Temenos Stock

Ladies and gentlemen, welcome to the Temenos Q3 2026 Results Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it is my pleasure to hand over to Takis Spiliopoulos, CEO; and Daniel Schmucki, CFO. Please go ahead, gentlemen.

Good afternoon, good evening. Thank you for joining our Q3 '26 results call. Before we begin, I would like to introduce Daniel Schmucki, who joined Temenos as CFO in August. Daniel has a strong track record in building and leading high-performance teams in complex international businesses and is an excellent addition and strong partner for our executive committee and senior management. I am pleased to have him alongside me today.

As usual, I will start with our key performance and operational highlights for the quarter before handing over to Daniel, who will provide an update on our financial performance.

Starting on Slide 6. We had a strong start to the quarter, signing all flicked revenue from Q2. The sales environment remains stable throughout the third quarter with good underlying business momentum. Subscription and SaaS revenue growth was impacted by 1 large deal in Africa signing in the first days of Q4. This one deal would have resulted in subscription and sales growth above our guidance and consensus levels. We continue to strengthen our large deal execution capabilities to improve consistency. We have good visibility and a strong pipeline of deals into Q4, and we also had a robust start to the fourth quarter. We remain confident in achieving our 2026 subscription and SaaS guidance, and our focus is execution to close out the year strongly.

Looking at the regional performance in Q3 '26 Europe performed particularly well, signing a number of deals, including with a global Tier 1 bank for its international operations. Importantly, we also saw strong sales performance in North America, with 4 new deals, including the U.S. regional bank deal we announced in July and a large deal in Canada. The Middle East also performed well with both new logos and existing customer deals across the Gulf region. The integration of Additive is progressing well with a new Tier 1 bank deal signed in APAC. I will cover more on additive shortly.

We delivered very good growth in profitability in the quarter, driven by efficiency savings and good cost control and operating leverage. Free cash flow also continues to perform well, growing 24% in the quarter. Lastly, we have raised our 2026 EBIT growth and EPS growth guidance to 12% and 10%, respectively, and reconfirmed our other guidance metrics as well as our 2028 targets.

Moving to Slide 7. We continue to see momentum with banks across geographies and tiers, both from existing customers extending their relationships with terminals and from new logos adopting Temenos for the first time. I would like to highlight a few of these deals. In Europe, we extended our core banking relationship with a Tier 2 corporate bank supporting their business as they continue their platform transformation. In the Middle East and Africa, we expanded an existing Tier 1 relationship with additional modules to enhance transaction processing capability. We also saw good momentum in the U.S. and Canada. In APAC, a Tier 1 bank selected us to modernize its digital wealth platform. The first Tier 1 deal we have signed in this space since the acquisition of additive in July. These are just a handful of dies we signed in the quarter, which demonstrates the breadth of our global client base and demand for our product across geographies and tiers.

Moving to Slide 8. I would like to focus on 2 deals in particular that demonstrate the progress we are making with some of the world's largest financial institutions and this is driven by good execution against our product and technology road map, specifically for top-tier clients and our strategic sales focus on these institutions. Firstly, we signed a large deal with a U.S. headquartered Global Bank, expanding our relationship for international private banking. They are rolling out Temenos co-banking in their private banking operation across multiple geographies and this new deal adds additional capabilities and volume to expand the platform scope. It builds on the strong progress we made with this client over the past few years, and I would like to thank my colleagues across the business from product and technology to delivery and sales for their excellent work that made this possible.

Secondly, as you may have seen from the press release yesterday, we announced a deal with Vancity to modernize their core banking platform. Vancity is the largest credit union in Canada, and they have big ambitions. The deal has a broad scope covering retail deposits, lending, corporate banking and payments and demonstrates the breadth and depth of our platform.

Turning to Slide 9. I would like to highlight some recent client implementation successes. BSI is the largest Islamic bank in Indonesia, serving more than 23 million customers. They have been a Temenos customer for many years and choose to build on that investment by upgrading to the latest Temenos code. This was a significant transformation and shows how Temenos can help a large sophisticated bank modernize its core while creating the capacity and resilience to support future growth.

Turning to Slide 10. Kingdom Bank is a specialist bank in U.K., which successfully went live with Temenos core payments and financial crime mitigation on Terminal South running on Microsoft Azure. By replacing siloed legacy systems with Temenos, the bank is streamlining operations, reducing manual processes and is able to scale more efficiently while continuing to provide the personalized service its customers expect.

Moving to Slide 11. I would like to give you an update on additive following completion of the acquisition in July. We are deliberately taking a measured approach to the integration, maintaining stability for customers and the additive team, while integrating key corporate functions. The founder-led management team continues to run the business, which was part of the approach we set out when the transaction was completed. We have already integrated additive with Temenos core banking and we are now leveraging our global client relationships to grow the pipeline. We are seeing strong interest from Tier 1 and Tier 2 prospects, and we have already signed a new Tier 1 bank deal in APAC in Q3.

This early traction reinforces the strategic rationale for the acquisition. It also complements our AI strategy through purpose-built, AI-enabled experience and orchestration which is increasingly important in helping banks automate processes and deliver personalized services at scale.

On Slide 12, we continue to make good progress on our strategic execution priorities. Our product and technology leadership team is accelerating the road map and innovation delivery, and we continue to invest selectively in sales capabilities. In particular, to strengthen our large deal execution capabilities. This is a priority area for me to improve execution consistency in large deals and ensure they sign as planned going forward. We are also investing in key growth markets, including Brazil and Japan, where we are seeing good pipeline growth. Across the business, we are increasing automation and simplifying our processes and systems to drive further efficiency. AI is increasingly supporting this, and we are seeing tangible productivity benefits across our corporate product and technology functions. We remain focused in the balancing investment in the areas that support our growth with continued cost discipline.

With that, I will now hand over to Daniel, who will take you through our financial performance for the quarter.

Thank you very much, Takis. This is my first results call since joining Temenos in early August, and I do look forward to meeting many of you over the coming weeks and months.

As you can see on Slide 14, we delivered another strong quarter of ARR growth, up 12% to reach $904 million. This reflects continued demand across both our installed base and new logos. Product revenue grew 14%, driven by good underlying momentum across the business and continued strength in maintenance, which grew 7% in the quarter as expected.

Turning to Slide 15. Subscription and SaaS grew 22% in the quarter. We signed all revenue that slipped from Q2 and our win rates remained strong throughout the quarter. However, as Takis talked about, Q3 subscription and SaaS revenue did not meet our expectations due to 1 large deal in Africa signing in the first week of Q4. Excluding the headwind from BNPL clients, subscription and SaaS grew 30% in the quarter. Q4 is the last quarter where we will face this headwind. Total revenue grew 13%, mainly driven by the subscription and SaaS revenue, but also strong contributions from maintenance and services revenue growth.

Moving on to Slide 16. Non-IFRS EBIT was particularly strong this quarter, growing 26% and non-IFRS EPS grew by 32%. This reflects the good revenue growth in the quarter as well as efficiency gains, our continued disciplined approach to cost management and the operating leverage in the business. We continued to invest in our product and technology organization as well as go-to-market capabilities in selective growth markets and for large deals.

Let me now highlight a few items on Slide 17. ARR grew 12% to reach $904 million, by the end of quarter giving us good visibility on future revenue and cash flow. Maintenance grew 7% in the quarter, which was in line with our expectations and reflecting good ongoing demand for premium maintenance across our customer base. Maintenance is tracking well, and we now expect it to grow 8% to 9% for the full year. On profitability, our EBIT margin improved by 4 percentage points year-on-year to 37.3%, reflecting strong operating leverage and benefits from our cost efficiencies.

Moving to nonoperating items on Slide 18. Net profit and EPS both grew 32% in the quarter. Higher EBIT more than offset the increase in new finance charges. The quarter also benefited from a year-on-year improvement in FX rates. Our tax charge was broadly unchanged year-on-year, and we still expect the full year tax rate of 19% to 21%.

On Slide 19, we generated free cash flow of $36 million in the quarter, up 24% year-on-year, driven by strong ARR growth, strong operating profitability and our disciplined approach to capital allocation. This remains a key metric for us as we continue to drive growth in our recurring revenue. This brings me to Slide 20, where we show the changes in group liquidity during the quarter. We generated $72 million of operating cash flow before tax expenses. We paid out $135 million of cash in the additive acquisition, which drove the increase in the net borrowings of $120 million, with the balance paid in shares. We also bought back $36 million of shares in the quarter. We ended the quarter with leverage of 1.6x, reflecting the acquisition of additive.

Turning to Slide 21. A few comments on our debt, leverage and capital allocation. As we announced on the 12th of August, we launched a new share buyback program of up to CHF 100 million running until the end of February 2027 in line with our disciplined approach to capital allocation. Our reported net debt of $813 million primarily reflects the acquisition of Additive, partly offset by continued strong free cash flow generation. We expect leverage to be within our target range of 1 to 1.5x by year-end.

Moving on to Slide 22. We have raised our full year guidance for non-IFRS EBIT growth of 12%, up from 9% and EPS growth of 10%, up from 7%. We reconfirm guidance of 12% ARR growth, 9% subscription and SaaS revenue growth and 16% free cash flow growth. This includes a marginal contribution from additive on ARR and subscription and SaaS. The guidance includes the headwind from the termination of the BNPL client in 2025, which we have given on that slide. As I mentioned, there will be no further headwind from this beyond 2026.

And lastly, on Slide 23, we have reconfirmed our 2028 targets, reflecting our continued confidence in our strategic positioning, good visibility and continued conversion of our pipeline. This does not include any contribution from additive yet, and we plan to update these targets at our Q4 results announcement in February. Operator, please, can we open for questions.

[Operator Instructions] Our first question comes from Toby Ogg from JPMorgan.

Perhaps just on the subscription and SaaS. So yes, the indication was for at least 30%. We've got 22%. I know you mentioned the large deal in Africa slipping into Q4. But just to be clear, that was the only delta versus your initial expectations for at least 30%. And then can you help us understand just what happened with the deal that drove the slip versus your initial expectations for the deal closure? And then just one more -- just on the BNPL headwind. You mentioned subscription and SaaS would have been 30% ex the BMPL headwind. So an 8-point headwind versus the 22% growth I think the indication had always been that the BNPL headwind would be for 5 points for 2026. So could you just help us understand why that was larger in Q3.

Yes. Toby, thanks for the question. On your first one, yes, it was the one deal that drove the difference. And as we said, without that issue, we would have been comfortably ahead of what we had guided.

