GENEVA, Switzerland, 18 February 2021 – Temenos AG (SIX: TEMN), the banking software company, today announces its new 2025 targets, which will be discussed in detail at its Capital Markets Day taking place today at 2pm CET. The 2025 targets are as follows:
- Non-IFRS total software licensing growth 15%-20% CAGR 2020-2025
- Non-IFRS total revenue growth of 10-15% CAGR 2020-2025
- Non-IFRS EBIT margin of c.41% by 2025
- Total bookings growth of 17-22% CAGR 2020-2025, to reach more than USD1bn by 2025
- ARR of at least 15% CAGR 2020-2025
- Operating cash flow conversion of 100%+ EBITDA p.a.
- Free cash flow of at least 15% CAGR 2020-2025 to reach more than USD600m by 2025
- Tax rate of 18-20% from 2022 to 2025
- DSOs to reach c.85 days
Commenting on the targets, Temenos CEO Max Chuard said:
“I am very pleased to announce our new 2025 targets supported by an exciting strategic plan. We plan to hit more than USD 1billion of bookings by 2025, a major milestone for the business driven by a significant acceleration in demand for SaaS and strong growth in licenses. At the same time, we plan to expand our margins to c. 41% and generate significant free cash flow of more than USD 600million by 2025. We operate in a huge USD 63billion addressable market, projected to grow 8% CAGR over the next 5 years which is largely underpenetrated, with only 27% today spent with third parties. This provides a significant structural growth opportunity which we expect to continue for at least the next 10-15 years.
These are truly exciting times for Temenos. We are the world’s number one banking software company, driven by a relentless focus on innovation and R&D. We lead the market with our winning combination of the richest banking functionality and the most modern cloud-native technology. 1.2bn people around the world rely on Temenos solutions for their banking needs every day. And together with our customers, partners and our whole Temenos community, we are making banking better.”
Capital Markets Day
To access the 2021 Capital Markets Day, please use https://www.temenos.com/about-us/investor-relations/cmd-2021/ The event will commence at 2pm CET today, Thursday 18th February. The presentation will be made available one hour before the event starts.
- Total bookings includes fair value of license contract value, committed maintenance contract value on license, and SaaS committed contract value. All must be committed and evidenced by duly signed agreements.
- ARR is the annual recurring revenue committed at the end of the period for both SaaS and Maintenance. Includes New Customers, up-sell/cross-sell, and attrition. It only includes the recurring element of the contract and exclude variable elements.