Temenos Posts 16% YoY Jump in Annual Recurring Revenue in Q2 2022

Temenos AG, the banking software company, has reported its second quarter 2022 results, showing a 16% yearly growth in its Annual Recurring Revenue (ARR).

Q2-22 highlights

• ​Demand for subscription model is accelerating ahead of expectations, driving ARR growth of 16%, up from 14% in Q1-22; EBIT growth to track 75% of prior year ARR growth from 2023

• ​Supportive demand environment reflected in 12% Total Bookings growth

• ​Total software licensing growth of 8%, below FY guidance due to large tier 1 European deal slippage expected to close shortly

• ​SaaS ACV of USD11m driven by largely new signings growth

• ​EBIT decline of 9% with cost management reducing impact of slower total software licensing growth in the quarter

• ​Free cash flow decline of 42% as expected despite faster than expected transition to subscription license model

• ​US activity remains high, won top 20 US bank for core banking renovation, deal expected to close in H2-22

• ​Europe recovery continues with double digit growth in Total Bookings and increased SaaS demand

• ​APAC performed particularly well with a number of new signings

• ​Tier 1 and 2 banks contributed 31% of total software licensing in the quarter, with increasing commitment among large banks to IT transformation

• ​Strong sales activity with partner deals in the quarter with focus on building partner channel

• ​16 new client wins in the quarter, predominantly for core banking

• ​83 go-lives including 23 implementation go-lives in the quarter

Commenting on the results, Temenos CEO Max Chuard said:"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% growth in our Annual Recurring Revenue, up from 14% in Q1-22. I expect this trend to continue, and we are guiding for ARR growth of 18-20% for the full year."