Now what happened and clearly, you appreciate those large deals are sometimes a bit difficult to predict in terms of timing. So there were last-minute complications, let's say, on the legal side, which and some logistical challenges, which basically drove this a few days into October. It was a very unfortunate but that was the only one. And it was a very large deal, as you can see from the delta. Now on the only BNPL one, what we said is the impact is 5% on a full year basis, clearly, given its equal amounts from this BNPL client, which we have lost per quarter, but SaaS and subscription are different across the years, and this is where you see the gap. Yes. So for the full year, it remains -- clearly for the full year, the delta will be the smallest one.

The next question comes from Laurent Daure from Kepler Cheuvreux.

Yes. I have 2 questions. The first is for Daniel. I mean you've been on the job now, I think, for 3 months as the CFO. If you could share your first feeling on Temenos, if you're happy with the reporting tools that you have find when you joined the company. And if you see areas of improvement on the financial side.

And my second question is more for you, Takis. I mean, basically, you're going to deliver better profitability on roughly unchanged revenue from what you were expecting earlier in the year. So what has driven the reduced cost expenses during the year that gets to a bit on the profitability side.

Thank you very much for the question. Looking back over the last couple of weeks and months, I was particularly impressed by First of all, the quality of the people here at Temenos, it's culture, Temenos' strategy, the strength of the product portfolio as well as its road map. The client relationships as well as the very disciplined execution attitude in the organization. And in combination of all these qualities, I do see a great deal of opportunities which lays ahead of us.

A bit more focusing on finance. I did inherit a very strong finance organization with numerous talented and very motivated professionals. And I'm very convinced that I can bring in my experience as a former CFO of other large and complex multinational organization. And one of such opportunities is to continue to consequently adapt AI across all finance functions across the whole Temenos universe from data via workflow, via tools, et cetera and so on. So continuous improvement is part of my DNA, and I will contribute towards that direction also here at Temenos.

Laurent, I'm taking the second one. Looking at the original cost guidance we had given for Q3 and also the full year, we have now seen that we were able to drive a lot more efficiencies across our entire cost base. And if we look at Q3, and that also applies to Q4, these came primarily from organizational efficiencies in R&D, very disciplined approach to casting G&A and corporate functions. And clearly, what we always said, once you have real ownership across the business and people apply, managers apply what we call the self-funding principle, which we have been embedding that clearly shows very good results. But it's also -- we're now seeing tangible productivity gains from AI.

And also, we continue to automate a lot of processes across the business, and this drives additional efficiency gains. So -- and this is without having any impact on investing. Actually, on the contrary, some of those efficiency gains are reinvested in our strategic road map. And clearly, there is a very disciplined approach. So overall, if you split the roughly 12 million increase in EBIT, you have maybe 2 million, 3 million coming from maintenance and services and the remaining 8 million, 9 million really from AI and automation efficiencies. And this is something which is sustainable. So the upside basically flowing into the EBIT guidance for the full year.

The next question comes from Charlie Brennan from Jefferies.

I'll try and sneak 2 in as well, if I can. Firstly, can you just say something about the competitive environment at the moment? I think on the Q2 call, someone focused on the Wells Fargo deal. I think in Q3, part of Deutsche Bank have gone to a competitor as well. Have you seen any change in competitive intensity or win rates that are worth calling out to us?

And then secondly, maybe for you, Daniel, can you talk about whether you're revisiting any of the disclosures that you're providing the market I guess, the sort of topics that investors are debating are things like capitalized R&D that I see ticked up slightly in the quarter, the treatment of share-based payments and maybe revenue recognition around subscription revenue. Are these the same topics that you're thinking about all of these up for debate? Or are you thinking about completely different issues?

Charlie, yes, you're allowed 2 questions. First, on the competitive environment, we're aware of what the one competitor, it's not really a competitor because we haven't really squared up with them any time even not at Wells Fargo and Wells Fargo is not really in our target segment. If you think about the regional banking part Q2, Q3. We just had our annual strategy session with the Board. And we had actually very good win rates. If we look at the last 12 months, across most competitors. I think outside the U.S., I would still call out Infosys, Oracle. And yes, and maybe intellect to a certain extent, being most prominent. And in the U.S., it's still the 2 incumbents FIS and [ Python ]. For -- a few times, we squared off against new vendors, but very few times, obviously, we didn't see any impact there. Mostly, we don't see them on the short list. Now on -- and I'll let Daniel ask on the other one, you may have seen we actually lowered share-based compensation impact this year from 5% to 4% to 5%. And I think this will continue to move down on capitalized development, the net impact, the slight increase you have seen, this is just coming from inclusion of additive and nothing special, no change in policy to read in.

Charlie, thanks for your question. I am very comfortable with the level of disclosure and the way we disclose at Temenos. We do give a lot of details, including on [indiscernible], as well as on share-based costs. And my focus is more on how we can drive the finance function to be a good partner on the business.

The next question comes from Mark Hyatt from Morgan Stanley.

I'll continue the tradition and ask 2 questions, if that's okay. Firstly, I guess on margins, operating leverage so far this year has been very strong with EBIT running at a growth going well ahead of plan. I guess looking at your medium-term guidance, which you reiterated, the delta between EBIT growth and revenue growth is expected to narrow. You've talked a lot about AI savings and efficiency benefits. So could you just help us understand why we shouldn't expect operating leverage to continue beyond FY '26 at the pace -- at a similar pace that it has been? Or are you expecting increased investments over the medium term?

And then maybe one, a more longer-term question perhaps. One of the things we've been hearing from perhaps other vendors in the enterprise software space is AI simplifying implementations, migrations and upgrades, are you seeing AI have a significant impact on the economics of making a core banking migration? And is this helping banks become more willing to undertake modernization projects? What's the evidence of that if you are seeing that?

Mark, happy to take the 2 questions. First one, clearly, we're only scratching or starting to scratch the surface in terms of the capabilities AI can bring. And already now, we see some tangible impact. Now if you put the $5 million to $10 million in comparison to our cost base of $750 million plus/minus, that's 1%. So clearly, the rate, there are a lot of opportunities around workforce productivity and in general, a little more tighter management in terms of the discretionary spend, and a lot of things you simply don't need to do with adding people anymore.

So what we have been saying is internally is okay, AI and Automation will actually enable you to do more, and in some cases, a lot more with the existing resources. So you can actually almost keep your cost flat or just increasing slightly. And then the revenue growth will grant a lot of margin improvement. Now we still have lot of investment plans. We appreciate the 2028 EBIT margin target may not look very ambitious right now, but let's keep the discussion for another day. Now on the AI-enabled or AI assistant implementation, your spot on. And we started already last year. late last year, but especially this year to trying to almost industrialize this process. We've built a lot of agents ourselves and also with partners who are trialing both AI-enabled deployments to installing new software as well as upgrading existing customers from older release to a newer one with this AI agents running a number of POCs.

It's helping, I mean, the numbers we're getting, it's already quite exciting. I think we'll still get -- we'll still need some time to get this to an industrial grade, but we would expect this if you shorten implementation times, it will drive down ROI, and then it will help definitely accelerate the demand side because it's still one of the biggest hurdles for many for many banks to embark if the cost of implementation, not so much the cost of the software. So yes, it's happening, seeing what you see from other enterprise vendors.

The next question comes from Sven Merck from Barclays.

I guess I'm asking 2 as well. You've talked about expanding your large deal execution capabilities to improve consistency. Can you just elaborate a bit further on what specifically needs to change operationally and how long it will take you to build out these capabilities? And then secondly, on the net capitalization increase. As this was driven by the inclusion from additive, can we just extrapolate the Q2, the Q3 run rate to Q4? And how should we think about 2027?

Yes, happy to take your 2 questions. Maybe on the captive first. It's -- I think the Q2 number, which was basically 0 was probably had a bit of one-offs in there. I think the run rate clearly is lower than what we had in Q2. Q3, I think for Q4 may be similar, it will be appropriate. And I think for 2027, we would expect the net captive to grow much less than revenue for R&D. So it's not going to -- I think we're trying to keep this as flat as possible maybe even going slightly down over future years. Now what we are changing, and it's -- we started this in Q2 and accelerated this, on the one hand, is hiring some people with a lot of experience doing large complex deals. So that's on the people side, and you don't need hundreds of them. It's just a handful which we have now all long bolded. Maybe there is one to, in addition, coming.

Number two, we have put even more rigorous review cycle on specifically large deals. So there is now a comprehensive review across not just deal progress, but also the legal side, which we'll do everything to prevent any potential delays to be recognized early and basically then resolved. And we have very, very sophisticated monitoring system in place where you also get AI help basically AI, the agents can tell you if a deal is not tracking according to plan. So you can you can interfere and try to solve it and bring it bang on track. So a lot of AI supported processes and stronger people on this one, which hopefully will prevent from this happening again.

The next question comes from Justin Forsythe from UBS.

Welcome, Daniel. A couple on my end as well. First one, more of a strategic one on recent events. Have you sold at all about resilience after recent core banking outages that we've seen? In particular, there was an incident, I believe, in the U.K., where a Google Cloud server was knocked out and you saw the Revolut global app down for several hours and a bunch of other U.K. banks impacted. So maybe you could just talk a little bit about how you think about those types of resiliencies and what you guys have built into the platform in those instances?

And then a separate question around the guide either to Takis or Daniel. I want to understand a little bit around the time lines associated with the S&S guidance because I believe the S&S guidance has stayed unchanged at 9% constant currency from the beginning of the year. But I believe additive is now captured within that 9%. I understand that you've guided it to a marginal contribution for the year. Just wanting to understand what that means. Does that mean that we have a slightly lower organic expectation, understanding again that it's marginal, but just would like to understand the moving pieces there?

I'll take the second one first. It's really rounding. It's marginal, and it's yes. I think this is what we said consistently since the acquisition and nothing has changed there. I mean, clearly, we expect them to have eventually a stronger contribution. As Daniel said, we will reflect that when we issue '27 guide and the midterm targets in February.

Now the other one is quite interesting. And clearly, we have been watching what's happening out there. Now one of the things a lot of -- some of the savings we're getting across the business is also being reinvested growth broadly in 2 areas. One is a lot about product, as we said, accelerating the road map, intelligent delivery with AI assistance. Another area is corporate IT and cybersecurity. There is one thing which is very high on the agenda, which has a very high priority with all banks cyber resilience. So we've already started a while ago. Clearly, accelerated what we do. In terms of cyber resilience, are you running all our software, all our products against the most modern frontier models. And this is not just a one-off.

This is something we do on a recurring basis. And you start -- you do basically what with the most recent releases and then you go back with the older releases. So there is a lot of focus on this one, and this will continue yes. So on the soft side, clearly, as we know, we relying mainly on Amazon and Azure. So clearly, the investments they are doing on cyber resilience are also benefiting our customers. But clearly, it's a high-priority agenda and we'll continue to invest there.

