. We have nearly 2,000 attendees, included hundreds of clients and prospects, so a very strong level of attendance. We made some important product enhancement during this event. We launched Temenos Product Manager Co Pilot, a generic assistant that integrates Microsoft OpenAI service and is embedded with the Temenos Retail core banking solution.

With this, bank can rapidly design, test, launch and optimize financial products using Generi. We also launched our FCM AI agent to detect, investigate and prevent sanctions migration against global and domestic watch list. This product was developed in collaboration with the Tier one European bank. And this Gen AI agent allows them to reduce false positives and evaluate screening alerts in real time. I was pleased during this quarter that Temenos received several notable awards from leading industry analysts and journals.

I would like to highlight a couple of these in particular. Semenos was named best selling core banking provider for the twentieth consecutive year by IBS intelligence. We are ranking number one in 13 categories by IBS, including core, digital, payment and wealth. We also named best core banking system at Banking Tech Awards USA. This is particularly important to me as it demonstrates the strength and depth of our U.

S. Banking capabilities at this stage in the execution of our U. S. Strategy. Lastly, Time Magazine ranking TheMenos as fourth most sustainable company in the world in their annual ranking of the top 500 companies globally.

We are the highest ranking Swiss company and the only core banking software provider in the top 40. This reflects our approach to sustainability, which is really central to the way we operate as a business. Finally, I would like to give an update on the execution of our strategic roadmap. Since opening our innovation hub in Florida, over 50 new developers and architects have joined Temenos in Q2 and we will making further hires on the coming quarters. We also brought in some strong senior talent, including a new Chief Security and Risk Officer and Chief Technology Officer, as well as hiring over 25 new salespeople across the globe.

And of course, we will continue to invest in our product and strategy roadmaps for corporate and wealth in particular. Now, I will hand over to Takis to talk through the financial highlights.

Takis, CFO, Temenos: Thank you, Jean Pierre. So starting with slide 12, we had very strong revenue growth this quarter both for subscription and SaaS and for total revenue. A few things I would like to highlight in particular. Firstly, we significantly exceeded the Q2 twenty twenty five guidance we gave back in April. We were able to close the slip deals from Q1 and we benefited from a stable sales environment and good execution across most regions with Europe and The Americas being a particular source of strength.

We also closed the large deals we had in the forecast. Please note that we still had the headwind on SaaS from the down sell linked to our BNPL clients. So to deliver 24% growth in subscription and SaaS was a very strong performance. It means that subscription and SaaS grew 12% in H1 twenty twenty five and this underpins our guidance increase. Total revenue grew 16% in Q2 twenty twenty five benefiting from the strong subscription and SaaS revenue, but also another strong quarter for maintenance largely due to strong sales of our premium maintenance offering.

We also had mid single digit growth in servicing. Total revenue grew 10% in H1 twenty twenty five, which provides us a good setup for the second half. Moving to slide 13. Our EBIT growth of 28% in the quarter was driven by the strong revenue growth as well as the good performance at cost level. Our costs did increase by around CHF 15,000,000 year on year.

This was driven by a combination of increased investments, variable accruals due to higher revenues mainly for commissions and bonuses and marketing costs largely linked to TCF, our flagship client event. However, we continue to have a good level of offset by the positive impact from our ongoing cost savings programs. EBIT grew 19% in H1 twenty twenty five and this was reflected in EPS, which grew 36% in Q2 twenty twenty five and twenty eight percent in H1 twenty twenty five also benefiting from the lower share count. Looking at ARR, this has benefited from the growth in subscription licenses and maintenance in particular and continues to increase as a percentage of our last twelve months product revenue. Per end of Q2 twenty twenty five, our ARR equaled 89% of our product revenue, up from 85% in Q2 twenty twenty four.

This gives us excellent visibility both on future recurring revenue in the P and L as well as our future cash flows and as this is a twelve month forward looking metric helps underpin our 2028 targets as well. Turning to slide 15, I would like to highlight a couple of additional points here. ARR has grown 11% year on year and we expect this to accelerate further in the second half of the year in line with the full year guidance based on the strength and visibility of our pipeline. I would also like to flag the EBIT margin, which expanded 400 basis points in Q2 twenty twenty five even with an 8% increase in operating costs. Given the strength of H1 twenty twenty five and looking ahead at our revenue trajectory and investment program, we now expect our EBIT margin to be up at least 50 basis points for the full year.

