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Temenos (CH:TEMN)
:TEMN
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Temenos (TEMN) AI Stock Analysis

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CH:TEMN

Temenos

(OTC:TEMN)

Rating:72Outperform
Price Target:
CHF66.00
▼(-7.82%Downside)
Temenos is performing well financially with strong revenue growth and profitability. The positive earnings call reinforces confidence in its growth trajectory. However, technical indicators suggest potential overvaluation and short-term pullback risks.
Positive Factors
Earnings Performance
The strength of 2Q25 results are materially ahead of expectations and more than compensate for weak 1Q25 results.
Revenue Growth
Revenues grew 16% in constant currency, beating consensus by 13%.
Negative Factors
Financial Guidance
It starts to raise the question of whether Temenos should de-emphasize P&L guidance in favour of more visible and predictable financial performance.
Subscription Growth
Subscription and SaaS growth came in at -2%, which will be seen as a weak result and it missed consensus by 9%.

Temenos (TEMN) vs. iShares MSCI Switzerland ETF (EWL)

Temenos Business Overview & Revenue Model

Company DescriptionTemenos 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 Temenos Payments, a payment solution that gives banks real-time control, customer service experience, and cost efficiencies and risk management solutions. It also offers Temenos Infinity, a digital banking product; Temenos Multifonds, a fund administration solution; Temenos SaaS solution that supports banks in various sectors and geographies; Temenos Quantum, a multi-experience development platform that delivers digital transformation; and Temenos AI that provides frictionless customer experiences and automate processes. In addition, the company provides Temenos Financial Crime Mitigation that allows banks and financial institutions to avoid regulatory fines, detect fraud, and mitigate reputational risks; Temenos Analytics, a reporting, analytics, and business intelligence product; and Temenos Regulatory Compliance, which is used to address fraud, remain compliant with regulations, and manage risk. Further, it offers retail and private banking, corporate and business banking, Islamic banking, wealth management, financial inclusion, mobile banking, consultancy and training services, and support services. Additionally, the company provides Temenos Developer Community, an open API catalogue that brings standardized out-of-the-box APIs to fast track innovation with online support and resources. The company was formerly known as Temenos Group AG and changed its name to Temenos AG in May 2018. Temenos AG was founded in 1993 and is headquartered in Geneva, Switzerland.
How the Company Makes MoneyTemenos makes money primarily through the sale and licensing of its software products and services. The company's revenue model is based on a combination of software licensing fees, annual maintenance fees, and services. Software licensing fees are charged when clients purchase or subscribe to Temenos' banking software platforms. Annual maintenance fees ensure continued support and updates for the software, providing a recurring revenue stream. In addition, Temenos generates significant revenue from professional services, which include consulting, implementation, and training services to help clients effectively deploy and utilize their software solutions. Strategic partnerships with major technology and consultancy firms also contribute to Temenos' revenue, enhancing its market reach and service offerings.

Temenos Earnings Call Summary

Earnings Call Date:Jul 22, 2025
(Q2-2025)
|
% Change Since: 20.95%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call for Temenos Q2 2025 was largely positive, with strong financial performance, successful deal closures, and strategic advancements in AI and product offerings. The company raised its full-year guidance, reflecting confidence in its growth trajectory. However, some challenges were noted, including issues with SaaS growth due to a BNPL client and macroeconomic uncertainties. Overall, the positive aspects significantly outweighed the negative ones.
Q2-2025 Updates
Positive Updates
Strong Revenue and Profitability Growth
Temenos delivered strong revenue growth of 16% in Q2 2025, with subscription and SaaS revenue growing by 24%. EBIT grew by 28% in the quarter, driven by strong revenue growth and cost control.
Successful Deal Closures
Temenos signed significant deals with Banco da Amazonia and East West Bank, demonstrating strong traction in Latin America and APAC regions. Go-lives increased to 81 this quarter, up from 70 in Q1.
AI and Product Innovation
Temenos launched new AI products, including Temenos Product Manager CoPilot and FCM AI agent, enhancing product capabilities and customer offerings.
Industry Recognition
Temenos was named the best-selling core banking provider by IBS Intelligence for the 20th consecutive year and received several notable awards, including being ranked as the fourth most sustainable company by Time Magazine.
Raised Full-Year Guidance
Due to strong H1 performance, Temenos raised its full-year guidance for subscription and SaaS growth to at least 6% and increased EBIT guidance to at least 9%.
Negative Updates
Challenges with SaaS Growth
Although subscription grew strongly, there were challenges with SaaS growth due to the downsell linked to a BNPL client, creating a headwind for SaaS revenue.
Macroeconomic Uncertainty
Despite strong performance, Temenos maintained a cautious outlook due to macroeconomic uncertainty and the potential volatility affecting future quarters.
DSO Increase
Days Sales Outstanding (DSO) jumped to 150 days, which could indicate potential cash flow management challenges.
Company Guidance
During the Temenos Q2 2025 results conference call, the company reported strong financial performance and raised its full-year guidance. The subscription and SaaS revenue grew by 24% in Q2, leading to a 16% increase in total revenue. EBIT increased by 28%, with the EBIT margin expanding by 400 basis points. The company maintained a robust free cash flow growth of 8% for the quarter, anticipating acceleration in the second half. With a focus on larger deals, especially in Europe and the Americas, the company saw increased go-live implementations, rising from 70 in Q1 to 81 in Q2. Temenos also highlighted successful strategic initiatives, including significant new hires and AI product enhancements, while reaffirming its 2028 targets and maintaining strong pipeline visibility.