Next question comes from Josh Levin from Autonomous Research.

Just one for me. It's about Q4. With the African deal signed, how much of the subscription and SaaS revenue required to meet the guidance is already contractually secured? And is the remaining unsigned requirement more or less concentrated in large deals than it was entering 3Q?

Thank you, Josh. Okay. So there is -- aside from the steel in Africa, there is obviously more that has already been signed this far in the month of October. So I think this is -- no, we're not going to give monthly guidance and monthly percentages.

Now what we can say and appreciate that as this one deal [ missed ]. But if you look at the Q4 '25 subscription and SaaS versus Q3 2025, there, it sequentially increased by $53 million. So if you look at our guidance now, which we have reconfirmed the quarter-on-quarter increase is around $55 million, so about the same. Now the difference is we didn't have any slips from Q3 to Q4 '25. But now clearly, we had a large one. So it makes actually the task, if you want, on a relative basis a bit easier. Do we have more large deals Q4 '26 than Q4 '25, I would say, in terms of percentage, it's a similar amount, which we have in the forecast, the pipeline obviously consists of a lot more larger deals as we have been talking about since this in Q2 already and the pipeline is now -- there's a lot more large deals and a lot more new logo deals, yes. So that's as much as we can say.

The last question for today's call comes from Thomas Poutrieux from BNP Paribas.

Yes. I just have one, please. I was wondering if you could update us on your progress in converting the U.S. pipeline due to revenue because obviously, you announced a few nice deals in Latin America, but looking at the numbers, Americas as a region was down double digit in Q3 on subscription and SaaS. So when do you think we should expect the U.S. to drive meaningful subscription-SaaS revenue growth, please?

Thomas, I appreciate that it's not all visible what we signed. We signed 4 new logos in the U.S. and one big in Canada in Q3. Now these are all SaaS deals i.e., they're visible in the ARR, but you see very limited revenue impact now in Q3. Obviously, you had 1 quarter of revenue in Q4. So clearly, we're seeing the good pipeline, which we built over the last 12 months and converting into signed deals. There is clearly more we expect from Q4 and also '27 and beyond.

So I think this is -- yes, it could always be a bit faster, but that's what we are. What you see basically in the Americas, obviously, is the much larger swing is LatAm, because LatAm is still predominantly on-prem business -- so I think LatAm had an okay quarter, and this is what you see basically in the pie chart.

Ladies and gentlemen, this concludes today's question-and-answer session. I would now like to turn the conference back over to Takis for any closing remarks.

So thanks for listening and looking forward to catch up over the next days and weeks else we talk in February. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Temenos' Q2 2026 Results Conference Call and Live Webcast. I am Moira, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Takis Spiliopoulos, CEO and Interim CFO. Please go ahead.

Good afternoon, good evening. Thank you for joining our Q2 '26 results call. As usual, I will talk you through our key performance and operational highlights for the quarter before updating you on our financial performance.

Starting on Slide 6. We had a strong start to the quarter and a stable sales environment throughout. However, we saw a small number of mainly large and new logo deals signed out at the end of the quarter. Most of these deals were in Europe. Importantly, none of these deals have been lost. We have also been able to sign the majority of the slipped subscription and SaaS revenue in the first 3 weeks of Q3 '26, which confirms the confidence we have in our pipeline conversion. These deals include one of the largest banks in Central and Eastern Europe as well as a Tier 1 European bank.

With a robust start to the third quarter and very good visibility driven by a strong pipeline of large and new logo deals, we have given explicit guidance for Q3 '26 with subscription and SaaS expected to grow at least 30% year-on-year. We have also reconfirmed our 2026 guidance and 2028 targets.

APAC performed particularly well this quarter, signing a large new logo in the ASEAN region as well as multiple deals with existing customers. We also saw good momentum in the U.S., signing a deal with a regional bank to migrate to Temenos core banking on SaaS. We had another strong quarter of premium maintenance signings, which helped drive our profitability along with strong operational leverage in the business. We continue to execute on our strategic roadmap, making investments across the business, particularly in core banking expertise in our India and U.S. development teams. We also closed the acquisition of additiv, strengthening our wealth proposition and accelerating AI-driven orchestration in line with the product roadmap we presented at the Capital Markets Day. Temenos clients across all tiers, especially Tier 1s and 2s have shown strong interest for the additiv wealth offering. Lastly, our free cash flow continues to perform very well with strong double-digit growth this quarter.

Moving to Slide 7. We signed a number of key deals in Q2 '26 and I'd like to highlight a couple of these. As I mentioned, in APAC, we signed a large deal with a new logo for core and digital in both the bank and its digital subsidiary to help them enhance the digital experience for their customers and to accelerate product innovation. We also extended our partnership with a number of existing clients, including a Tier 1 bank in Japan, who are using our platform to accelerate their speed to market.

In Europe, we extended our SaaS partnership with a digital subsidiary of a major European bank. And in North America, we signed a deal to migrate the client to our SaaS core banking for retail lending. These are just a handful of the deals we signed in the quarter and demonstrate the breadth and depth of our global client base and the increasing demand for our market-leading products.

Turning to Slide 8. We continue to focus on maximizing the value we deliver to our clients. Al Rajhi is the world's largest Islamic bank with over 20 million customers and more than USD 260 billion in assets, based in Saudi with a growing young and digital-first population seeking innovative and personalized banking services. Al Rajhi is a long-standing client of Temenos, who values our deep Islamic banking expertise, proven capabilities and established presence in the region. We migrated them across more than 500 branches to the latest Temenos Core Banking platform, enabling them to significantly reduce product launch cycles from weeks and months to days. They now have a strong foundation for continuous innovation and to provide next-generation digital banking experiences.

Turning to Slide 9. At TCF, we also announced that Questbank in Canada had gone live on Temenos SaaS. This was another encouraging milestone for our North America business. Questbank, part of Questrade Financial Group, is launching Canada's newest digital bank to challenge incumbents in the market and needed a highly scalable Core Banking platform that enables them to launch products fast with real-time data and strong regulatory compliance to support their growth. The Core Platform was implemented in 9 months with new deposit and lending products and the existing mortgages business moved across to the Temenos Core. It is another example of the depth and breadth of our business, where we are partnering across all tiers of banks from fintechs getting new banking licenses to building composable core modules with the world's largest banks.

Moving to Slide 10. We have made good progress on our product roadmap with a number of announcements at TCF, our client forum, in May. We launched Composable Retail Deposits and Composable Retail Lending as part of progressing Lever B of our corporate strategy, which focuses on building out composable core solutions for the world's largest banks. These 2 new cloud-native core banking solutions allow banks to modernize their deposits and lending operations incrementally rather than undertaking a full core replacement. These enable banks to modernize critical revenue-generating businesses in a phased and cost-effective manner. The solutions can be deployed independently, integrate with existing technology environments through APIs and help banks accelerate innovation while reducing the risk and disruption typically associated with large-scale transformation programs.

And turning to the next slide. We also announced the launch of Intelligent Core and Intelligent Digital. This is the next step in our AI product roadmap, extending AI across both core and digital banking. We are working with our clients to address some of the largest pain points in banking technology, applying AI to the installed, run and upgrade life cycle, enabling faster deployments, greater automation and simplified upgrades. We announced several agentic AI capabilities at TCF, including Copilots for Workbench, payments, FCM and Wealth as well as Conversational Studio for Digital. Together, these demonstrate how we are converting decades of banking expertise into practical AI capabilities. The launches are a key part of our broader strategy to embed AI across our entire product portfolio, further differentiating our offering and directly supporting our clients' growth.

Moving to Slide 12. Temenos continues to be recognized as the market leader in the core banking space. This is now our 21st year as the global leader in core banking in the IBS sales league table, and we ranked 1st in 15 categories overall. I was pleased to see us ranked first in nearly every region and second in North America, where we continue to focus on expanding our footprint in the U.S. We also won the World's Best Core Banking Solution Award from Euromoney, another demonstration of the strength of our core banking product.

Now on Slide 13, we announced the acquisition of additiv in June and closed the transaction on 17th July. This acquisition accelerates our product roadmap, in particular, for mass affluent as well as giving us strong AI orchestration capabilities for complex journeys. Overall, there are 3 key drivers for this acquisition. Firstly, it extends our reach into the mass affluent segment where we already had ambitions to expand. additiv's market-leading mass affluent offering enables wealth managers to provide personalized advice at scale and significantly shortens delivery cycles. It gives us an immediate footprint and offering in this fast-growing market.

Secondly, additiv gives us strong foundation to build out complex retail and corporate journeys in the future, in particular, for credit origination and accelerates our ability to offer a state-of-the-art digital onboarding and origination solution to our client base.

And lastly, it complements our AI strategy with purpose-built AI-enabled experience and orchestration. We are working with the additiv team to build out more AI use cases across their orchestration platform over time. The founder-led team will continue to run additiv on a stand-alone basis for the foreseeable future.

On Slide 14, we continue to make good progress on our strategic execution priorities. Our product road map is progressing well. As we have already shown, and we are investing across the business. I was pleased to welcome Brian DuVal, our new President North America, who joins from SS&C and previously FIS. He brings a wealth of experience and deep knowledge of the U.S. core banking market.

Rodrigo Silva is moving to President LatAm to focus on growing our business in key markets in that region, in particular, Brazil, where we see a very significant opportunity.

On the product side, we closed another round of key role hires in our India and U.S. teams and we have continued to roll out AI tools across the business as part of our AI strategy.

I will now run through our Q2 '26 financial highlights, focusing on constant currency non-IFRS financials. On Slide 16, we delivered another quarter of double-digit ARR growth despite the slipped deals in the quarter, helped by our premium maintenance signings and a good level of SaaS ACV signings. Product revenue declined marginally year-on-year, but grew a healthy 6% in H1 '26, also helped by the strength of our premium maintenance signings and our strong performance in Q1.

Turning to Slide 17. Subscription and SaaS declined 13% in Q2 '26 and 4% in H1 '26 due to the slipped deals. As I mentioned before, importantly, none of these deals were lost, and the majority of the slipped subscription and SaaS revenue was already signed in the first 3 weeks of Q3 '26. Total revenue grew 1% in the quarter and 6% in H1 '26 with maintenance and services revenue growth offsetting the impact from subscription and SaaS.

Now on Slide 18, non-IFRS EBIT grew 4% in Q2 '26 and 10% in H1 '26 and non-IFRS EPS grew 7% in the quarter and 12% in H1 '26. Our cost base was broadly flat in the quarter and up 4% in H1 '26 with an increase in fixed costs, offset by lower variable cost accruals. We continue to hire and invest in the business. However, strong premium maintenance signings and operational leverage mean we are still able to deliver strong growth in profitability.