On slide 16, we have like for like revenues and costs adjusting for the impact of M and A and FX. The figures are all organic and therefore in line with our constant currency growth rates. We benefited from further improvement in our services margin. And whilst our product costs were up quite a bit with all the investments we are making, it was also outpaced by the strong growth in product revenue this quarter. Our net capitalized development costs also continued to decline down to 1,900,000 in the quarter.

In terms of FX, there was a roughly €1,000,000 benefit on EBIT this quarter, largely driven by the euro strength and weakness in the European rupee. On slide 17, net profit was up 31% in the quarter in line with EBIT with higher tax charges partially offset by lower financing costs in Q2 twenty twenty five. The tax rate in Q2 twenty twenty five was 19.5% and we are guiding for a 2025 reported tax rate of 15 to 17% as we expect a one off tax benefit of around €15,000,000 from prior year. However, we expect this benefit to only materialize in Q4 twenty twenty five. The normalized underlying tax rate excluding this one off benefit remains unchanged at 19% to 21%.

EPS grew by 36% ahead of net profit growth as it did last quarter, again due to the lower share count. Turning to the next slide. We had free cash flow growth of 8% in the quarter and free cash flow grew double digit in H1 twenty twenty five. We have already absorbed 75% of our expected full year restructuring charges in the first half of the year. Driven by our strong growth in deferred revenue in H1 twenty twenty five, we expect free cash flow growth to accelerate in H2 twenty twenty five to deliver our full year guidance of at least 12% in line with our plan.

Moving to Slide 19, we show the changes to group liquidity in the quarter on a reported basis. We generated EUR79 million of operating cash and received about 80% of the multi funds purchase price in cash in the quarter with net proceeds of CHF3.119 million. We also paid the 2024 dividend and bought back CHF160 million worth of shares and so ended with CHF305 million of cash on balance sheet. Our leverage stood at 1.2 times at the end of the quarter, down from 1.3 times at the end of Q1 twenty twenty five and well within our target of one to 1.5 times. We expect to end 2025 within our target leverage range, so we have flexibility and optionality to do bolt on M and A, so it is rather unlikely for this year.

Next on Slide 20, a couple of items to highlight on our balance sheet. We received an investment grade rating from S and P adding to our existing investment grade rating from Fitch and we signed a new revolving credit facility for 500,000,000. We now have no further refinancing requirements until 2028. The bond maturing in November has already been refinanced by the bond issued in March. We continued at pace with the share buyback purchasing million of shares by the June out of a total of CHF250 million.

And our net debt stood at CHF539 million at quarter end. Moving on to slide 21, we have raised our guidance for 2025 to reflect a strong first half, stable sales environment and visibility and strength of our pipeline. Our guidance is non IFRS and in constant currency except for EPS and free cash flow, which are on a reported basis. Both the 2025 guidance and the 2024 pro form a numbers exclude any contribution from multi funds and free cash flow is of course under our standard definition including IFRS 16 leases and interest costs. We are guiding for subscription and sales to grow at least 6% for the full year, up from 5% to 7% previously.

We have also raised our EBIT guidance to at least 9%, up from at least 5%. And lastly, we have raised the EPS guidance to 10% to 12%, up from 7% to 9%. And we have kept ARR and free cash flow guidance unchanged with both growing at least 12%. Slide 22. Lastly, we have reconfirmed our 2028 target.

With that operator, can we please open the call for questions?

Conference Operator: You. The first question comes from Sven Merc, Barclays. Please go ahead.

Sven Merc, Analyst, Barclays: Good evening. Thank you for taking my questions and congratulations on the good quarter. I was wondering whether you can frame how we should think about the full year guidance following the strong second quarter. The implied guidance for H2 is for very limited growth. Is this conservative or does this mean you closed most large deals now early in the year than expected?

And how is the pipeline looking for H2 in terms of the weighting towards larger deals? Thank you.

