Temenos (CH:TEMN)
:TEMN
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Temenos
(TEMN)
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Rating:66Neutral
Price Target:
CHF74.00
▲(7.40% Upside)
Action:ReiteratedDate:03/26/26
The score is driven primarily by strong 2025 profitability and constructive forward guidance with raised long-term targets. This is held back by higher leverage and weaker free-cash-flow consistency, while technical signals and valuation are both mixed to slightly unfavorable (price below key moving averages and a high P/E).
Positive Factors
Recurring revenue / ARR strength
A 12% ARR increase to $860m and ARR comprising over 90% of product revenue materially raises revenue visibility and predictability. This recurring mix supports multi-year cash flow planning, eases forecasting, and underpins durable subscription-based growth and margin conversion.
Negative Factors
Rising leverage
Material increase in leverage reduces financial flexibility and raises balance-sheet risk if growth or cash conversion falter. Higher debt burdens limit investment optionality, increase interest sensitivity and could constrain capital allocation or shareholder returns in adverse scenarios.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue / ARR strength
A 12% ARR increase to $860m and ARR comprising over 90% of product revenue materially raises revenue visibility and predictability. This recurring mix supports multi-year cash flow planning, eases forecasting, and underpins durable subscription-based growth and margin conversion.
Read all positive factors
Temenos (TEMN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF4.65B
Dividend Yield1.64%
Average Volume (3M)191.87K
Price to Earnings (P/E)23.6
Beta (1Y)0.38
Revenue Growth-25.91%
EPS Growth83.70%
CountryCH
Employees6,212
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.05
Shares Outstanding71,907,150
10 Day Avg. Volume137,839
30 Day Avg. Volume191,865
Financial Highlights & Ratios
PEG Ratio0.32
Price to Book (P/B)14.52
Price to Sales (P/S)6.07
P/FCF Ratio19.87
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF77.84Price Target Upside12.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)4.49
Revenue Forecast (FY)CHF1.16B
Temenos Business Overview & Revenue Model
Company Description
Temenos AG develops, markets, and sells integrated banking software systems to banking and other financial institutions worldwide. The company provides Temenos Transact, a banking solution that offers banking software, and data and analytics; and ...
How the Company Makes Money
Temenos makes money primarily by selling banking software and associated services to financial institutions. Key revenue streams typically include: (1) Software revenue, generated from licensing its banking software products/platforms to customers...
Temenos Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 21, 2026
Earnings Call Sentiment Positive
The call highlighted strong execution in the first year of the strategic plan with above-market product revenue growth (11%), solid ARR expansion (12% to $860m), improving profitability (EBIT +21%, EBIT margin +3ppt) and healthy cash generation (FCF +15% to $256m). Management announced confident 2026 guidance and raised 2028 targets, supported by commercial momentum (Tier 1 wins), sales capacity expansion (~60% increase in quota-carrying sales) and a defined AI strategy. Key near-term negatives include the termination of a BNPL client creating a quantifiable headwind into 2026, some Q4 non-operating costs (finance/tax/FX), and an expected moderation in premium maintenance growth over time. Overall, the positive operational and financial trends materially outweigh the contained headwinds and risks described.Positive Updates
Strong ARR Growth and Recurring Revenue Mix
ARR grew 12% year-on-year to $860 million, with ARR now representing over 90% of product revenue, providing high visibility on recurring revenue and future cash flows.
Negative Updates
BNPL Client Termination and Near-Term Headwind
A BNPL client terminated a contract in 2025, creating a headwind included in guidance; management quantified this as roughly a 5 percentage-point headwind to subscription & SaaS and ~4 percentage points to EBIT and EPS in 2026.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong ARR Growth and Recurring Revenue Mix
ARR grew 12% year-on-year to $860 million, with ARR now representing over 90% of product revenue, providing high visibility on recurring revenue and future cash flows.
Read all positive updates
Company Guidance
Management guided for 2026 (non‑IFRS, in constant currencies, except EPS and free cash flow which are reported) to circa 12% ARR growth, about 9% subscription & SaaS growth, about 9% EBIT growth, about 7% EPS growth and about 16% free cash flow growth, noting a one‑year headwind from a terminated BNPL client (roughly ‑5 percentage points to subscription/SaaS and ~‑4 points to EBIT/EPS); they set upgraded 2028 targets of ARR above $1.23bn, EBIT ≈ $480m and free cash flow ≈ $410m, highlighted baseline ARR of $860m (12% YoY) with cloud ARR at 39% of total, plan product/GTM investments of roughly $28–35m in 2026 after spending ~ $30–35m in 2025, expect ~85% EBIT‑to‑FCF conversion, and reaffirm a disciplined capital policy with reported net debt of $605m and leverage of 1.3x.Temenos Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
63
Positive
Cash Flow
58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.14B | 1.04B | 1.00B | 949.63M | 967.00M |
| Gross Profit | 839.42M | 752.41M | 709.09M | 631.20M | 641.52M |
| EBITDA | 640.22M | 362.34M | 224.19M | 309.54M | 384.98M |
| Net Income | 293.96M | 177.18M | 134.68M | 114.42M | 173.37M |
Balance Sheet | |||||
| Total Assets | 2.25B | 2.28B | 2.33B | 2.23B | 2.23B |
| Cash, Cash Equivalents and Short-Term Investments | 203.40M | 170.30M | 176.67M | 125.03M | 146.08M |
| Total Debt | 808.42M | 726.72M | 764.68M | 840.80M | 959.86M |
| Total Liabilities | 1.77B | 1.64B | 1.64B | 1.68B | 1.76B |
| Stockholders Equity | 477.66M | 638.97M | 681.98M | 578.38M | 474.79M |
Cash Flow | |||||
| Free Cash Flow | 349.05M | 284.87M | 242.45M | 192.88M | 358.01M |
| Operating Cash Flow | 354.33M | 363.35M | 331.03M | 297.91M | 460.13M |
| Investing Cash Flow | 228.49M | -71.18M | -84.19M | -137.12M | -131.53M |
| Financing Cash Flow | -511.44M | -279.25M | -235.62M | -207.97M | -295.96M |
Temenos Technical Analysis
Negative
68.90
Price Trends
69.58
Negative
72.87
Negative
69.58
Negative
Market Momentum
-0.38
Positive
43.98
Neutral
54.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:TEMN, the sentiment is Negative. The current price of 68.9 is below the 20-day moving average (MA) of 71.69, below the 50-day MA of 69.58, and below the 200-day MA of 69.58, indicating a bearish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 43.98 is Neutral, neither overbought nor oversold. The STOCH value of 54.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:TEMN.
Temenos Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | CHF2.81B | 33.89 | ― | 2.14% | -0.84% | -8.41% | |
66 Neutral | CHF4.65B | 23.59 | 55.08% | 1.64% | -25.91% | 83.70% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | CHF1.27B | 1,526.55 | ― | 3.40% | -5.87% | -224.75% | |
52 Neutral | CHF1.02B | -4.01 | -20.37% | ― | -27.51% | -36.15% | |
50 Neutral | CHF357.21M | 20.05 | 5.15% | ― | -11.90% | -78.34% | |
45 Neutral | CHF1.03B | -10.54 | -12.96% | ― | -5.48% | 79.75% |
* Technology Sector Average
CH:TEMN
Temenos
68.90
7.40
12.04%
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CH:AMS
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CH:LEHN
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CH:SWON
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25.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.