Now let me highlight a few items on Slide 19. ARR grew 11% to reach $881 million at quarter end despite the ongoing headwind from the BNPL customer and the lower subscription and SaaS revenue, giving us strong visibility on future recurring revenue and cash flow.

Maintenance again grew double digit, up 12% in the quarter, largely due to the strength of premium maintenance signings. We now guide for maintenance growth of 8% for the full year, slightly up from 7% to 8% previously as we are continuing to take a prudent view on the continued demand for premium maintenance across our customer base.

On profitability, our EBIT margin improved by 1 percentage point to 41.3% year-on-year, reflecting strong operating leverage. Our margin will normalize in H2 '26 with ongoing investment in the business and greater variable cost accruals that we typically see in the second half of the year.

Moving to nonoperating items on Slide 20. Net profit was up 2% in the quarter and EPS grew 7%. This was achieved despite an increase in net finance charges and taxes, partially offset by FX with our tax rate this quarter, marginally higher than the expected full year tax rate of 19% to 21%. We canceled additional shares after the AGM in May from the 2025 buybacks, which also benefited EPS.

On Slide 21, we generated free cash flow of $74 million in the quarter, up 14% year-on-year, driven by strong ARR growth, solid EBIT to cash conversion and our disciplined approach to capital allocation. This remains a key metric for us given our move to a subscription license model in 2022.

On Slide 22, we have the changes in group liquidity in the quarter. We generated $127 million of operating cash in the quarter, paid $118 million in dividends and bought back $10 million of shares in our latest buyback, which ended in April. We ended the quarter with a leverage at 1.4x within our target range of 1 to 1.5x.

Turning to Slide 23. A few comments on our debt leverage and capital allocation. We completed our share buyback program for a total of CHF 100 million in April 2026 with shares representing 1.9% of registered capital purchased. We also canceled approximately 4 million shares purchased in the 2025 share buyback after our AGM in May, and our reported net debt stood at $691 million at quarter end. I would also flag that we expect our leverage to be within our target range of 1 to 1.5x by year-end, including the acquisition of additiv.

Next, we have reconfirmed our 2026 guidance, which is non-IFRS and in constant currency, except EPS and free cash flow, which are reported. The acquisition of additiv is expected to be marginally accretive to ARR and subscription and SaaS and neutral on EBIT, EPS and free cash flow. The 2026 guidance includes the headwind from the termination of the BNPL client in 2025, which we have given on the slide. There will be no further headwind from this beyond 2026.

We have also given guidance for Q3 '26. Given we already signed the majority of the slipped subscription and SaaS revenue from Q2 '26, we expect subscription and SaaS revenue growth of at least 30% in the quarter.

And lastly, we have reconfirmed our 2028 targets based on our strong first year of execution, confidence in our strategic positioning, good visibility and continued conversion of our pipeline.

Operator, can we please open up for questions.

[Operator Instructions] The first question comes from the line of Frederic Boulan from Bank of America.

Fred Boulan, Bank of America. If I can start maybe with the pretty vast differences, we've seen the momentum between the different regions. And if you can spend a bit of time on what's driving that, in particular, when we look at the strong performance in Asia versus the U.S. or Europe? I mean, is it different competitive dynamics, difference in product portfolio or simply kind of macro or sales cycle considerations?

Fred, yes, let me address this. We -- I mean we had a strong start to the quarter and overall, a stable sales environment across all regions throughout the quarter. But it was really a number of larger deals and new logos, which were enclosed in the final weeks of June, and this is mainly in Europe. Now as you are aware, sales cycles are 12 to 18 months for core solutions, which can make precise timing of closing the deal quite difficult, especially for larger and new logo deals. The majority of the slipped subscription and SaaS revenue already signed in the first 3 weeks, including one of the largest banks in Central Eastern Europe in the Tier 1 European bank. So again, I need to highlight that no deals have been lost. We're -- I think we have been awarded everywhere selected vendor status. So we expect to sign the remainder of the slipped deals in the next few weeks. And this is what's giving us the very good visibility into a strong Q3 and why we have guided for at least 30% subscription and SaaS growth and have reiterated the '26 guidance.

From a regional perspective, yes, APAC had a good quarter, also thanks to our larger deals. I think the Americas, which includes both North and LatAm, I think there was more a difficult comparison base, which we didn't manage tolap. Remember, we had a large Brazilian deal in Q2 '26. The U.S. performed or North America performed largely as expected. Middle East can always be volatile, but no issues there. In Europe, clearly, we had an accumulation of especially larger deals and new logos, which we timed out. So I wouldn't read anything specific into the regional performances.

The next question comes from the line of Josh Levin from Autonomous Research.

Two questions from me. You said that you've already signed the majority of the slipped deals in 3Q '26. Does the at least 30% subscription and SaaS revenue guidance for 3Q '26, assume that you signed the remainder of the slipped deals, what happens if you don't sign the remainder of the slipped deals? And then also, you've mentioned it's mostly Europe, the slippage, so the deals that were timed out in Europe, is there a lengthening of the European bank decision cycle, some macro regulatory factors, competitive dynamics? I mean, what's driving the slippage? And why is it mostly in Europe?

Yes. Let me take this. Now on I think, the slipped deals, yes, we expect everything to be signed in Q3, and we've already seen good traction else, you wouldn't qualify them as slipped deals. So, yes.

The -- on your second question, I think with larger and especially also new logos, it's about understanding the procurement process. And if you deal with the bank for the first time, this can bring up surprises, especially towards the end of the quarter. So we didn't see anything specific lengthening. It was really about understanding in full, the approval processes, the procurement processes. And as we had -- this is always the tricky part to get from how long does it take to get from being awarded a selected vendor i.e., winning the deals to get to terms and conditions, procurement with a new logo, it's always difficult to time. So nothing what we have seen in terms of lengthening sales cycles, anything specific.

The next question comes from Mark Hyatt from Morgan Stanley.

Takis, quick one on maintenance, please. Growth was very strong again in Q2. I know you've called out premium maintenance in your prepared remarks. But if you could give us a bit of a breakdown of the drivers of what's driving that result. That would be really helpful. And previously, you've said that maintenance growth, I think, should moderate going forward from the high levels that we saw last year. So is the strength that you've seen in the first half of the year consistent with that expectation? Or has that been stronger than expected? And if you could give any color in terms of how we should think about that in the second half, that would be really helpful.

Mark, happy to take that one. Maintenance growth of 12%, clearly was strong and we expected high single digit, low double digit. So it came out a bit better, and clearly shows the continued strong momentum. However, and this is important to highlight. This is customers also getting real value for this. So it's an attractive value proposition for clients. That's something we have seen getting a lot of traction with the premium offerings.

The second element, which is also working into maintenance is, it also reflects the CPI-linked uplift, the value uplift we get from subscription deals. So it's not just the premium part. On -- we're having now 13% in H1 '26. We think we should be at 8% for the full year. So now for Q3, you're probably going to be around the 5% mark, and then Q4 will be the remaining. We clearly have now tough comparison basis ahead for Q3 and Q4, also because the overall pool in terms of the opportunity doesn't grow that much. I mean we get the new clients in, but there is always a delay. So clearly, that's what we see as the right number for the year. And beyond '27, '28 as we had commented, it's probably around the 5% to 6% mark, so it should then normalize.

The next question comes from the line of Toby Ogg from JPMorgan.

Just on the Q -- can you hear me? Can you hear me?

Yes, sir, we can hear you. You can proceed.

Yes, we can hear you.

Can you hear me? Yes. Sorry about that. Just on the Q3 subscription and SaaS guide for at least 30%, how much of that would you say is underpinned by those slipped deals that you've already signed and then the remaining that you expect to sign? And therefore, how much is sort of left to do kind of beyond that deal slippage tailwind just as we think about building confidence around that 30%-plus guide for Q3. And then just more broadly around the full year subscription and SaaS guide, how confident are you around that? And what's kind of driving that confidence at this point?

Toby, so if you ballpark numbers, what we have done, given approximately, if you take consensus as reference, a $20 million miss on subscription and SaaS, that has been entirely moved into the Q3 guidance. So we didn't really see a lot of other changes. That was the thinking and given the traction we have seen in the first 3 weeks and the rest is expected over the next days and weeks, this is what we put behind. Now where does our confidence not just for Q3, but also the full year come from? It's clearly, we have invested a lot in our sales force in the last 18 months, mostly last year. And clearly, you see now a lot happening in the pipeline already at the start of the year, especially across new logo deals and especially larger deals. So we are -- when I look at the second half pipeline, it's a significant increase versus last year, H2, H1 but also H1 this year. So that gives a lot of visibility and underpins our confidence that this isn't really a major issue in terms of the deals, it's really timing, what we see. And the early traction in Q3 confirms that. So yes, we are confident, and this is why we have reconfirmed our guidance.

Mr. Brennan, your line is open, you can proceed with your questions.

Great. Hopefully, you can hear me. Just a couple from me actually, if I can. Firstly, just a technical one. Did the additiv deal actually closed in the quarter? I couldn't see it in the cash flow statement. Or has it closed in Q3? And should we expect you to update your guidance in Q3 for the acquisition?

And then secondly, and unrelated, can you just talk us through the moving parts in the OpEx line. We don't often see OpEx lower than Q1 at the Q2 stage, I understand that some sales commissions would have been impacted, but it looks like it's in the R&D line as well. And I always struggle to forecast the OpEx at Temenos. Can you give us a range for the second half OpEx that you're expecting?

Charlie, so the additiv transaction closed Friday last week on the 17th. We have maintained the guidance we've given at the time of the acquisition, so basically neutral on EBIT, EPS and free cash flow and slightly accretive on subscription and SaaS and ARR. So this is -- I think we'll probably have a more precise view on -- after Q3. But if you want, you can take -- you remove the marginally accretive, so the rest is purely organic. The organic growth guidance has remained unchanged.

Now on the cost. So we have variable costs, which is sales commission, but it's also bonus accruals, which obviously make a big difference whether you hit your budget or not. And this is basically the underlying, if you want -- the trend we see.

Now on R&D costs, if you probably look at the IFRS numbers, that can be a bit misleading. When we look at the pro forma costs on this one for R&D, you see a slight increase, 2% up in the quarter and 8% in the first half. So we're definitely investing into R&D, especially across our strategic initiatives. So this is actually tracking well.