Takis, CFO, Temenos: Hi, Sven. Let me take this one. If you remember how we started the year when we said with the original guidance, we wanted to be prudent given the macroeconomic uncertainty. And I think this is what we are doing again right now. There is clearly a strong pipeline in place.

We feel good about the quality and the size of the pipeline. But we just come out of a pretty volatile first half in terms of own performance, but also the macroeconomic uncertainty. So while we’re not explicitly flagging those risks anymore and we feel comfortable, I think we clearly prefer to remain prudent. And we still have some large deals in the pipeline, especially for Q4. And finally, the guidance is for at least 6%.

And clearly, you exclude the still sizable impact of this BNPL customer this year, I think we would deliver very robust growth. So for now at least 6% the right guidance for the full year. And maybe to give you a bit more color, clearly there is Q3 we’re aware of the let’s say more benign comparison base. So for Q3 while not giving explicit guidance, but Q3 should be in line with the full year guidance on subscription and SaaS.

Sven Merc, Analyst, Barclays: Perfect. Thank you.

Conference Operator: The next question comes from Frederic Boulan, Bank of America. Please go ahead.

Frederic Boulan, Analyst, Bank of America: Hi, good evening, Jean Pierre and Takis. If I could come back a bit more specifically on the second quarter, is there any specific elements that are impacting revenue rebound to a little bit in the recent sustainability there or down to some specific contract phasing? And if you can add any color on the SaaS, I mean, SaaS trends in general and the negative trends in some of the interest in how that should be achieved?

Jean Pierre Poulart, CEO, Temenos: Evening Frederic, Jean Pierre. So in fact, Q2 was really a good quarter where we have different very positive factors. First, a strong execution within a stable environment across the board, very pleased with Europe and Americas. Second, we benefit as well a couple of flip deals from Q1. And third, we have very good conversion rate of our larger deal as well.

So in a way, if you combine these three elements with the context of the macro, which was stable, in a way that explained we have a good and strong quarter. Of course, in a way, it’s as Takis mentioned that will allow us as well to have a strong H1 and to raise our guidance for the full year.

Frederic Boulan, Analyst, Bank of America: Thanks. And if I may, a quick follow-up. You did not change the free cash flow guidance despite a strong EBIT. We’ve seen a pretty big jump in DSOs to 160. So can you elaborate on any offsetting factors in free cash flow that seems slightly that means that you don’t see any similar grade of the free cash flow?

Takis, CFO, Temenos: Yeah, Fred. Let me take this one. So free cash flow growth of 8% was actually in line with our expectation actually slightly better and we have now achieved 10% for the first half. Keep in mind we have taken €26,000,000 of restructuring costs out of the €35,000,000 for the full year already in H1 with substantial cash outflow linked to that. So if you were ex restructuring, would be a very strong free cash flow already.

So second half clearly will accelerate just because of that. And clearly you need to think about a strong subscription and SaaS growth does not impact free cash flow immediately. There is a timing difference. You get the full immediate benefit from subscription on the P and L. There is no change on the cash from that.

Again, it’s at least 12% growth. So the increase on the top line is the one from 5% to 7% to at least 6% clearly does not as such impact free cash flow per se much.

Frederic Boulan, Analyst, Bank of America: Okay. Thank you very much.

Conference Operator: The next question comes from Levin Josh, Autonomous Research. Please go ahead sir.

Levin Josh, Analyst, Autonomous Research: Good evening. Two questions for me. Jean Pierre, you’ve been at the company for over a year now. You’ve made a lot of personnel changes. You’ve made a lot of changes to internal systems, the products.

As you think about the next year, where will your focus be as CEO? And then the second question, a follow-up on those larger deals in 2Q. I think, Takis, you just mentioned there might be some larger deals in 4Q. Should we think of larger deals as sort of more kind of one timer? Or are there going to be larger deals?

Is that more of an ongoing thing going forward? And if so, why? Thank you.

Jean Pierre Poulart, CEO, Temenos: Yes. Thank you for your comment as well. So, I’m pleased with the progress that we have done in the company. We are executing the strategy we announced at Capital Market Day. It’s basically a good balancing act and built on solid foundation of company and as well to invest in the market we would like to invest like in Western Europe and Americas as well.

