Geneva-based banking software company Temenos, which has been the subject of sales rumors in recent weeks, faced second-quarter headwinds.
Temenos on Friday reported an operating profit (Ebit) under IFRS accounting rules of $50.9 million, down 21 percent from a year ago, while revenue decreased slightly to $238.1 million, the company said in a statement.
A delay in firms' core business of software licensing to banks made itself felt. A deal with a major European bank could not be finalized as planned and has now been postponed until the third quarter. The licensing business continues to be marked by a shift to the software-as-a-service (SaaS) model, in which the banks fully externalize their IT to Temenos.
Total software licensing grew by 5 percent in the second quarter of this year compared to the same year-ago quarter to $101.1 million. SaaS grew by 32 percent during the period to $38.7 million, offsetting a 48 percent drop in term licensing to $31.8 million. At the same time, the subscription model grew significantly to $30.6 million.
Subscriptions
«I was pleased with the demand for subscription this quarter, having only introduced this new pricing model at the start of the year. Demand was ahead of our expectations and, along with our strong SaaS revenue, drove 16 percent growth in our Annual Recurring Revenue, up from 14 percent in Q1-22. I expect this trend to continue, and we are guiding for ARR growth of 18-20 percent for the full year,» Temenos CFO Takis Spiliopoulos said.
According to market reports, however, Temenos missed expectations with the results. The Swiss banking IT specialist could be losing its appeal as an attractive takeover target.
