Banking software provider Temenos has announced a dismal performance on Q2 licence sales. It’s also losing its CEO. If things already seemed tough for the Geneva-based firm, they just got even tougher. Shares in the company are down 21% in trading this morning on the Swiss Stock Exchange.
Licence sales in Q2 were $24m. That’s a year-on-year decline of no less than 37% on a constant currency basis. We’ve seen before how Temenos can grow maintenance revenues - and hence the overall business - despite a drop in licences (see Temenos raises revenue - thanks to maintenance). However, the latest dip has forced it to narrow its outlook for overall revenue growth in the full year from between -5% and +6% to between -5% and +1%. The EBIT outlook remains unchanged.
Clearly market conditions in banking - where investment decisions continue to be delayed due to so many uncertainties - are making life difficult for Temenos. However, you can’t help feeling that the company is in urgent need of a Plan B, following its failed merger with Misys (see Misys and Temenos break their engagement).
The job of finding and enacting that Plan B obviously didn’t appeal to CEO Guy Dubois. He is leaving the company “for personal reasons”. Long-standing CFO David Arnott steps up to the CEO role, with Non-exec Chairman and former CEO Andreas Andreades providing some extra management beef by becoming Executive Chairman.