Thibault de Tersant – Chairman
Looking to our future
As a Board, we are confident that the new strategy will enable Temenos to capitalize on the growing market demand and deliver significant value for our shareholders and clients.
Dear shareholders,
2024 has undoubtedly been a transformational year for Temenos, one in which the Company and its management have faced and overcome numerous challenges and many changes to deliver a strong end to the year and prepare for a new chapter. The selection of a new CEO took more time than I had expected, but I was delighted to welcome Jean-Pierre Brulard as our new CEO in May 2024. He joined us with a wealth of knowledge which has brought a new perspective and focus to our business, as well as significant energy and enthusiasm for our mission – to modernize financial institutions by building on the most trusted, industry-leading technology solutions.
Jean-Pierre has created a dynamic new Executive Committee consisting of both new talent and experienced executives, who have put significant time and effort to defining the Company strategy which was presented to investors in November. The strategy is structured around three growth levers – extending market leadership in “best of suite”, enhancing modular core solutions and accelerating adjacent point solutions.
Our management team has announced a comprehensive investment plan to drive growth in the business, partially funded by efficiencies that are already being realized. In particular, Jean-Pierre has identified Go To Market, especially our salesforce, as a key area for increased investment, particularly in the United States and United Kingdom, as well as greater focus of R&D investments in areas that are going to drive the greatest returns. As a Board, we are confident that the new strategy will enable Temenos to capitalize on the growing market demand and deliver significant value for our shareholders and clients.
We serve an end market that remains under pressure to satisfy clients and regulators at the same time, and to automate. The maturation of cloud infrastructure and rise of new technologies, in particular AI, are presenting banks with new opportunities to increase efficiency and drive growth. All this requires increased bank investment in modular platforms and architecture, which are needs that perfectly align with our strategy.
In this context, the Company performance in the first three quarters of the year was challenging, with a combination of external pressures on the business and some internal execution issues all having an impact. In my statement last year, I already addressed the short seller allegations from early in 2024, and so do not intend to dwell on these in detail again, but it is sufficient to remind all our stakeholders that these were comprehensively refuted as misleading and inaccurate by leading independent third parties. It is very clear, however, that these allegations had a heavy toll on our yearly performance.
I would like to extend my gratitude to all our shareholders, employees and clients for their ongoing support in 2024.
In terms of execution, our new management team is highly focused, and it was reassuring to see a strong performance in the fourth quarter, reflecting this focus. I was particularly pleased to see continued strong growth in ARR, a key performance metric as the Company transitions to a recurring revenue business model, as well as very strong growth in free cash flow.
Looking at the non-IFRS results for 2024, Temenos delivered revenue of USD 1,044 million, an EBIT of USD 355 million and EPS of USD 3.92, growing 23%. Our ARR reached USD 804 million by year end, an increase of 10%, and our free cash flow reached USD 243 million (including IFRS 16 leases and interest costs), an increase of 20%.
Based on these results, the Board of Directors is pleased to propose an annual dividend for 2024 of CHF 1.30 per share, an increase of 8%, to be voted on at the Annual General Meeting on 13 May 2025.
We also welcomed two new members to our Board of Directors in 2024: Ms. Laurie Readhead and Dr. Michael Gorriz. Our Board and our new CEO have already greatly benefited from the extensive experience of both Ms. Readhead and Dr. Gorriz since their appointment in May 2024. Ms. Readhead is a 30-year veteran of Bank of America, with excellent insight and understanding of the banking industry, in particular in the US, and Dr. Gorriz brings over 20 years of leadership expertise at Daimler and Standard Chartered Bank in the field of information technology.
I would like to extend my gratitude to all our shareholders, employees and clients for their ongoing support in 2024. I am confident we are in a stronger position at the start of 2025 and look forward to working with our management team to deliver growth for all our stakeholders.