So we put the company in the order of marching order to achieve that. We will continue to do that. As you have seen, we are invested a lot in The U. S. Market with opening of the innovation hub in Orlando with 15 new developers.

We have recruited as well 25 new salespeople, some of them in The U. S, which is up and running today. And of course AI is it’s a good and interesting plan for us. You have seen as well, we have announced already a couple of products in which are available now by the way in TCF in Madrid with FCM AI agent and as well Temenos product manager. We will continue, I mean to invest on AI.

At the same time, and we need to do two things at once, continue to please our installed base, continue to invest on the product and the customers that we have as well to have a good mix between existing business and new business as well. And as well a good mix between existing people and new commerce and new leadership that I mean bringing as well additional flavor in our execution. So it’s basically what I intend to do in the next year. So for the second part, will ask for Takis, I mean just to give you some color as well.

Takis, CFO, Temenos: Yeah. Hi, Jose. Let me try and respond some larger deals. Clearly, what we have been saying for the last two years is that we have seen especially in Europe larger deals coming into the pipeline not just Europe across the world, but clearly you have an overweight in Europe larger deals coming into the pipeline. Now as Jean Pierre has mentioned in his initial response the timing is quite unpredictable and if they get realized at all.

So the way we look at large deals is yes there is a large deals pipeline, but we always assume a lower conversion rate for those. And we also look at them from a pipeline perspective. Clearly, the timing can be such as we have seen in Q2. They get converted and then you have a very strong quarter. But we look at them from a full year basis.

So yes, we always assume that a number of large deals are also converted in every full year guidance we gave. But with a number of those having been signed in Q2 clearly that sets us up well for the full year. There are still some which is good. There are more large deals coming into the pipeline. So if we maintain our conversion ratio, I think that well for the second half and the next year.

So there is still some dependency on larger deals, but clearly lower today in July than in February.

Jean Pierre Poulart, CEO, Temenos: Let me add that I am pleased with the progress I’ve seen as well. We put in place institutionalized a large lean prospecting behavior as well within the sales team. And second as well better and strong execution as well, I mean very, very thorough review of the larger deal. Doesn’t mean that in a way we have 100% commission rate as Takis mentioned, But we have better visibility about the development and the closing of the larger deal. But at the same time, you need to have in mind that for the banks is a ten years, fifteen years investment.

And in a way, we are quarterly driven. So we need to adjust as well the market demand and the banks are investing on our product and technology for a long time and as well basically the quarterly constraint of a listed company.

Levin Josh, Analyst, Autonomous Research: Thank you very much.

Conference Operator: Next question comes from Tobey Hock, JPMorgan. Please go ahead.

Tobey Hock, Analyst, JPMorgan: Yes. Hi. Thanks for the question. Just coming back on the Q2 dynamics, could you just give us a sense as to how the different pieces within subscription and SaaS trended? Did you see any reacceleration in the SaaS growth?

And then on the traditional software licensing side, what was the sort of value of the deals that slipped from Q1 that you closed in the end? And then how much of a contribution did you see from the larger deals that you closed out? Thank you.

Takis, CFO, Temenos: Yeah. Hi, Toby. That’s a lot of detail you’re asking for. So on the amount of slip deals from Q1 and Q2, we had given at the time of the Q1 reporting some indication what we had closed in the first few weeks. Clearly, everything has closed by now.

Not to give you a precise number. Well, I think we at that point in time there was an estimate anywhere between 5,000,000 and €10,000,000 but no further comment to this. In terms of the larger deals, sorry again to disappoint. I think that’s a level of granularity. Clearly, had some good contribution, but it wasn’t just the large deals which drove the upside to guidance.

So it was an overall strong execution across different sizes of the deals across most regions. So it was something we feel very good about. And then finally on the differentiation subscription had a very strong growth quarter and half year. Our SaaS, I think if you look at the Q1 and Q2 of last year, we clearly can say SaaS ACV had also a pretty good sizable growth double digit. So clearly it was not just subscription which drove that performance.

