Temenos Lifts FY-26 EBIT and EPS Guidance as Q3 ARR Rises 12%

Temenos AG (TEMN.SW ) on October 27, 2026 reported annual recurring revenue of US$903.6 million for the third quarter of 2026, up 11% as reported and 12% in constant currency from US$811.0 million a year earlier, and raised its full-year 2026 guidance for non-IFRS EBIT and earnings per share. The banking technology company published the results in an ad hoc announcement issued pursuant to Art. 53 LR from Grand-Lancy, Switzerland, covering the three months ended September 30, 2026.

Non-IFRS total revenue was $292.8 million and IFRS revenue was $292.5 million, both up 13% versus the third quarter of 2025, the company reported. Non-IFRS subscription and SaaS revenue rose 23% as reported and 22% in constant currency to $121.8 million, non-IFRS maintenance revenue rose 7% to $134.7 million, and non-IFRS services revenue rose 7% to $36.2 million. Non-IFRS product revenue increased 14% in constant currency, a measure Temenos defines as adjusting the prior year for movements in currencies.

Non-IFRS EBIT was $109.3 million, up 29% as reported and 26% in constant currency, and the non-IFRS EBIT margin was 37.3% compared with 32.7% in the prior-year quarter, according to the announcement. Non-IFRS EPS rose 32% to $1.23, and free cash flow rose 24% to $36.4 million. On an IFRS basis, EBIT increased 41% to $84.8 million and EPS increased 42% to $0.92.

“We saw good underlying business momentum in the third quarter, supported by a stable sales environment, and we signed all of the revenue that had slipped from the second quarter,” Chief Executive Takis Spiliopoulos said in the announcement. “Subscription and SaaS revenue growth was impacted by one large deal in Africa signing in the first days of Q4-26.”

Spiliopoulos said Europe performed particularly well, including the signing of a large deal with a global tier 1 bank for its European operations, while the Middle East saw multiple deals with new and existing customers across the Gulf region. North America added four new SaaS deals, including one with a regional US bank signed early in the quarter and a large deal in Canada. He said the integration of additiv is progressing, with a new tier 1 bank deal signed in APAC, and the company attributed its profitability growth to AI-driven efficiency savings, good cost control and operating leverage.

IFRS Statements and Non-IFRS Reconciliation

The IFRS income statement in the Q3 2026 results press release and primary statements shows total revenues of $292.5 million for the three months to September 30, 2026, versus $258.5 million a year earlier, with subscription and SaaS at $121.7 million, maintenance at $134.6 million and services at $36.2 million. For the twelve months ended September 30, 2026, total revenues were $1,141.6 million versus $1,095.1 million in the prior twelve-month period.

Total operating expenses were $207.7 million versus $198.4 million. General and administrative expense rose to $31.9 million from $22.8 million, while software development and maintenance expense fell to $67.2 million from $70.4 million; sales and marketing expense was $77.2 million versus $72.4 million, and services expense was $31.6 million versus $32.8 million. Operating profit was $84.8 million versus $60.1 million. Net interest expense was $5.9 million versus $1.3 million, partly offset by a $0.8 million gain from foreign exchange and movements in the fair value of financial instruments, and profit before taxation was $79.7 million versus $57.0 million. Taxation was $16.3 million, and profit for the period was $63.4 million versus $44.4 million a year earlier. Diluted earnings per share were $0.92 versus $0.65.

The reconciliation appendix shows $24.6 million of non-IFRS adjustments to operating profit for the quarter, comprising $3.1 million of restructuring costs, $11.1 million of amortization of acquired intangibles and $10.1 million of share-based payments. Non-IFRS net earnings were $84.4 million versus $64.1 million a year earlier. Temenos cautions that its supplemental non-IFRS information is subject to inherent limitations, is not based on a comprehensive set of accounting rules or principles, and should not be considered a substitute for IFRS measurements.

At September 30, 2026, cash and cash equivalents stood at $138.0 million, total assets at $2,489.9 million and total equity at $554.4 million, with non-current borrowings of $929.5 million versus $792.1 million at December 31, 2025. Third-quarter net cash from operating activities was $64.6 million. Investing outflows included $135.3 million for the acquisition of a subsidiary, net of cash acquired, and $17.5 million of capitalized development costs. Financing flows included $180.0 million of proceeds from borrowings against $60.0 million of repayments, and $35.9 million for the acquisition of treasury shares.

Raised FY-26 Guidance and FY-28 Targets

Temenos raised its FY-26 non-IFRS guidance to EBIT growth of around 12% in constant currency, from around 9% previously, and to EPS growth of around 10% as reported, from around 7%. It reconfirmed FY-26 guidance for ARR growth of around 12% in constant currency, subscription and SaaS growth of around 9% in constant currency, and free cash flow growth of around 16% as reported, with the growth rates measured against FY-25 proforma figures excluding Multifonds.

The guidance includes a negative headwind from the termination of one BNPL client in FY-25 of three percentage points on ARR, five percentage points on subscription and SaaS, and four percentage points on EBIT and EPS, with no further headwind after FY-26. Temenos stated that the acquisition of additiv is expected to be marginally accretive to its FY-26 ARR and subscription and SaaS guidance and neutral for its FY-26 EBIT, EPS and free cash flow guidance. The guidance assumes exchange rates of 1.12 for EUR to USD, 1.34 for GBP to USD and 0.82 for USD to CHF, and an FY-26 tax rate of between 19% and 21%. Items excluded from the FY-26 non-IFRS guidance remain unchanged: estimated share-based payments and related social charges of around 4% to 5% of revenue, amortization of acquired intangibles of $40 million, and restructuring and M&A-related costs of $14 million to $15 million.

The company also reconfirmed its FY-28 targets of ARR of at least $1.23 billion, EBIT of around $480 million and free cash flow of around $410 million. The targets are organic and non-IFRS and exclude any contribution from additiv.

Spiliopoulos and Chief Financial Officer Daniel Schmucki were scheduled to host a results webcast at 18:30 CET, 17:30 BST and 12:30 EST on October 27, 2026, to present the results and provide an update on the business outlook.