Now on costs for the second half, yes, happy to provide a bit of color. Given the expectation of a 30% plus growth for SaaS and subscription, you would see also variable costs going up even a bit more than last year. So on a sequential basis, you will probably think about $30 million plus Q3 over Q2 and then for Q4, you probably would have another $35 million over Q3.

And just a small follow-up. Given that your profit expectation for the year is unchanged, why aren't you making bonus accruals this quarter? I would have thought you would have accrued evenly through the course of the year?

No. This is -- the variable accruals usually go with revenue growth and revenue growth of 1%, obviously, compared to 13% in the -- Q1, this is how we do it.

The next question comes from the line of Laurent Daure from Kepler Cheuvreux.

I have 2 questions. The first is on the slippage, you explained pretty well the main reasons. But I was wondering more generally in your discussion with clients, the geopolitical context, the macro, does it mean the topic of discussion would have caused some delays? Or do you believe that in the second quarter, everything that took place had basically no impact? And same for the bank IT budget, do you think some of the banks have devoted most of their budget to memory or hardware? Or same thing, no impact?

And my second question is on the services performance, very high margin and sales, do we have to consider this to be a one-off or a swing for the coming quarters?

Yes, Laurent, let's take the macro question first. So far, we have seen the sales environment really remaining stable throughout '26, and it hasn't really changed also in the first few weeks in July. So not seen a negative impact on pipeline generation or conversion rates. This is what we have seen on those deals. It's really a timing issue. And keep in mind, we have -- we would not have been selected if there was a lengthening of the sales cycles there. So the selection process, if you want, or the entire pipeline process is still the same, 12 to 18 months. Now where I believe -- we have seen some question marks in the entire space. We didn't feel it so far is really some potential spend being diverted towards AI. We have not seen that. It's really going as planned so far. Now where we see -- where we could see a potential impact is if there was a massive global recession, this or next year, then you would probably expect some impact on demand. But for now, it's actually almost the opposite we see. The core banking is really seen as a non-discretionary and strategic. And if we look at especially data and AI, these are for many banks, 2 additional reasons actually for banks contemplating and embarking on a core modernization journey, if you want. And this is what we have seen in the pipeline acceleration. So, so far, macro uncertainty, yes, not visible. Of course, if you talk about EMEA specifically, again, there could be always an individual deal being impacted depending on what's happening on a daily basis. But no broad-based change in the environment.

On services, yes, it's good to get a question on services. I think we haven't had that for a while. Now the strong services revenue growth in Q2 reflects primarily ongoing implementation activity across our client base and the timing of project milestones rather than any structural change. So as you know, services demand continues to benefit from basically the strong sales execution in prior quarters, last year and also Q1. So there is always a delayed positive impact on basically customer adoption. Now our partner strategy has remained consistent. We continue to execute the partner hybrid delivery model outlined at our Capital Markets Day where partners are increasingly used to extend the implementation capacity and support ultimately, us being more scalable in growth markets. So I think as we expand partner capacity over time, the individual quarters may see different mixes between partner delivered and Temenos delivered work, but there has been no fundamental shift in our partner model. And that's as an explanation. But clearly, for this year, we're now, given the strong first half, I would expect services to grow mid- to high single digit overall.

The next question comes from the line of Justin Forsythe from UBS.

I wanted to ask one on -- and apologies for piling on, the deal slippage related point. I just wanted to confirm, you're talking, I think, about a number of deals signed. When you say the majority of deals have been signed into the first few weeks here of 3Q, are you also referring to that on a revenue basis, meaning the majority of that $20 million worth of revenue slipped pulled into the 3Q guide, is that also on a revenue basis?

And on the ARR, it decelerated versus 1Q, about 2 points, should we expect that to reaccelerate to that 13% growth-ish in 3Q tied to, again, the signing of these deals plus the SaaS deal for the North American bank that you signed?

And then just a minor one on additiv. Just wanted to talk a little bit about the business mix there because going through the slides, it looked quite concentrated around a certain customer base. So maybe you could just talk a little bit through what the expansion case is for additiv and how you plan to diversify the revenue over time and sell that into your existing customers?

Justin, many questions. So on the slippage, we always highlighted the majority of the slipped revenue. So we're not talking about the individual number of contracts. It's really the revenue. So we missed, say, 20%. The majority of that has been recovered and signed. So talking about the revenue numbers only.

On ARR, if you look at the contributing factors to ARR growth, we had, I would say, 2 positive ones. So SaaS ACV and maintenance and one negative, which was the subscription growth. So this basically drove the 11%, which was still in line with consensus. I believe and given what we have seen so far in Q3, this should clearly accelerate again, and we feel confident that we do the 12% for Q3, but also the full year.

Now on additiv, we have just -- we have closed additiv, the acquisition just last Friday. Now what we what we have said from the beginning, additiv has a very strong, if you want, stand-alone business because their wealth offering serves not just banks, but also insurance companies, they have some retail clients and so on. Everybody who wants to get into the mass affluent space and have a consolidated offering has a good opportunity with additiv. So this will stay because they will continue to serve those customers, and they have a strong pipeline on their own.

Now what we what we have now started doing is for the mass affluent piece on the Wealth side, which we did not have available, we have started now to cross-selling this into our very strong client base, and this is where we have seen a lot of traction, including Tier 1 customers. And if you've seen their slides and their documentation, they have a lot of Tier 1 customers already. So clearly, that's continuing on the same trend.

The next question comes from the line of Thomas Poutrieux from BNP Paribas.

A couple of questions from me as well. Maybe starting with the competitive landscape. We've heard a few months ago now, Pismo, which is part of Visa, making noise about the fact that they won Wells Fargo for ledger. Can you maybe help us understand how you differentiate them from a technology perspective in core banking? And more broadly, whether you've seen any shift in the competitive landscape recently? That's the first.

And then secondly, could you maybe give us an indication of the size of the U.S. bank that you signed on SaaS recently, perhaps relative to Regions Bank that you signed a few years ago, for instance, would be helpful.

Yes, Thomas. On the competitive landscape first, so we have not -- we are not coming across Pismo so far. So I can't really comment on their offering. What we have seen in the U.S. specifically, it's really the incumbent as always, as you would have expected both FIS and Fiserv being the ones we usually meet in the last round. Outside of the U.S., it's still the same competitive positioning. So we have Infosys and Oracle being the 2 main competitors more on a global basis. We see less local competition or regional competition. I think this is where we see opportunities coming to the market that some banks running on software, where the provider is going end of life or is not able to modernize and invest, and these opportunities are coming to the market. There has been a shift in ownership of the Finastra core banking, as you probably have seen. This is also providing some additional opportunities. But overall, I would say, no change to that extent. The U.S. Bank, we signed early July, is exactly in our target market, lower Tier 2, Tier 3 sizable double-digit billion asset size. This is as much as we can say. From a contract perspective, it's an attractive contract for us. It's a SaaS contract, as we have mentioned, as most of the pipeline in the U.S. is SaaS. Yes, this is as much as we can see. Hopefully we'll eventually be able to also name the bank, so far, we can't to it.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Takis Spiliopoulos for any closing remarks.

Yes. Thanks, everyone, for your questions. Clearly, we want to do better and we'll do better in Q3, but we see this as really a timing issue, no change to the business, none of the deals lost and looking forward to talk to you in October again. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for connecting to the call. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Temenos Acquisition of additiv conference call and live webcast. I am Mathia, the Chorus Call operator.

[Operator Instructions]

The conference is being recorded.

[Operator Instructions]

The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Adam Snyder, Director of Corporate Affairs. Please go ahead.

Thank you very much. Thank you all for joining us at short notice to discuss the acquisition of additiv that we announced this morning. Takis will run through a short presentation, and then we'll take Q&A. I'd note the call is only 30 minutes long, so please can you keep to one question per person so we can get through as many as possible. Thanks very much. And with that, I will hand over to Takis.

Thank you, Adam, and thanks for joining us. I'd like to start on Slide 5 with an overview of the attractive wealth segment opportunity, building on what we talked about at the Capital Markets Day in February and at the outset of our current strategy. We see banks across all geographies focusing on growing their fee-based revenue streams. And in this context, wealth is a major focus area, given a number of structural factors driving the market. There is a generational wealth shift ongoing, and this is changing the demand on wealth managers in terms of innovative and personalized digital services.

The mass affluent segment is growing fast, particularly in emerging markets, which are structurally underserved and where digital offerings are critical to capture demand. And so we see both private banks and retail banks looking to expand their offerings in this area. And strong AI capabilities can increase adviser capacity as well as lower the cost to serve, improving retention and increasing a bank's ability to serve this segment at scale. For Temenos, wealth is a key component of our strategy, specifically for growth levers A and C.

We have a well-defined innovation roadmap and highlighted some specific areas of focus earlier this year, including mass affluent, expanding our ultra and high net worth capabilities and delivering copilots and agents for wealth. This acquisition fundamentally accelerates our product road map, in particular, for mass affluent as well as giving us strong orchestration capabilities for complex customer journeys.

Moving to Slide 6. There are 3 key drivers for this acquisition. Firstly, it extends our reach into the mass affluent segment where we already had ambitions to expand our footprint. It delivers an immediately available offering in this fast-growing market and enables us to evolve from product-centric delivery towards an end-to-end wealth offering in the mass affluent space. Additiv enables wealth managers to offer personalized advice at scale and significantly shortens delivery cycles.

To give a sense of the impact, additiv can shorten the implementation cycle from 12 months or more to 3 to 6 months. Secondly, additiv gives us a strong foundation to expand into adjacent areas such as complex retail and corporate journeys, in particular for credit origination and accelerates our ability to offer a state-of-the-art digital onboarding and origination solution to our client base.

The same orchestration principles can be applied to all complex end-to-end customer journeys, aligning distribution, risk and fulfillment through an integrated orchestration layer. This enhances the flexibility and scalability of our digital capabilities leveraging the strength of our core banking platform and composable solutions. And lastly, the acquisition complements our AI strategy with a purpose-built AI-enabled solution, and we will work with the additiv team to build out more AI use cases across their orchestration platform over time. In short, the acquisition adds a state-of-the-art AI-enabled orchestration layer to Temenos core and composable platform, significantly increasing our offering with wealth.

Turning to Slide 7. We have an overview of additiv today. The company has an international footprint across Europe, the Middle East and APAC, and we will expand this into the U.S. through the Temenos go-to-market organization. It has around 200 employees across 10 locations and 30 customers, including a number of leading wealth managers, banks and insurance companies. Importantly, it has a very strong NPS score and net retention rate of 138%, which underlines the quality of the platform and strength of relationships additiv has built with its customers.