Thank you.

Conference Operator: The next question comes from Charles Brennan from Jefferies. Please go ahead.

Charles Brennan, Analyst, Jefferies: Great. Thanks for taking my question and congratulations on a very nice quarter. Can I just ask on sales execution? You’ve mentioned it a couple of times, but I’m under the impression that you’ve moved your sales commission plans this year to half yearly rather than annual. Do you think that’s contributed to some unnatural success in the second quarter?

And do you think we have to pay for that later in the year and maybe Q4? And is reduced conversion reflected in your guidance as a consequence of that change in plan?

Jean Pierre Poulart, CEO, Temenos: Yes. Thank you for the question. So yes, you have a good memory. We changed the commission plan to have better linearity, which are the main objective as well and to align, I mean, the sales incentive to our linearity. So it’s not by quarter, it’s by half.

So yes, we have seen a good motivation for salespeople to close business in the first half. But I will I didn’t see a lot of even no, I mean, pull forward from H2 as well. It was basically a good incentive as well to increase linearity, linearity of the half, but linearity within the quarter as well, because we were like in month one that people are closing some business and we put in place some incentive as well and to close business as early as possible. In such a way, we are less dependent on the last days deal that in a way we don’t have the stance as well to well negotiate to the customers. So but having a look on the pipeline, we didn’t detail at all, I mean, the pipeline of H2.

So I am pleased with the strong execution we have demonstrated in first half. As well as I mentioned earlier, we have developed as well a culture of larger deal. We are not yet at the point that we’d like to be and it’s part of the progress for next year. But we are double down our effort to have in advance because these deals are sales cycle of twelve to thirteen months as well a pipeline of larger deal for twenty twenty six, twenty seven.

Takis, CFO, Temenos: On the guidance Charlie and you know us very well, clearly in July we have a pretty good view of what we plan to close for the rest of the year, especially Q3 which we said what we are seeing there. We started the year by being prudent. In July we still want to remain prudent. There is still some macroeconomic uncertainty out there, tariff volatility. And clearly while not flagging those rigs in particular and feeling comfortable about visibility, size, quality of the pipeline, I think we want to remain prudent.

And the guidance is for at least 6%. Let’s do Q3 first and then see where we stand in terms of being prudent for the full year.

Charles Brennan, Analyst, Jefferies: I think I’ll speak for everyone when I say we’d much prefer the risks on the upside than the downside. So good job on the quarter.

Conference Operator: The next question comes from Mohammed Moawala from Goldman Sachs. Please go ahead.

Mohammed Moawala, Analyst, Goldman Sachs: Great. Thank you. Hi, Jean Pierre. Hey, Takis. Nice job on the quarter.

My question was really around that sort of forward pipeline you talked about. Typically larger deals for terminals tend to be in the kind of low to mid single digit millions. I know you’ve made changes to the sort of sales capacity, particularly in The Americas. You talk about the twelve to thirteen sort of month sales cycle. How do you look at some of those deals in sort of Q4 you talked about?

Are there any more kind of outsized strategic deals? And as you sort of look at the pipeline development, pipeline coverage since you made those changes back end of last year, as we look kind of a little further forward into 2026, ’27, can you give us some color around your kind of optimism around that sort of delivery at the top line more confidently? Thank you.

Takis, CFO, Temenos: Let me take the first part Mo. I think the way we look at larger deals is as we mentioned before, it’s a portfolio and we are seeing more competitive conversion rates given the higher level of uncertainty for those. Yes. So in terms of size, we always said larger deals will be €5,000,000 plus. Everything below we will consider as let’s say more regular deals.

So be on the safe side larger conversion ratios for larger deals than for the regular ones. And usually you also assume larger conversion ratios required from new logos versus deals with existing customers. I think what you need to consider is and Jean Pierre talked about the increased number of salespeople. This is clearly feeding into a growing pipeline, obviously, especially in The Americas, U. Specifically.

We’ll have to see how quickly that converts into deals. We’ll provide as usual the update for 2016 in February.

