(Bloomberg) -- Temenos AG cut its guidance for the year after reporting second-quarter revenue that fell short of analyst expectations, which it attributed to the after-effects of a report by short sellers Hindenburg Research.
The Swiss provider of banking software reported second-quarter sales of $248.4 million, missing the $255.1 million average analyst estimate compiled by Bloomberg. It slashed its 15% target for sales growth for 2024 by two percentage points.
Temenos shares dropped as much as 6% when the market opened in Switzerland, the most in three months.
Another miss and guidance revision from Temenos could “revive credibility issues,” said Bloomberg Intelligence analyst Tamlin Bason in a note.
The results are a fresh blow for the company, which has struggled to shake off the effects of allegations of “accounting irregularities” by short seller Hindenburg Research in February. Temenos conducted a probe which concluded the short seller’s findings were “inaccurate and misleading” in April. It also appointed new Chief Executive Officer Jean-Pierre Brulard after pressure from activist shareholders.
Temenos has continued to experience months-long delays in deal signings following the report, though these are now easing off, the company said in a statement Tuesday. That weighed on second-quarter revenue and prompted the cut in guidance. Software licensing revenues came in at $101.9 million, missing analyst estimates gathered by Bloomberg.
Profits before interest and tax rose 7% year over year to $90.8 million, beating the average analyst estimate compiled by Bloomberg.
This quarter is the first since Brulard was appointed in April.
“There are areas we need to improve on and invest in, and these will be our focus and commitment to our clients,” the CEO said in a statement.
The company says it will give an update on its strategic and financial plan at its capital markets day on Nov. 12, including a review of its mid-term targets.
It is considering options, including a sale, for its Multifonds fund administration business, according to a Reuters report earlier this month.
--With assistance from Allegra Catelli.
(Update with analyst commentary, share move, details throughout.)
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