Swiss core banking systems vendor Temenos has missed year-end ILF revenue targets of $68 million after a subdued fourth quarter.
The value of Initial Licence Fees (ILF) for new contracts signed during the full year of 2004 amounted to $62 million, an increase of 22% compared to 2003, representing Temenos' strongest ever year.
However, the vendor missed its own targets for $68 million in year-end ILF revenues as Q4 contract signings amounted to just $19 million, 14% down on last year's figures and $6 million off this year's target.
In October, Temenos CEO Andreas Andreades promised to deliver results above expectations for the year.
Shares in the vendor continued to drift downwards on SWX Swiss Exchange, as investors vented their frustration. At CHF8.25, the stock has lost 21.43% of its value since the turn of the year.
Andreades says the results should be viewed against a market background of reported deal slippage and longer sales cycles. He is maintaining ambitious sales targets for 2005 at $80 million, including two to four Temenos CoreBanking deals.
To meet these targets, Temenos will have to match this year's revival in Asia, where sales were up threefold over 2004, while resuscitating the moribund American markets. Year on year signings in North America flatlined, while the vendor failed to replicate 2003's performance in South America where it signed Bansefi in Mexico as its second CoreBanking deal in the fourth quarter of that year.
Andreades says the pipeline in South America is growing strongly on the back of reference accounts, which are now live, and the vendor is confident of supporting 2005 targets.