Temenos Financial Statement Overview

Summary
Temenos exhibits strong financial health with consistent revenue growth, solid profitability margins, and a robust balance sheet with zero debt. Effective cash flow management enhances liquidity, though increasing operational costs pose a minor concern.
Income Statement
78
Positive
Temenos demonstrates strong revenue growth with a 4.6% increase over the past year and robust gross and net profit margins of 65.6% and 16.6% respectively in the TTM. The EBIT and EBITDA margins are also healthy at 21.5% and 33.2%, indicating efficient cost management. However, there is a slight decline in EBIT margin from the previous year, which suggests potential increasing operational costs.
Balance Sheet
82
Very Positive
Temenos maintains a strong balance sheet with zero debt in the latest TTM, a significant improvement from prior years. The equity ratio stands at 29.5%, reflecting a solid capital structure. The return on equity (ROE) is impressive at 25.5% in the TTM, highlighting effective use of shareholder funds. The consistent decrease in liabilities and increase in equity over the years further strengthens the financial stability.
Cash Flow
80
Positive
The company displays a commendable 2.1% growth in free cash flow, demonstrating effective cash management. With a high operating cash flow to net income ratio of 2.12, and a free cash flow to net income ratio of 1.67, Temenos effectively converts its earnings into cash. The robust cash flow metrics ensure strong liquidity, though the decrease in investing cash flow indicates potential higher capital expenditures or investments.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.04B1.00B949.63M967.00M887.36M
Gross Profit752.41M709.09M631.20M641.52M588.11M
EBITDA362.34M224.19M309.54M384.98M382.63M
Net Income177.18M134.68M114.42M173.37M175.02M
Balance Sheet
Total Assets2.28B2.33B2.23B2.23B2.22B
Cash, Cash Equivalents and Short-Term Investments170.30M176.67M125.03M146.08M110.19M
Total Debt726.72M764.68M840.80M959.86M977.86M
Total Liabilities1.64B1.64B1.68B1.76B1.69B
Stockholders Equity638.97M681.98M553.04M474.79M523.40M
Cash Flow
Free Cash Flow284.87M242.45M192.88M358.01M296.88M
Operating Cash Flow363.35M331.03M297.91M460.13M382.96M
Investing Cash Flow-71.18M-84.19M-137.12M-131.53M-47.74M
Financing Cash Flow-279.25M-235.62M-207.97M-295.96M-381.29M

Temenos Technical Analysis

Technical Analysis Sentiment
Positive
Last Price71.60
Price Trends
50DMA
60.53
Positive
100DMA
62.54
Positive
200DMA
63.89
Positive
Market Momentum
MACD
1.75
Negative
RSI
80.30
Negative
STOCH
88.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:TEMN, the sentiment is Positive. The current price of 71.6 is above the 20-day moving average (MA) of 59.56, above the 50-day MA of 60.53, and above the 200-day MA of 63.89, indicating a bullish trend. The MACD of 1.75 indicates Negative momentum. The RSI at 80.30 is Negative, neither overbought nor oversold. The STOCH value of 88.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:TEMN.

Temenos Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$4.92B45.2418.34%0.03%-25.15%-3.55%
63
Neutral
$34.70B5.15-11.38%1.67%5.54%-17.15%
$14.36B23.1628.96%1.39%
$1.34B-13.29%
$109.28M5.65-52.12%
$945.69M-24.38%1.00%
63
Neutral
CHF1.47B
4.33%0.62%-107.20%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CH:TEMN
Temenos
71.60
12.01
20.16%
LOGI
Logitech
96.77
9.90
11.40%
AUKUF
ams-OSRAM
14.50
0.50
3.57%
KDCXF
Kudelski SA
1.15
-0.02
-1.71%
UBLXF
u-blox Holding AG
129.99
39.11
43.03%
CH:SWON
SoftwareOne Holding Ltd.
6.93
-9.53
-57.90%
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.Date of analysis: Jul 24, 2025