ADVERTISEMENT

Business

Temenos Shares Jump As Investors Greet ‘More Realistic’ Targets

(Akos Stiller/Bloomberg)

(Bloomberg) -- Temenos AG shares jumped after the Swiss banking software company pushed back its mid-term targets by one year to 2028, a move that was welcomed by investors as more realistic. 

The Geneva-based company’s new Chief Executive Officer Jean-Pierre Brulard used an investor day Tuesday to seek to move past this year’s short-seller allegations and several guidance cuts.

“The goal for today is to reassure investors of a growing strategy built on the solid foundation of the company,” Brulard said in an interview with Bloomberg Television’s Tom Mackenzie. Brulard added that the US is their main focus at the moment, as Temenos sees a lot of demand from the myriad of regional banks there. 

Temenos aims to outperform market growth of about 7% from 2024 to 2028, within which the public cloud and subscription-as-a-service segments are expected to grow by double-digits, according to a statement Tuesday. Brulard said he didn’t expect any further cuts to earnings guidance.

The company is also laying off some managerial positions in order to become leaner and this effort will continue in 2025, Brulard said at a presentation.

While the new medium-term targets appeared lower at first glance, this is not a negative, according to Zuercher Kantonalbank analyst Christian Bader, but rather “a better and more realistic assessment of the business opportunities.”

The new strategy comes at the end of a difficult year for Temenos, having faced the accusation of “accounting irregularities” by Hindenburg Research in February. Shares year-to-date are trading 18% lower, but the stock jumped as much as 8.7%, the most in seven months on Tuesday. 

While Temenos cut its guidance for the second-straight period in the third quarter, it still targets annual recurring revenue of more than $1.3 billion (1.2 billion Swiss francs).

“We have conducted a serious analysis of our market opportunities that has allowed us to be confident that we will grow above market,” Brulard added.

(Updates chart, shares)

©2024 Bloomberg L.P.