Temenos AG Q2 Earnings Exceed Analyst Estimates, Consensus Forecasts Revenue Growth of 2.3% in 2025

Temenos AG reported Q1 earnings that exceeded analyst estimates, with revenues at $285m, a 11% increase, and EPS at $2.32, a 409% beat. For 2025, the consensus forecast is for revenues of $1.06b, a 2.3% decline, and EPS of $3.06, a 32% drop. Analysts have raised their price targets, with the consensus target increasing 5.2% to CHF69.19.

Temenos AG, a leading provider of banking technology, announced its second quarter 2025 (Q2-25) results, which exceeded analyst expectations. The company reported a strong performance across key metrics, including revenue growth and profitability. Here's a breakdown of the highlights:

Revenue and Growth:
- Temenos AG reported non-IFRS revenue of USD 285.5 million for Q2-25, a 15% increase compared to Q2-24. This growth was driven by strong performance in Europe and the Americas, as well as significant new customer acquisitions [2].
- Subscription and SaaS revenue, a key driver of the company's growth, increased by 25% in constant currency compared to Q2-24, reaching USD 127.0 million [2].

Profitability:
- Non-IFRS EBIT grew by 28% in constant currency compared to Q2-24, reaching USD 115.7 million. This growth was primarily driven by strong revenue growth and good cost control [2].
- Earnings per share (EPS) increased by 35% compared to Q2-24, reaching USD 1.27. This was largely due to the company's strong revenue growth and cost efficiency programs [2].

Free Cash Flow and Leverage:
- Temenos AG generated USD 65.3 million of free cash flow in Q2-25, up 8% year-on-year. The company ended the quarter with leverage at 1.2x net debt to non-IFRS EBITDA, well within its target operating leverage of 1.0x to 1.5x [2].

Acquisitions and Investments:
- The company successfully closed several large deals in Q2-25, including the sale of Multifonds, which was completed as planned on May 31, 2025. Additionally, Temenos AG raised USD 500 million through a new revolving credit facility (RCF) with a strong syndicate of US, European, and Swiss banks [2].
- The company continued to invest in its business, with over 50 new product and technology developers joining its US innovation hub to support its US and AI strategies [2].

Outlook:
- Based on its Q2-25 performance and the current sales environment, Temenos AG raised its guidance for fiscal year 2025 (FY-25). The company also reconfirmed its FY-28 targets [2].

Analysts' Reaction:
- Analysts have responded positively to the results, raising their price targets. The consensus target increased by 5.2% to CHF69.19, reflecting the company's strong performance and promising outlook [1].

References:
[1] https://finance.yahoo.com/news/group-1-automotive-inc-gpi-071620482.html
[2] https://www.temenos.com/press_release/temenos-announces-strong-q2-25-results-87tw4tkxx/