Temenos Ag · SIX:TEMN
Temenos — Q4 2024 Earnings Presentation
41 slides from Temenos's earnings presentation, Feb 18, 2025
Slide 1: Temenos
temenos
Slide 2: Financial Results and Business Update
Financial Results and Business Update Jean-Pierre Brulard, CEO Takis Spiliopoulos, CFO 18 February 2025 Quarter ended, 31 December 2024 2
Slide 3: Disclaimer
Disclaimer Our presentation and this document may contain forward-looking statements relating to the future of the business and financial performance of Temenos AG. Any statements we make about our expectations, plans and prospects for the Company, including any guidance on the Company’s financial p
Slide 4: Non-IFRS information
Non-IFRS information In its presentation and in this document, the Company may present and discuss non-IFRS measures. Readers are cautioned that non-IFRS measures are subject to inherent limitations. Non-IFRS measures are not based on any comprehensive set of accounting rules or principles and shoul
Slide 5: Q4-24 highlights
Q4-24 highlights Q4-24 results in line with pre-announcement FY-24 ARR and total software licensing at top end of guidance, EBIT, EPS and FCF above revised guidance Q4-24 ARR of USD 804m, up 12% y-o-y c.c. Strong Q4-24 SaaS ACV of USD 24.8m Strong free cash flow growth1 of 25% in Q4-24, and 17% for
Slide 6: Agenda
Agenda CEO update Operational and financial update Appendix 6 6
Slide 7: Investing in Customer Experience
Investing in Customer Experience Established one global customer experience team Hired new Chief Delivery Officer responsible for end-to-end customer lifecycle Customer success: 347 go-lives in FY-24 7
Slide 8: Aldermore selects Temenos for new business savings accounts
Aldermore selects Temenos for new business savings accounts Business & Enable rapid Migrating multiple corporate scaling and systems onto a enterprise improved time to single SaaS services market solution 8
Slide 9: CEC Bank selects Temenos core banking and payments
CEC Bank, a top 3 bank in Romania, selects Temenos core banking and payments Selected Drive operational Scalable, Temenos core efficiency, cloud-ready banking and business agility platform with payments for and faster time to comprehensive retail and market API architecture corporate 9
Slide 10: Our levers to grow above market
Our levers to grow above market A B C Growth Extend market Accelerate levers Enhance modular leadership in adjacent point core solutions "best of suite" solutions Focus: US, Western Europe Best of breed solutions ARR uplift contribution by FY-28 Building from our strong foundation 10
Slide 11: Execution engine to drive growth
Execution engine to drive growth Business enablers 1 2 3 4 Product & Go To Customer Operating Technology Market lifecycle model investment Culture and leadership 11
Slide 12: Execution update
Execution update Progress Product & technology • Sale of Multifonds to focus product portfolio investment • Targeted US sales hiring completed Go To Market investment • Finalizing review of product and technology organization • Transition to subscription from term license largely complete Customer l
Slide 13: Agenda
Agenda CEO update Operational and financial update Appendix 13 13
Slide 14: Q4-24 Non-IFRS financial highlights
Q4-24 Non-IFRS financial highlights Revenue and profit (non-IFRS, c.c.) Cash flow • ARR of USD 804.2m, up 12% y-o-y • Free cash flow (old)1 of USD 141.7m, up 25% • SaaS ACV of USD 24.8m in Q4-24 • Free cash flow (new)2 of USD 121.1m, up 24% • SaaS revenue up 4% in Q4-24 • DSOs at 152 days, up 11 day
Slide 15: ARR and non-IFRS income statement – operating
ARR and non-IFRS income statement – operating ARR (USDm) Q4-24 Q4-23 Y-o-Y Y-o-Y c.c. reported ARR 804.2 730.0 10% 12% Cloud ARR (% of total ARR) 43% Income statement (USDm) Q4-24 Q4-23 Y-o-Y Y-o-Y c.c. FY-24 FY-23 Y-o-Y Y-o-Y c.c. reported reported Subscription 105.8 67.3 57% 59% 193.4 160.4 21% 21
Slide 16: Like-for-like revenues and costs
Like-for-like revenues and costs LFL Non-IFRS Services revenue LFL Non-IFRS Product Revenue LFL Non-IFRS Services costs LFL Non-IFRS Product costs 1,100 +5% +1% 700 1,000 (7%) (3%) 900 600 800 500 3% 700 6% 400 600 500 300 400 +8% +1% 300 (10%) 200 (11%) 200 4% 10% 100 100 0 0 Q4-23 Q4-24 FY-23 FY-2
Slide 17: Non-IFRS income statement – non-operating
Non-IFRS income statement – non-operating Y-o-Y Y-o-Y In USDm, except EPS Q4-24 Q4-23 reported FY-24 FY-23 reported EBIT 120.0 101.3 18% 354.6 313.0 13% Net finance charge (2.7) (5.8) (53%) (15.7) (22.4) (30%) FX gain / (loss) (0.2) (0.8) (73%) 3.4 0.8 340% Tax (9.2) (19.8) (54%) (56.5) (59.7) (5%)
Slide 18: Group liquidity
Group liquidity (28) USDm (78) (97) 391 (227) 107 (38) 114 84 (727) (613) Cash on Operating Cash Tax Capex Dividend Share Buy Back Net Proceeds / Interest, FX Cash on Borrowings Reported Balance Sheet Repayment of & Leases Balance Sheet Net Debt (31/12/23) Borrowings and (31/12/24) Investments Lever
Slide 19: Sale of Multifonds for about USD 400m announced in February 2025
Sale of Multifonds for about USD 400m announced in February 2025 • Sale of Multifonds, a global provider of fund administration software, to Montagu Private Equity for a total Enterprise Value of about USD 400 million including an earnout • Aligns with Temenos’ strategy to simplify and rationalize p
Slide 20: Revenue line items and new cloud ARR disclosure
Revenue line items and new cloud ARR disclosure • New annual disclosure on cloud ARR introduced to provide transparency on growth in cloud adoption • Revenue disclosure updated to reflect changes in customer demand and industry best practice, with increasing use of hybrid and public cloud • Renaming
Slide 21: FY-25 guidance (non-IFRS, c.c.)
