Thibault de Tersant – Chairman
Our values and our leadership
The Board is confident that the Company’s strategy will continue to drive growth in the business. The strategic objectives of acceleration in SaaS, a focus on North America, a Partner centric approach and increasing our penetration in larger
banks will ensure we remain at the forefront of our industry.
Dear shareholders,
2023 has been a year of good growth and achievement of all targets announced in February. I am pleased with the performance of our Executive team, led by Andreas Andreades since January, when he took the interim CEO responsibility. Despite the ongoing macro uncertainty and several unforeseen events in the year including the collapse of Silicon Valley Bank and First Republic in the US, and the takeover of Credit Suisse by UBS in Europe, Temenos has focused on what it does best – driving innovation in the platform and helping clients achieve their business objectives through partnering with us. And this has resulted in a solid set of results for the year where we achieved success across our KPIs.
Temenos has made excellent progress in its journey to a recurring revenue business model through 2023. With the transition to subscription in place of term licenses substantially completed for new transactions by the end of the year, and the growing share of SaaS revenue, we have seen very strong growth in Annual Recurring Revenue as well as Free Cash Flow, and this is expected to continue going forward.
The Company signed a number of landmark deals in the year, including with one of the largest US banks for their international corporate business, another tier 1 global bank headquartered in Europe for the international wealth business, and a flagship signing in the US with Regions Bank. It is clear Temenos has retained and even expanded its competitive moat in the face of traditional competitors and more recent neo-vendors, through its relentless focus on innovation and R&D.
I would like to thank our shareholders for your continued support as we look to the future and focus on delivering value for all our stakeholders.
The Board is confident that the Company’s strategy will continue to drive growth in the business. The strategic objectives of acceleration in SaaS, a focus on North America, a Partner centric approach and increasing our penetration in larger banks will ensure we remain at the forefront of our industry. Temenos has demonstrated the strength of its cloud-native platform, with some of the largest banks in the world working with us to migrate their workloads to the cloud, and shown its innovation capabilities, with market-leading fintechs and payment providers also choosing Temenos.
Looking at the non-IFRS results for 2023, Temenos delivered a revenue of USD 1,000 million, an EBIT of USD 313 million and EPS of USD 3.19, growing 13%. Our ARR reached USD 730 million by year end, an increase of 17%, and our Free Cash Flow reached
USD 243 million, an increase of 26%.
Based on the strength of these results, the Board of Directors are pleased to propose an annual dividend for 2023 of CHF 1.20 per share, an increase of 9%, to be voted on at the Annual General Meeting on 7 May 2024.
We are fortunate to operate in a sector with many positive characteristics, however it is also a sector where its volatility in growth and debates around accounting reatments have historically attracted short selling speculators. It is disappointing
that in spite of the strength of our cash flow, our below industry average customer churn and our good ARR growth, a report was released on 15 February alleging “major accounting irregularities” and “failed products” by Hindenburg with the intention of causing damage to our share price.
Although the Board was confident about the quality of our cash flow, our systems, our products and good control environment, we understand the impact which this type of event can have. There must be complete confidence and transparency in our business. We decided therefore to commission an examination of the allegations led by myself with a Committee of Independent Board members supported by leading independent examiners. The conclusions of this work were made public on 15 April 2024 and have provided independent confirmation that there is no substance and the allegations are misleading and inaccurate.
I really want to thank and congratulate the Temenos teams who maintained their edication to deliver for our customers and achieve our objectives, while facing these allegations and we feel more united and stronger than ever.
Finally, after a long and thorough selection process, we are hopeful to be able to introduce our new CEO to you at our upcoming AGM on 7 May. I would like to thank Andreas Andreades, for stepping in and extending his time at Temenos as CEO to
enable this transition and more importantly for the enormous contribution he has made in his 25 years with Temenos. Temenos is a first class company with an exciting future ahead delivering value and innovation to our clients and achieving our mid-term objectives, leveraging the strong Temenos teams and culture.
I would like to thank our shareholders for your continued support as we look to the future and focus on delivering value for all our stakeholders.