Monday, 3 August 2009

A few green shoots from Temenos

(By Philip Carnelley, Mon 2 Aug 2009, 7:35) Swiss banking software major Temenos showed some signs of recovery in its Q2 results last week. It claimed to be gaining market share but didn’t elucidate further: in previous presentations the company has chosen to highlight customer defections from Misys, but there was no mention of that this time. As we reported, (see Misys ‘shows and tells’) Misys admitted at its own results last week that it had lost customers to Temenos, but reckons the rot has stopped.

Temenos revenues are now boosted by UK software company Financial Objects, which it bought in October last year, giving it a revenue uplift of about $10m per quarter. Despite this, revenues were down 15% to $82m. New licenses fell 19%, but maintenance was up 20%; services suffered most, down 32%. However on a like-for-like basis (ex-FX and acquisitions), license sales were flat (up 5% for the half) and maintenance was up 8%. Operating profit rose 4% to $10.5m, partly due to greater levels of offshoring following the Financial Objects acquisition.

Temenos kindly helped to facilitate our recent research into the banking industry’s attitudes to the Cloud and Software as a Service (see
Bankers don’t have their heads in the Cloud!). Temenos didn’t mention the Cloud in its results presentation – our analysis shows why!

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