Jean Pierre Poulart, CEO, Temenos: Yes. Let me complete with that. I think at sales kickoff, we introduced in a way the confidence optimism about larger deal to create as well value settings, first of all, to deliver the right value to the customers and to remove a couple of mental barrier as well that some salespeople should have as well not to engage with the right, I mean, C level executive and to position the real value of our solution. And on top of that, we put in place as well some very serious incentive for the salespeople when they close larger deal. So if we combine all these elements of culture, I mean management incentive and sales as well, we recruit a couple of new sales as well.

They have the confidence and the experience to close larger deal. It’s going a very good combination of people. So it’s not yet I’m optimistic for the next year as well as we recruit a team of a prospecting team of salespeople in The U. S. They have in average fifteen years of banking software experience and enterprise sales experience.

And I’m pleased with the pipeline development that I’ve seen in The U. S. As well. It’s not factoring in FY 2025. It’s starting to pay off in 2026.

But all these elements, I mean, combined to in a way a better execution of larger deal for the pipeline development and the closing.

Mohammed Moawala, Analyst, Goldman Sachs: Got it. Thank you.

Conference Operator: The next question comes from Dore Lohren from Kepler Cheuvreux. Please go ahead.

Jean Pierre Poulart, CEO, Temenos0: Yes. Thank you. Good evening, gentlemen. My first question is on the SaaS business. On the new business, if you could give us a little bit more granularity on the profile of the new customer, whether it’s Tier four banks or still some fintech, anything more precise on this would be very helpful.

And my follow-up is back on the gross you delivered the nice quarter, 25,000,000 extra in subscription in SaaS versus last year. I was wondering about the shape of this 25,000,000 Shall we see that as like three deals or four deals versus no deals a year back making the growth? Or is it much more spread throughout the organization? Thank you.

Jean Pierre Poulart, CEO, Temenos: Okay. So I will take the first part of the question. So in a way, I will not I will give you, I mean, an overview. So it’s pretty similar to what we observed on the prior quarters as well. We have more or less one third of Tier one, Tier two and two third of Tier three and below.

And from the mix between new customers and existing is mostly I mean two third, one third. So but what really pleased me that we were able across the different geographies really to have a strong execution across all the region more or less. So it’s not due to one magic deal, it’s really strong execution between the different business analytics. For the second part of the question, maybe Takis will take it.

Takis, CFO, Temenos: Yes. Laurent, I’m sure I got the question correctly about the €25,000,000 Can you repeat that?

Jean Pierre Poulart, CEO, Temenos0: Yes. In fact, this is more or less the additional subscription and SaaS sales versus Q2 of last year. So it’s the structure of this €25,000,000 Basically, I’m trying to get whether this very nice quarter was really due to just a small number of deals and you’re still dependent on the small number of deals or if the company is much more diversified now? And also the other point was on the SaaS customer. I was wondering the profile of this customer, the new one that you just managed to sign.

Takis, CFO, Temenos: Okay. Now I’ve got that. Nice try. So the €25,000,000 last year, If you remember what we said, there is clearly a headwind which we have from this P and P client throughout the year, which we had in Q1 and in Q2. So that’s actually demonstrating that there has been considerable growth on the subscription line given the headwind on SaaS.

Now, always and the number of deals we sign in any particular quarter is pretty large. And as Jean Pierre said, we had a lot of new logos as well in the good split between new and existing. So for the full year, I think we still and that’s the previous comment, we still believe and we’re still going to get as we have shown and we still incorporate a number of large deals into the full year guidance. I think that’s always been the case. I wouldn’t call it a particular dependency on any specific upsized deal in that respect.

And also the growth which we have mentioned has been pretty broad based. So the tiers have all grown and the regions APAC had a very strong comparison, but the other three regions were doing a very great job. It was just very good business execution as you would hope for in any particular quarter.

Conference Operator: Thank you. Ladies and gentlemen, this concludes today’s Q and A session. I would now like to turn the conference back over to Jean Pierre Poulart for any closing remarks.

Jean Pierre Poulart, CEO, Temenos: Okay. Thanks a lot for joining us tonight and look forward to seeing you each of you very quickly. Thank you.

Conference Operator: Ladies and gentlemen, the conference is now over. Thank you for Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

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