FY-25 guidance (non-IFRS, c.c.) • FY-25 guidance excludes any contribution from Multifonds • FY-24 proforma also excludes any contribution from Multifonds and is constant currency FY-25 guidance FY-24 proforma (USD, c.c.) ARR At least 12% growth 747m Subscription and SaaS 5-7% growth 406m EBIT At le
Slide 22: FY-28 targets (non-IFRS, c.c.)
FY-28 targets (non-IFRS, c.c.) • FY-28 targets updated to exclude contribution from Multifonds • FY-24 proforma also excludes contribution from Multifonds and is constant currency Updated Implied CAGR FY-24 proforma (USD, c.c.) FY-28 targets (USD) (unchanged from Nov 24 CMD) ARR >1.2bn (from >1.3bn)
Slide 23: Agenda
Agenda CEO update Operational and financial update Appendix 23 23
Slide 24: ARR bridge to FY-28 excluding Multifonds
ARR bridge to FY-28 excluding Multifonds USD (30-10m) >USD 475m USD 747m >USD 1.2bn FY-24 ARR Subscription & SaaS ARR Maintenance linked Mid-term to Term License Note: Non-IFRS constant currency, FY-24 is proforma excluding any contribution from Multifonds and is constant currency 24
Slide 25: EBIT bridge to FY-28 excluding Multifonds
EBIT bridge to FY-28 excluding Multifonds USD 250-290m c.35-36% USD implied USD FY-28E c.10m EBIT c.(40m) margin USD (60-80m) USD USD USD (40-55m) (10-15m) c.35m USD c.450m USD 306m FY-24 EBIT Profit from Services profit Run rate wage GTM Investment R&D Investment G&A and operating Cost efficiencies
Slide 26: FCF bridge to FY-28 excluding Multifonds
FCF bridge to FY-28 excluding Multifonds Estimated movements for illustrative purposes only USD 310-350m USD 80-100m USD USD USD USD c.400m USD 10-15m c.5m c.(5)m USD (190-230m) (30-40m) USD 223m FY-24 Product SaaS & Opex growth Financing Lease liability Capex Tax FY-28 revenues Maintenance deferred
Slide 27: FX and other assumptions underlying FY-25 guidance
FX and other assumptions underlying FY-25 guidance In preparing the FY-25 guidance, the Company has assumed the following FX rates: EUR to USD exchange rate of 1.04 GBP to USD exchange rate of 1.24; and USD to CHF exchange rate of 0.89 The Company has also assumed the following for FY-25 guidance: •
Slide 28: FX exposure
FX exposure % of total USD EUR GBP CHF INR RON Other Total software licensing 70% 19% 2% 1% 0% 0% 7% Maintenance 78% 14% 2% 1% 0% 0% 5% Services 50% 29% 5% 7% 0% 0% 9% Revenues 71% 18% 2% 2% 0% 0% 6% Non-IFRS costs 31% 13% 10% 5% 17% 2% 22% Non-IFRS EBIT 147% 28% (13)% (4)% (32)% (3)% (23)% NB. All
Slide 29: Quarterly SaaS ACV
Quarterly SaaS ACV USDm Q1-19 Q2-19 Q3-19 Q4-19 SaaS ACV 2.7 2.9 6.6 8.8 USDm Q1-20 Q2-20 Q3-20 Q4-20 SaaS ACV 5.3 3.5 14.3 11.5 USDm Q1-21 Q2-21 Q3-21 Q4-21 SaaS ACV 12.1 17.4 10.7 17.0 USDm Q1-22 Q2-22 Q3-22 Q4-22 SaaS ACV 19.0 10.6 17.9 10.5 USDm Q1-23 Q2-23 Q3-23 Q4-23 SaaS ACV 18.9 20.2 12.8 8.