Given its size, there is some customer concentration, and this will evolve over time as we [ sell ] the additiv platform into the Temenos customer base. As you can see, a significant majority of the revenue is generated in the DACH region and Europe. The additiv management team brings with them deep domain expertise and will be an excellent addition to Temenos. There is strong cultural alignment between the 2 organizations, which both have a deep focus on innovation and customer success. The additiv management team will continue to run their business on a stand-alone basis for the foreseeable future, and we will work with them to define and shape the product and innovation roadmap going forward.

Moving to Slide 8. The strength of Additiv's proposition is the challenges it is solving for banks and financial institutions. Margin pressure on banks are pushing them to increase operational efficiency and monetize underserved client segments whilst facing strict regulatory barriers to launching new customer propositions. The ability of banks to respond to these pressures is limited by their legacy digital platforms, which drives demand for modern orchestration platforms that can connect multiple legacy systems and accelerate customer journeys.

And lastly, customer expectations continue to evolve with demand for a broad range of wealth products available through seamless personalized omnichannel experiences often integrated with third-party ecosystem offerings, for example, for international payments. In this context, additiv is providing an omnichannel state-of-the-art solution that is core agnostic and cloud native with a strong partner ecosystem, making it a compelling offering for wealth managers and other financial institutions looking to expand into the wealth space or orchestrate complex customer journeys in other banking verticals.

On Slide 9, we have an overview of the benefits that this transaction brings to Temenos. Additiv enables a significant reduction in time to market versus other providers or banks building for themselves with implementations as fast as 3 to 6 months. This is a significant advantage in a fast-moving, high-growth market like mass affluent, where it is important to be first-to-market with new offerings. This is only possible because of additiv's deep domain expertise and knowledge of wealth and other financial services workflows they have built into their orchestration platform.

I already referenced their above-industry average very high net retention rate of 138% earlier, which shows strong traction with our clients and the embedded growth trajectory. This also creates cross-selling opportunities across the combined Temenos and additiv client base, and we are building a structured plan across the combined go-to-market teams to capitalize on this. And lastly, as I mentioned, the platform fits very well with our existing AI strategy, notably on our product pillar. We will work with additiv, leveraging each other's AI expertise to build new AI agents for specific use cases. This will continue to support Temenos structural AI advantage.

Moving to Slide 10. I thought it is useful to show this slide again that we first showed at our Capital Markets Day, so you can see how additiv fits into the Temenos AI era tech stack. Temenos already has a strong orchestration layer for retail customer journeys in Temenos Digital and Journey Manager. Additiv complements our existing capabilities in the workflow and orchestration layer with a platform capable of orchestrating more complex customer journeys, in particular, in mass affluent. And over time, we will expand this into complex customer journeys in other banking verticals. So this acquisition is highly complementary to our existing platform, leveraging the Temenos core banking intelligence and execution layer and accelerates our offering in the AI-driven orchestration layer.

And lastly, on Slide 11, we have an overview of the transaction and its impact on our guidance. We are acquiring 100% of additiv for an approximately equal mix of cash and equity. The deal is expected to close in early Q3 '26, subject to customary regulatory approvals. Our Board commissioned an independent expert to provide a fairness opinion. And as I mentioned earlier, the founder-led team will continue to run additiv on a stand-alone basis after closing of the transaction, reporting directly to myself.

In terms of the impact on guidance, the acquisition is marginally accretive to ARR growth and subscription and SaaS growth in 2026 and has a neutral impact on EBIT, EPS and free cash flow. Lastly, our pro forma leverage is expected to be within our target range of 1x to 1.5x by year-end.

With that, operator, please can we open for questions.

[Operator Instructions]

The first question comes from the line of Josh Levin from Autonomous Research.

Can you just explain what's the rationale for running the new company on a stand-alone basis for the foreseeable future? And does that mean no cross-sell for the time being?

Josh, no, there is clearly -- we have learned some lessons. And clearly, there is a long-term integration plan. But the near-term integration plan is really that additiv will operate as a largely stand-alone business with its own product stack, R&D organization and go-to-market for the immediate future. And then we'll start working with additiv post closing of the transaction to shape their R&D roadmap to align with Temenos' strategic priorities. I think this approach will ensure the preservation of additiv's successful culture and integrate our past learnings as well.

I think after a period of ownership, we will evaluate if there are areas where closer collaboration and integration is to the benefit of all stakeholders, especially clients and [Technical Difficulty] In terms of the synergies, I think if we look at -- there's no specific guidance, but the near-term focus is on expanding the wealth offering and the AI-enabled orchestration layer technology. And there are a number of areas where we see revenue synergies, number one, accelerating Temenos's mass affluent proposition, which clearly represents a comparable serviceable addressable market to the high net worth and ultra-high net worth layer.

Then cross-selling additiv's wealth orchestration capabilities into Temenos' existing client base and also expanding additiv's reach into markets where Temenos has a strong penetration, but additiv does not yet do, and that includes the Americas, but there are many markets in Europe, Middle East, Asia Pacific and also LatAm building out new complex orchestration journeys across all the banking verticals and then also building out AI capabilities across additiv's orchestration layer. So there are quite a number of synergies, which we see.

The next question comes from the line of Frederic Boulan from Bank of America.

Just a quick one around the funding structure. Why did you decide to go with the share issuance considering the -- is it a question of consideration of the size of the deal? And anything you can share around the kind of founder lookup?

Fred, yes, I think the selling shareholders agreed to a 50% equity consideration or 50% consideration taken in shares as they clearly see the strong growth potential and value creation for Temenos based on the strategic roadmap and strong first year of execution we have seen in 2025 and also gives them exposure to the compelling Temenos growth story and the growth potential for the combined Temenos and Additiv group.

I think this was something very key for them, given the growth potential they see as a combined base. In terms of the -- if we look at the lockup, we have not disclosed the information on any lockup for shareholders. I think having taken 50% shares as we believe in and [ once ] exposure to the growth shows a lot about the commitment for them of Temenos and the combined group.

We now have a question from the line of Toby Ogg from JPMorgan.

Just I think this is the first notable acquisition you've done in a while. And I guess the market has somewhat got used to a rhythm on the buyback side. Does this signal a sort of shift in terms of appetite for M&A? And, yes, just how are you thinking about capital allocation now going forward?

Yes. Toby, I think there is no change to what we have said at the Capital Markets Day and what we have been saying before. Clearly, we want to use our capital for the best of Temenos and all its stakeholders. So it does not change our approach to that. And given that 50% of the consideration is paid in cash, there is still capacity for a share buyback also this year, yes.

So no change to our capital allocation framework, which prioritizes organic investment. And then we retain enough ammunition for share buybacks and M&A. So in the future, I mean, this was -- this is a bolt-on acquisition also from a size perspective. So clearly, we'll return to doing regular share buybacks already this year, but especially also next year if there is no additional bolt-on M&A. No change.

The next question comes from the line of Charles Brennan from Jefferies.

You referenced it in your prepared remarks that the NRR at 138% is particularly high. Can you just give us the drivers behind that? What's driving the cross-sell? Is it as you roll out across geographies for customers? Is it just account expansion? Like what's driving that NRR? And then it looks like additiv was founded something like 25 years ago. It obviously hasn't been growing at 38% consistently since it was founded. It feels like this business has reaccelerated more recently. Can you give us an average growth over the last 3 years or 5 years, something that's a little bit more representative of go-forward growth rates?

Charlie, yes, on the net retention rate, this is also reflecting the high NPS score of 90, which I've never seen in the industry, which shows once the clients are onboarded, not only they can grow across different geographies, given these are larger wealth players and banks, but it's mainly driven by 2 pillars.

Number one is you put more volume on the platform, yes, so more accounts, more customers, more assets, more products, but then also more use cases. And you may start with a robotweiser, then you add mortgage origination and so on. So it's really growing across 3 dimensions, which shows in the very high net retention rate. In terms of the history of the company, well researched. What we're looking at -- what we're looking at additiv today is quite different to its roots. So clearly, the company has in the last 3, 4 years, built a complete cloud-native orchestration wealth platform and has driven a lot of success through their -- through the platform.

So the -- I think if we look at just the last 3 years, there has been very strong double-digit ARR growth in this business. And then finally, on the forward-looking part, clearly, we would expect even on a stand-alone basis, this business to continue the kind of strong ARR growth trajectory.

[Operator Instructions]

We now have a question from the line of Justin Forsythe from UBS.

Congrats on the acquisition. So just wanted to circle back on the wealth business itself. If you could just remind us again, I think you classify wealth within your kind of core banking proposition, but maybe you could whittle it down and remind us again what the percentage of revenues or subs -- SaaS and subs revenue that wealth is. And I was just wondering as well, if you could make a delineation between wealth and the core banking account product from an industry perspective, what percentage of that is in-house versus third-party spend? Is it a similar, call it, 1/3, 2/3 split as you would see in the core banking market? Or is there a bigger opportunity to move from in-house to third party?

Justin, on the first one, on the first one, we have -- we always say the core is around 80%, 85% if you add wealth and obviously, there is a wealth front part and the wealth back-end part, that's maybe 10% of the group. So it's clearly been growing quite nicely. The reason for the acquisition or one of the rationales is we have been quite strong and still are in the ultra-high net worth and high net worth segment, which is still showing very good momentum.

But clearly, especially in emerging markets and with new -- a lot of new players also coming to the market, the mass affluent, and we were not present, and this is really plugging that hole. In terms of in-house versus third-party spend, as you can see from some of the client names we have shared, even larger institutions moving to third parties, I think -- and we need to check this, but I think the penetration is probably similar to the core banking space.

Got it. And I just wonder one quick follow-up, if you don't mind. How were you made aware of this company? Were you competing against them? Did you get a lead from somebody? Are you working with them from an integration perspective at all and you thought it pertinent?

Yes. So this is -- if you're playing in the banking space, clearly, we were aware and we are aware of many players in the space. When, I think, the company or the selling shareholders decided to run a process, clearly, we were raising our hands and also being interested, given the good fit. So it was always a founder-like company. It was always a company known to us, especially given it's a Zurich-based company. But then, yes, when the process run by an investment bank, clearly, we were also contacted and this is how it went.

Ladies and gentlemen, that was the last question. The conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Temenos Q1 2026 Results Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Takis Spiliopoulos, CEO and Interim CFO. Please go ahead, sir.

Thank you. Good afternoon, good evening. Thank you for joining our Q1 '26 results call. As usual, I will talk you through our key performance and operational highlights before updating you on our financial performance. Starting on Slide 6. We delivered a strong performance in Q1 '26 across all our key metrics and our product revenue continues to grow above market. This follows on from the strong performance in 2025, where we delivered above-market growth in product revenue in the first year of our strategic plan. The sales environment remained stable through the quarter. And in fact, we had a particularly good performance in the Middle East and Africa, signing a number of deals with new and existing customers. Importantly, we also saw good momentum in the U.S.

