Although Temenos is constantly winning new customers for its products, confidence in the Geneva-based software company remains fragile. A group of minority shareholders continues to call for a radical overhaul.
Positive news continues to emanate from Temenos these days. The banking software company just received an order from the United Arab Emirates for an undisclosed amount, with Invest Bank opting for the Temenos Banking Cloud, according to a statement Wednesday.
Invest Bank will work with NdcTech to move its core banking solutions to the cloud and modernize existing platforms and bring new products and services to market faster. The bank will also use the Temenos platform to improve operational efficiency through automation and digitized workflows.
New Customers
The following day, the Geneva-based company reported that 850 customers were using the Temenos Infinity digital banking platform. Several banks had gone live with the platform, it said, including banks in Europe, the Middle East, and Africa such as Credem, Suez Canal Bank, and Arab Tunisian Bank; Virgin Money, part of Bank of Queensland in Australia; BCP Peru in Latin America, and a prime bank in the US.
According to the company, it is seeing tremendous growth in the use of its digital banking platform, particularly among subscription (SaaS) customers, as banks look at bundled banking services for a rapid time-to-market.
When Temenos reported its third-quarter results last month Temenos CEO Max Chuard said the disappointing results «were severely impacted by banks delaying signing decisions in the last weeks of the quarter due to uncertainties linked to the worsening macro environment, as well as sales execution. We have a greater-than-average number of large deals in the pipeline at present, and we saw the sales cycles lengthening on several of these.»
That raises the question of whether the two announcements were made to assuage investors about the deal pipeline. After «a thorough review» of pending deals Temenos revised its fiscal 2022 guidance. Recurring revenue is now expected to grow by 17 to 18 percent, compared to earlier guidance of 18 to 20 percent.
The poor results cost chief revenue officer (CRO) Erich Gerber and the head of Americas Roman Bartik their jobs.
Is it Enough?
Whether the Geneva-based company's progress is enough for a group of minority shareholders is very much open to question. Petrus Advisers and Helvetic Trust recently withdrew their confidence in Temenos GroupChairman Andreas Andreades and Chuard are demanding their departure.
Activist investor Petrus sees itself as a rallying point for dissatisfied shareholders who have lost their patience with the firm since the sharp profit warning with the last quarterly results.
In addition to issuing a call for heads to roll, Petrus seeks a comprehensive realignment of the Geneva-based company's strategy. The company has a stable business model with predictable sales, explained Petrus partner Till Hufnagel to finews.ch, making such setbacks incomprehensible. The reports over the past few days are hardly likely to make Petrus and Helvetic Trust back off their demands.
