Temenos reports mixed Q2

Temenos reports mixed Q2

Swiss core banking systems vendor Temenos has reported a mixed bag of second quarter results, with total revenue up 32% but net profit dropping to US$6.3 million, compared to US$8.8 million a year ago. Despite this the vendor has raised its 2007 revenue outlook for the second time this year.

Temenos says licence revenue remained flat during the Q207, mainly because the comparative quarter a year ago was unusually high and included revenues from two large Tier 1 retail deals.

However maintenance revenue grew to US$ 19.1 million in Q207 - up 48% on the comparable period last year - as a result of strong signings growth over the last 12 months.

Services revenue increased by 84% in Q2 2007 compared to the year ago quarter, although this growth is a result of correspondingly high licence growth during 2006.

The vendor is reporting a 28% drop in net profit for the quarter to US$6.3 million, resulting in EPS of US$0.10 per share compared to US$0.15 per share for the comparative period. Dilution of earnings below the operating profit level primarily relates to US$ 0.9 million of net financing costs, says Temenos.

On a more positive note, Temenos says it won 12 new name clients during the quarter.

The vendor has also signed three Misys users to its T24 platform during the first half half of the year. Temenos said in March that it was targeting Misys customers by pitching a pre-customised version of its T24 Model Bank as an alternative to Misys' new BankFusion platform. The Swiss vendor is aiming to sign up eight Misys customers during full year 2007.

Looking ahead Temenos says the strong sales and pipeline for its T24 platform, along with its core bnaking deal with US-based Metavante, means that it can increase its revenue and profitability outlook for 2007.

Temenos has raised its revenue outlook for 2007 from US$290 million to US$300 million. Revised outlook for EBIT is US$57 million.

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