As we discussed at our Capital Markets Day, we have a strong pipeline of deals in the U.S. and several of these are progressing nicely through the sales process and we fully expect to sign some of them this year. Of course, it is hard to give precise timings given the complexity of the deal process. But I'm confident we will convert the U.S. pipeline into revenue and this is one of our key measures of success for the business this year. We also delivered another strong quarter of growth for maintenance, again, largely driven by premium maintenance signings as we continue to upsell across our customer base. We have a well-funded investment plan in place for the year, with planned incremental investments of $28 million to $35 million partially offset by around $10 million of cost efficiencies.

One quarter into the year, we are on track with our investment plan, and I would like to highlight that we made several senior hires in sales and product. I'm also pleased to announce the hiring of our new CFO, Daniel Schmucki, who will join us on August 3 this year. Daniel brings a wealth of experience, most recently as CFO of SIX Group and before that, as CFO of publicly listed Zurich Airport. Daniel has a strong track record in building and leading high-performance teams in complex international businesses and he will be an excellent addition and strong partner for Executive Committee and senior management. Turning back to the business. We delivered good operational leverage in the quarter with a cost base growth from investments we made last year, offset by strong revenue growth in Q1 '26. And lastly, we have reconfirmed our 2026 guidance and 2028 targets.

Moving to Slide 7. I'd like to highlight some of the key deals with clients in the quarter across different geographies and peers. We had a number of expansion deals with existing clients, including a Tier 1 bank in Japan for new core and payments solution and a leading Swiss private bank expanding their payment suite across several geographies. In SaaS, we extended our partnership with a digital arm of a leading bank in GCC, and we signed with a leading bank in APAC for core, payments and FCM to support their launch of a new digital bank serving retail, corporate and wealth clients. The diversity of deals across customer tiers, geographies, business models, products, and delivery types demonstrates the breadth and depth of our banking domain knowledge, customer trust and product capability.

Turning to Slide 8. I'd like to highlight the value we are delivering to our customers. Given all the focus on the Middle East, I'd like to show one success story from the region this quarter with Al Salam Bank in Bahrain going live on our core banking platform. They selected Temenos to future-proof their business as we were able to demonstrate our platform's scalability and support their future growth. They wanted a platform that could enable market-leading digital services, support their AI initiatives and help them meet their regulatory compliance requirements. In the implementation, we replaced multiple siloed legacy systems with 2 acquired banks migrating to our single platform, delivering a significant increase in capacity and throughput and enabling the bank to launch a new digital app for real-time integrated services, thus creating new revenue opportunities. This is a great example of what our platform can do for banks looking to scale with confidence and reflects the kind of partnership and execution that sets Temenos apart.

Moving to Slide 9. We showed this slide at our Capital Markets Day in February, but I want to reiterate our positioning in the AI era. AI is clearly reshaping technology markets. But banking is not a typical technology environment, and that distinction matters. Banks operate at the intersection of 2 of the highest thresholds in technology, product complexity and customer risk aversion. This is not an environment where generic AI solutions can simply be dropped in. The requirements are fundamentally different, and that is where Temenos' competitive moat is strongest. On the product side, banks demand trusted domain expertise that handle highly complex workflows, proprietary data and platforms that can be extensively audited. These obligations do not shrink with AI. As banks automate more, these obligations become more concentrated in critical systems.

From a customer risk perspective, our solutions are mission critical. Banks operate in one of the most highly regulated sectors and have 0 tolerance for errors or hallucinations. Every decision must be deterministic. The cost of getting it wrong is existentially high. That's why we sit in the upper right quadrant of this matrix, where both product complexity and customer risk aversion are highest as is the threshold for AI adoption. But the benefits of AI are real and adoption will increase over time, and Temenos provides the regulated backbone for banks globally. By embedding AI into our platform, it allows customers to automate, scale and innovate without compromising on compliance or reliability. We are not only protected from AI innovation from peers, incumbents and customers, it is increasingly foundational to our right to win.

Turning to the next slide. We have a well-defined AI strategy to capitalize on our advantage across our products, our process and our people. Our strategy will lower total cost of ownership for our customers to embedding AI across our products, and it will speed up our software development life cycle and support customers with GenAI assistance. And lastly, it will empower our people to leverage AI and enable greater productivity. As I mentioned before, the adoption threshold for AI in the banking sector is very high, where there is high product complexity and significant risk aversion. This combined with deep customer trust and domain knowledge creates a strong competitive moat for Temenos and gives us the right to win in the AI era.

Moving to Slide 11. I'd like to give you an update on the progress we made in the first quarter on executing our strategy. Our product teams have made good progress on the product road map and we are on track for several new product launches in the second quarter across core, digital, AI and composability while also increasing the range of AI capabilities embedded in our products. We have continued investing in the business, in particular with several senior hires in our global sales organization. These individuals bring significant expertise to Temenos to further support and drive our core banking sales pipeline as well as expanding our team responsible for delivering large complex deals with Tier 1 banks in particular, which requires a specific skill set and the ability to manage highly complex negotiation to a successful closing event.

We also launched our new pricing and packaging in the first quarter, which will drive better value for our clients and for Temenos by simplifying our approach, especially for deals involving multiple modules or products. And lastly, we continue to roll out AI tools across the company, most notably including the rollout of Anthropic in our product teams to enhance our software development life cycle. I will now run through our Q1 '26 financial highlights, focusing on constant currency non-IFRS financials. On Slide 13, we delivered strong ARR growth of 13% and despite the headwind from the BNPL client that moved off our platform at the end of last year. For those interested, we have shown the underlying growth rates for all our key metrics this quarter in the appendix excluding the impact of the BNPL client.

We had good growth this quarter across all our recurring revenue lines, both subscription and SaaS as well as maintenance. And this was also reflected in the strong product revenue growth of 14%, well above the market run rate growth. Turning to Slide 14. Subscription and SaaS grew 12% in Q1 '26 continuing the strong performance from the previous year. As I mentioned earlier, there has been so far no visible impact from events in the Middle East with the region having a strong quarter in terms of deal signings with a good performance in SaaS in particular. Outside of EMEA, we also saw broad-based growth across client tiers and products. This was complemented by strong growth in maintenance and also decent services growth, which together drove total revenue growth of 13% in the quarter.

Moving to Slide 15. Both non-IFRS EBIT and EPS grew 20% in the quarter. The year-on-year increase in our cost base is reflecting the significant investments we made throughout 2025 in product, go-to-market and operations. However, this was more than offset by the strong revenue growth and benefits from efficiency gains in the quarter. Pro forma non-IFRS R&D costs were up 14% year-on-year in constant currency as we are accelerating our investments into product as communicated in February. All this together demonstrates the strong operational leverage in our business. Premium maintenance, in particular, attracts a high margin and continues to help drive the growth in profit.

Let me highlight a few items on Slide 16. ARR stands at $860 million despite the headwind from BNPL giving us excellent visibility on future recurring revenue and cash flow. The 15% growth in maintenance revenue was largely linked to strong premium maintenance signings as our sales teams continue upselling to our existing client base. We continue to guide for maintenance growth of 7% to 8% for the full year as we are taking a prudent view on the remaining demand for premium maintenance across our customer base. On profitability, EBIT margin improved by 190 basis points to 32.7% year-on-year, reflecting strong operating leverage and some benefit from cost efficiencies.

Moving to nonoperating items on Slide 17. Net profit was up 19% in Q1 '26 and EPS grew 20%. Our EPS continues to benefit from the strong growth in profit and the lower share count from the shares canceled at last year's AGM from prior buybacks. We saw an increase in net finance charges and taxes in Q1, partially offset by FX. We had a slightly higher tax rate this quarter with the expected full year tax rate unchanged at 19% to 21%. On Slide 18, free cash flow for the quarter came in at $60 million, growing 22% year-on-year, driven by strong ARR growth, good EBIT to cash conversion and our disciplined approach to capital allocation, which we outlined at our Capital Markets Day in February. Our strong growth in free cash flow is a key metric for us and is in line with our expectations, given we are now in the fourth year since introducing subscription contracts in 2022.

We raised our 2028 target for free cash flow in February this year, reflecting our confidence in the strength of our operating model, balance sheet and cash generation. On Slide 19, we set out our changes in group liquidity in the quarter. We generated $204 million of operating cash and bought back $104 million worth of shares as part of the buyback launched in December. We ended the quarter with leverage at 1.3x comfortably within our target range of 1.0 to 1.5x. Turning to Slide 20, a few comments on our debt, leverage and capital allocation. We completed our share buyback program for a total of CHF 100 million in April 2026. With shares representing 1.9% of registered capital purchase to be used for general corporate purposes. This was the second share buyback we launched in 2025 with the first for CHF 250 million completed in August 2025.

The shares purchased in that larger buyback are to be canceled at the AGM in May this year. Our reported net debt stood at $609 million at quarter end. We reiterated our disciplined approach to capital allocation at our Capital Markets Day in February. Our priority is to invest in our business, in particular, to accelerate our R&D road map and using share buybacks to ensure capital efficiency and enhance shareholder return while maintaining flexibility to support our growth levers through bolt-on acquisitions. We also have a progressive dividend policy, which reflects the recurring nature of our business model.

Next, we have reconfirmed our 2026 guidance, which is non-IFRS and in constant currency, except for EPS and free cash flow, which are reported. The guidance reflects the strong performance in 2025 and the investments we made last year which we are now starting to benefit from. The guidance includes the headwind from the termination of a BNPL client in 2025, which we have given on the slide. There will be no further headwind from this beyond 2026. And lastly, we have reconfirmed our 2028 targets based on our strong first year of execution, confident in our strategic positioning and good visibility. Operator, please can we open for questions.

[Operator Instructions] Our first question comes from Charlie Brennan from Jefferies.

Congratulations on good results. Maybe I'll start just with a geographic question, if I can. If I've done the numbers right, it looks like most of the growth in the quarter has come from Middle East and Africa, perhaps maybe not what I would have expected given some of the news flow that we've seen. Can you give us a sense of whether you felt any disruption in March and could the numbers have been better? And I guess, aligned to that, it looks like the U.S. was broadly flat in the quarter. Was there any sense of disappointment for you in the U.S.?

Charlie, thanks for the question. So maybe first on, I think, the situation in the Middle East. And clearly, when they started at the end of February, we, like everyone else, were worried about the safety of our people. So we went into this like prepared from past events like COVID. So the company handled this really well and especially locally. So thanks to everyone. Now from a business perspective, I think it's worth taking a step back in Middle East and Africa. These are 2, let's say, large regions broadly balanced in terms of contribution. So both the Middle East and Africa, with Africa having seen, in the past, quite strong growth, stronger than the Middle East.

