Temenos (TEMN) Q3 2025 earnings summary

Executive summary

• Q3 2025 delivered strong results with double-digit growth in revenue, ARR, subscription/SaaS, maintenance, EBIT, and EPS, supported by stable sales environment and no impact from US bank credit concerns; all figures exclude Multifonds.

• Signed multiple new and expanded client deals, especially in the Middle East, ASEAN, and LATAM, with a major U.S. SaaS expansion.

• Launched AI-powered products, including the Money Movement & Management platform, gaining traction with tier one banks and ongoing co-development.

• Continued targeted investments in AI, R&D, and sales, with sales headcount on track for a 50% increase by year-end.

• Sale of Multifonds completed in Q2-25; all proforma figures exclude Multifonds.

Financial highlights

• Q3 2025 total revenue grew 12% year-over-year (proforma, non-IFRS, constant currency); subscription and SaaS revenue up 11%, maintenance up 15%, and services revenue up for the second consecutive quarter.

• Non-IFRS EBIT increased 36% to $84.6m; non-IFRS EPS up 41% to $0.93; IFRS EBIT $60.1m, up 30%; IFRS EPS $0.65, up 51%.

• Free cash flow grew 30% in Q3 and 13% year-to-date; $61 million operating cash generated, $148 million in share buybacks completed.

• ARR reached $811m, up 12% year-over-year, now 88% of LTM product revenue.

• EBIT margin improved to 32.7% non-IFRS; EBITDA margin rose to 40.0%.

Outlook and guidance

• FY-25 guidance raised: subscription/SaaS growth at least 7%, EBIT growth at least 14%, EPS growth 15-17%, and free cash flow growth at least 12%.

• FY-28 targets reconfirmed: ARR at least $1.2bn, EBIT ~$400m-$450m, free cash flow ~$400m-$450m, with implied CAGRs of 13%, 10%, and 16%.

• Maintenance expected to grow 11% for the full year; ARR and free cash flow guidance maintained at at least 12% growth.

• FY-25 tax rate expected at 15-17% due to a one-off $15m tax benefit; normalized rate 19-21%.

• Guidance is non-IFRS in constant currency, except for EPS and free cash flow, which are reported.