Swiss Fintech Temenos Takes Action On Hindenburg Claims

Stocks in struggling core banking company Temenos remained unsteady as the firm announced full-year results exceeding guidance but predicted slower development in this year’s net earnings.

Last week, shares in Temenos dropped by 33% following Hindenburg Research’s shorting of the stock, claiming elusive turnaround, failed products, and accounting irregularities.

Despite Improvements, Temenos Predicts Ebit To Grow By 7-9% This Year

Temenos countered the accusations and was backed by Petrus Advisers, an activist investor. The investor rejected several of Hindenburg’s allegations of the Switzerland fintech, saying that the company has just made a significant development.

Temenos revealed that its Annual Recurring Revenue (ARR) was $730 million, indicating an increase of 16% and its total revenue generated increased by 5%, amounting to $1 billion

For Fiscal Year 2023, Temenos delivered a Free Cash Flow of $243 million, representing growth of 26%, and EBIT of $199.4 million, indicating an increase of 22%. Full-year income from software licensing increased by 10% to $443 million. Subscriptions income was up 52% at $160.4 million, SaaS was up 25% at $205.1 million, and legacy” term license revenue was $ 78.1 million.

Regardless of the improvements, Temenos stated that it predicts EBIT to increase by just 7-9% this year, bringing the stock lower by three percent, after a previous 8.8% increase to 66 Swiss francs on Monday.

The non-executive chairman of the Board, Thibault de Tersant stated that he is confident Temenos is operating a solid business with deep-rooted financial controls.

Temenos Seeks To Ensure Accountability And Stakeholder Trust

The Board oversees a comprehensive investigation of the raised allegations, with autonomous third parties, and places its highest obligations to all stakeholders.

While defending the firm against Hindenburg’s “hearsay” allegations, Petrus Advisers still call for the removal of interim Chief Executive Officer Andreas Andreades.

Petrus Advisers has been urging Andreas Andreades to resign from Temenos since 2022 when he served as chairman. However, instead of stepping down, he took on the position as the Chief Executive Officer of interim when Max Chuard, another Petrus target, left in early 2023.

Regarding this issue, de Tersant expresses eagerness to seek an outstanding individual to lead the next chapter of Temeno’s growth. He emphasized his commitment to leading the Board Committee responsible for this task, with the backing of external advisors.

Although, while gearing closer to being selected as a qualified individual for this role in the second half of 2023, unfortunately, the process did not proceed. However, the team is advancing toward managing the transition by hiring an alternative.