The coronacrisis has had a negative impact on the performance of Geneva-based software developer Temenos, as some clients deferred the implementation of projects.
Sales at Temenos declined 7 percent to $213.5 million in the third quarter of 2020 compared with a year earlier, according to a statement released on Thursday evening. The decline was largely due to the decision of banks to defer the implementation of software projects amid the pandemic. Still, despite the crisis, the company managed to attract new clients.
Move to SaaS Impacts Sales
Temenos CFO Takis Spiliopoulos said that signings continued to be impacted by the pandemic in the third quarter, despite an underlying sequential improvement from the second quarter. Clients also chose to move from license to software-as-a-service (SaaS) deals, which affected the company’s license revenue.
Profit was little-changed at $65.8 million, slightly below the analyst consensus. The company expects EBIT in the full year 2020 to be broadly flat to reflect deals converted from license to SaaS and also because the company is increasing its investments in SaaS and the cloud services.
Positive Outlook for 2021
Looking forward to 2021, Max Chuard, the CEO of Temenos, commented that the virus had acted as a structural driver in the market, which he expected would help the company return to growth.
«We are very well positioned for the transition to SaaS, having invested heavily in our SaaS and cloud capabilities over the last few years, and we will continue to do so to ensure we are the leader in our market for SaaS and cloud,» said Chuard.
Chinese Deal
Temenos in September had announced a deal with Chinese internet giant Alibaba. The Swiss company said it would join the Chinese cloud service, which meant that banks could adopt Temenos' software – Transact – on the Chinese firm's cloud infrastructure.
The move represented a massive step forward in moving to the SaaS system.
