Q1 2025 Temenos AG Earnings Call Transcript
Key Points
- Temenos AG (TMNSF) reported strong high-teens growth in software licensing, primarily driven by subscription services.
- The company delivered solid ARR and maintenance growth, providing visibility on future recurring revenue and free cash flow.
- Temenos AG (TMNSF) reconfirmed its full-year guidance despite macroeconomic uncertainties.
- The company announced a share buyback program of up to CHF250 million, which is expected to be accretive to EPS.
- Temenos AG (TMNSF) made significant progress in its US growth strategy, including the opening of a US innovation hub in Orlando, Florida.
- Several deals were pushed to Q2 due to macroeconomic uncertainties, impacting Q1 results.
- Subscription and SaaS revenues were down 2% in Q1, primarily due to deal delays.
- The company faced a downsell impact from a large BNPL client, affecting SaaS revenue.
- Temenos AG (TMNSF) operates in an environment with increased macroeconomic uncertainty, which could impact future performance.
- Service revenues continued to decline as part of the company's strategy to work more closely with partners.
Good evening, and good afternoon. Thank you all for joining us for our Q1 '25 results call. I would like to talk through our key performance and operational highlights for the quarter before handing over to Takis.
So starting with an overview of the quarter. The sales environment were stable until the last two weeks of the quarter, when we are starting to see a number of deals being pushing out because of the macro uncertainty. We have not lost these deals and currently expect them to sign in Q2.
Indeed, several have done already signed in the first three weeks of April. The underlying business performance was quite strong with high-teens growth in software licensing, mainly for subscription. This largely compensated for the impact of downsell for large customers running Buy Now Pay Later, BNPL on our SaaS platform.
And it's important to note that we have anticipated that when we announced our guidance in February. And let me add as well that the BNPL customer was one
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