Slide 30: Quarterly ARR, FCF New
Quarterly ARR, FCF New ARR, USD m Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 ARR 645.2 666.8 687.5 730.0 723.1 742.4 760.9 804.2 FCF New, USD m Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 FCF New* 32.5 51.3 21.7 97.8 44.4 62.5 15.2 121.1 Figures are on a reported basis; *Free Cash Flow New
Slide 31: Total software licensing revenue breakdown by geography
Total software licensing revenue breakdown by geography Q4-23 Q4-24 15% APAC APAC 28% 25% 33% Europe Europe MEA MEA Americas 28% Americas 19% 28% 24% FY-23 FY-24 15% APAC 23% APAC Europe 41% Europe 39% MEA MEA 24% Americas Americas 22% 20% 16% 31
Slide 32: DSOs
DSOs 160 152 146 141 140 136 133 134 129 125 124 124 120 117 115 114 111 112 107 106 100 80 60 40 20 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q4-24 Proforma DSOs at 152 at Q4-24 (Q4-24 proforma* DSOs at 146) 32 Note: Proforma view excludes Mul
Slide 33: Balance sheet – leverage
Balance sheet –leverage Leverage ratios 2.4x 2.3x 2.2x 2.2x 2.1x 2.0x 2.0x 2.0x 1.9x 2.0x 1.8x 1.8x 1.8x 1.8x 1.7x 1.8x 1.6x 1.6x 1.5x 1.4x 1.4x 1.4x 1.3x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q4-24 Proforma
Slide 34: Capitalization of development costs
Capitalization of development costs USDm Q1-22 Q2-22 Q3-22 Q4-22 FY-22 Cap’ dev’ costs (21.9) (22.3) (21.3) (20.8) (86.3) Amortisation 15.8 16.4 15.7 15.6 63.4 Net cap’ dev’ (6.1) (6.0) (5.6) (5.2) (22.9) USDm Q1-23 Q2-23 Q3-23 Q4-23 FY-23 Cap’ dev’ costs (19.7) (18.2) (19.4) (19.3) (76.6) Amortisat
Slide 35: Reconciliation from IFRS to non-IFRS
IFRS revenue measure + Deferred revenue write-down = Non-IFRS revenue measure Reconciliation IFRS profit measure from IFRS to +/- +/- Share-based payments and related social charges Deferred revenue write down non-IFRS +/- Discontinued activities +/- Gain/loss from business disposal +/- Amortisation
Slide 36: Accounting elements not included in non-IFRS guidance
Accounting elements not included in non-IFRS guidance Below are the accounting elements not included in the FY-25 non-IFRS guidance: FY-25 estimated share-based payments charge of c.5% of revenue FY-25 estimated amortisation of acquired intangibles of USD 45m FY-25 estimated restructuring / M&A rela
Slide 37: Earnings Reconciliation Q4-24 – IFRS to non-IFRS
Earnings Reconciliation Q4-24 – IFRS to non-IFRS 3 Months Ending 31 December 3 Months Ending 31 December In USDm, except EPS 2024 2024 2023 2023 IFRS Non-IFRS adj. Non-IFRS IFRS Non-IFRS adj. Non-IFRS Subscription 105.8 105.8 67.3 67.3 Term license 5.2 5.2 31.7 31.7 SaaS 57.2 57.2 54.9 54.9 Total so
Slide 38: Earnings Reconciliation FY-24 – IFRS to non-IFRS
Earnings Reconciliation FY-24 – IFRS to non-IFRS 12 Months Ending 31 December 12 Months Ending 31 December In USDm, except EPS 2024 2024 2023 2023 IFRS Non-IFRS adj. Non-IFRS IFRS Non-IFRS adj. Non-IFRS Subscription 193.4 193.4 160.4 160.4 Term Licence 34.0 34.0 78.1 78.1 SaaS 223.1 223.1 205.1 205.
Slide 39: Net earnings reconciliation IFRS to non-IFRS
Net earnings reconciliation IFRS to non-IFRS In USDm, except EPS Q4-24 Q4-23 FY-24 FY-23 IFRS net earnings 77.0 43.9 177.2 134.7 Share-based payments 16.8 18.8 50.4 53.9 Amortisation of acquired intangibles 11.5 11.8 43.4 45.0 Restructuring and M&A related costs 5.6 2.5 29.5 14.7 Fair value change o
Slide 40: Non-IFRS definitions
Non-IFRS definitions Other Revenue visibility Visibility on revenue includes a combination of revenue that is contractually committed and revenue that is in our pipeline and that is likely to be booked, but Non-IFRS adjustments is not contractually committed and therefore may not occur. Share-based
Slide 41: Thank you
Thank You Thank you 41