We have, throughout the month and actually also into April, seen overall a stable sales environment and also specifically to the Middle East and Africa region -- or Middle East, no change. So I think this is important to note. And while there was some limited disruption of travel at times, we should note and if you look at the situation on the ground, governments are putting significant resources and everything they can to keep business operating as normal. This is what we saw throughout March. So yes, no impact seen in terms of -- no negative impact seen so far, either on pipeline generation or conversion rates, and this is what we have seen also in the first few weeks in April.

Now looking at the other regions. I think on specifically the Americas, U.S. developed actually as planned, LatAm as well. Europe was probably also in line where we saw some, I think -- because we had a tough comparison base with Asia Pacific. But overall, I think the performance was pretty much in line what we expected. We didn't -- I think we didn't save deals or anything for Q2. So nothing actually specifically to call out in terms of the regional performance.

The next question comes from Frederic Boulan from Bank of America.

If I can ask a question on the revenue guidance. So we have subscription and SaaS growth of 12% in Q1. You've kept full year guidance unchanged at around 9%. It would be good to discuss any specific phasing we should expect or specific points. And maybe we can also extend that question to the EBIT guidance, 20% in Q1, guidance of 9% for the full year. So here as well, I mean, any specific items we should have in mind? Or is just a guidance framework prudent at this stage?

Fred, so on guidance, I mean, we've never raised guidance after Q1. Q1 is like every year, the smallest quarter. There are still quite a number of uncertainties out there on the macro side. We don't know what's going to happen. So I think we having a good start is really helping with the full year guidance visibility. But at this point in time, I think it's the right approach to stay prudent. Also, if you look at the details, clearly, we had good performance in subscription and SaaS and maintenance and services. So across the board, we invested as planned. So the upside ultimately on the growth came really from stronger top line, demonstrating the operating leverage. Yes, we're tracking ahead on all KPIs. Q2 is a bit a more difficult comparison base. Let's see where we end up then. But for now, I think it's the right prudent approach.

The next question comes from Toby Ogg from JPMorgan.

Maybe just bigger picture one. We've obviously seen over the last couple of quarters, better momentum, and that's obviously been translating into upward revisions to expectations. When you take a step back what do you think are the key drivers that have been yielding that upward momentum?

Toby, good question. Overall, if you look at the track record over the last few quarters where we put a lot of effort into transforming Temenos across the organization, clearly accelerating on the product road map, putting a lot of investments into the company across go-to-market and also product and operations. All this on the back of, let's say, stable sales environment. We have seen an environment where banks were printing good results. And I think that's also the expectation going forward. It's also -- so that's -- if you want a stable sales environment, coupled with a more determined, more focused organization is clearly something that's helping us on top, and this is where we always believe it's worth and the first time we do upfront investments, we're reaping now the benefits of that.

We -- if you go back early 2025, we said it's going to be an investment year. We've done the investments. We said in February, we're accelerating the investment because there is a very, very large revenue opportunity. And this is what we're seeing the benefit from. And the one element, what I mentioned, expanding what we call the large deal team. This is also driven because we see, as we've seen in the past years, more and more large deals coming into pipeline, which -- where we need -- where we want to have dedicated resources driving those deals end-to-end. And this is across the regions, and this is across the tiers, not just Tier 1s, so this is -- again, you need to invest ahead and reap them the benefits, and this is what we are seeing and obviously striving for more.

The next question comes from Grégoire Hermann from Barclays.

Maybe just I think you had clearly a good start into the year. But I think Q2 is maybe a very difficult comp. Can you tell us maybe how is the pipeline coverage looking like next quarter? Can you provide any indications on the level of growth we should expect for the second quarter, please?

Grég, so as we said at the start of the year, that was 2 months ago when we initiated -- when we issued the initial guidance for 2026, we said the pipeline coverage is there for delivering those numbers, also stating we want to be prudent. So 2 months down the road and as you would expect with more salespeople being onboarded and being now live and generating pipeline, the pipeline evolution has been very pleasant to put it like this. What we also said is there are a number of large deals embedded in our full year guidance, and we didn't sign any large deals in Q1. We had a good start in Q2. So we're always taking a risk-weighted approach to large deals, yes? Not all of them need to come. So we're confident that we can grow our SaaS and subscription as well also in Q2 despite the, yes, tougher comparison base.

The next question comes from Mark Hyatt from Morgan Stanley.

Congrats on the results. I've just got 2, please. Firstly, if we just touch on the maintenance side of things. Obviously, you called out strong growth there, 15% and strong premium maintenance signings were a driver of that. Obviously, you've given some guidance and help around how we should think about the full year result. But could you just tell us a little bit more around how sustainable that tailwind is for the rest of the year? How should we think about the phasing? And if you can quantify how much of that upsell opportunity you've already worked through, that would be really helpful. And then secondly, maybe just a bigger picture question on AI. Could you talk about what you're hearing from bank's C-suite members today on the AI type priorities? Are they still mainly focused on productivity uplifts and customer-facing use cases? Or are they starting to think about AI more deeply being embedded in core banking and operations? How are they engaging with Temenos as a strategic partner for that at this stage?

Mark, so on maintenance, yes, 15% growth was a bit ahead of the full year growth rate we have envisioned, we said about 7% to 8%. But you need to think about it's Q1 '25, which posted a relatively benign comparison base, which is going to become incrementally more difficult to lap. And clearly, we see -- we're always positively surprised and continue to see a good uptake of our premium maintenance offerings on the one hand. But it's also we have -- we see very little downsell or attrition on that, yes? So that helps basically with the -- on the renewal of these maintenance offerings. Overall, I'm not going to -- I can't give you that level of detail how much opportunity there is still there. But clearly, we are -- it's still a very small part of our overall maintenance number. And therefore, I think the growth will continue. I think with 7% to 8% for the full year, clearly, growth rates probably coming down into single digits for the rest of the quarters. I think this is the phasing we would see.

And then longer term, so '27 and beyond, we said about 6% -- 5%, 6% is the right number. Again, let's stay prudent because we've been positively surprised before, but I think we're now seeing really the tracking according to what I just said. On AI, there is -- basically, there are 2 areas where we see demand from our banking customers. On the one hand, is overall use cases around the core, if you want, whether it's in digital or something like FCM AI. And this is where we're going to launch a number of new ideas, a number of new products this year. What we do with our clients, with our banks is really develop those use cases in what we call a design partnership, we're trying to find ideas where we can basically take across our installed base. If something is very bank specific, we're not the ones to basically do the custom development of that.

But if we find AI use cases like FCM AI, this is something we can then deliver to our installed base. The other area where I think clients are very keen to get AI expertise is -- and this is the main questions they're asking us, and we're developing some ideas, trialing some ideas, both ourselves, but also with partners is can you, with the help of AI, help us accelerate the implementation time line, the upgrade time because this is where they would save a lot of money. So far, we don't have discussions on AI in the core, but really those areas, specific use cases around the core in digital, in FCM and then can you help us accelerate the implementation and the upgrade time because this is where they spend a lot of money. And we have some ideas, but I think it's still early to talk about.

The next question comes from Pavan Daswani from Citi.

Could you maybe come back to the EBITDA growth guidance question, given the strong start to the year. Are there any kind of phasing of costs that we should be thinking about for the rest of the year particularly, you mentioned some senior hires in the quarter? And are there any further investments needed to drive the pipeline conversion that you kind of aim for, for the rest of the year?

Pavan, so there is, I think, nothing unusual what we plan in terms of the phasing this year. As you heard, we have an investment budget of $28 million to $35 million, which is clearly something we're putting in place, especially in the first half of the year. There's also the exit cost. We exited 2025 with our fully invested cost base. There is clearly -- if we continue to see if there is upside on the top line, this will -- this shows the operating leverage on this. But again, as with the top line, I think we want to stay prudent. We want to see -- so far, we see the investments coming through. There is nothing extraordinary planned. The bulk of investments really go into product acceleration. So -- and this will continue throughout the quarter. So I think the cost base as you would expect, let's say, normal seasonality. And so let's say, Q2 will be maybe, I don't know, $12 million to $15 million higher as we had last year, yes, and then also increase slightly in Q3. And then in Q4, you have basically all the variable costs coming in, yes. So this is overall the $50 million cost increase year-on-year.

The next question comes from Mohammed Moawalla from Goldman Sachs.

Congratulations on the quarter. I just wanted to concentrate a bit on North America. I know sort of 18 months back with regard to add more capacity, you've obviously been bringing some of that on. Can you give us a sense of sort of the pipeline? I know you touched on potentially some larger deal wins to come how is North America kind of a key part of that? And more importantly, obviously, in terms of the strategy more broadly for North America, are you focusing more on that kind of Tier 2 of regional banks and credit unions versus a very long sales cycle of kind of Tier 1 deals?

Mo, on the U.S., so we have seen and we continue to see good progress on a number of -- a lot of deals through the pipeline, as you would expect. Now given this is all new logos and new procurement, it's usually difficult to quantify the time until really you have -- from being selected until you have the contract signed. But this is what's driving the pipeline and where those deals stand, which is driving our confidence that they will get converted in 2026. Now if I look at the pipeline overall, and we always targeted those 150, 160 banks we have a very substantial number of these banks is in our pipeline, which shows also the effectiveness of building pipeline. We still have to convert those and maybe not all will turn into deals. But clearly, that drives our confidence on the -- in the U.S. Now what we see is given we hired a lot of salespeople, what we also see is the U.S. innovation hub is really making a difference for the U.S. pipeline because it's something which we didn't have before.

It's a different approach, and it's resonating well with prospects. The other thing which we didn't do before is investing upfront in not just go-to-market, but also the support organization and the backbone. And this is something clients want to see there happening because these are long-term decisions they're taking in the core space. So I think where we still have opportunities is that, as you mentioned, in larger deals, and this is why we're expanding the teams. This is not specifically to the U.S., but clearly also in the U.S. We still haven't moved away from a target market in the U.S. It's still the lower Tier 2, Tier 3 market as occasionally, you get also Tier 1 opportunities. But clearly, again, we're taking a very risk-weighted approach on large deals, whether they are in the U.S. or in any other country. So overall, we're feeling very confident about execution of the pipeline.

The next question comes from Justin Forsythe from UBS.

Congrats on a good start to the year. Just a couple of questions from my end, if you don't mind. The first one, I just wanted to unpack that Middle East and Africa number a little bit more. Understood that you said earlier in the Q&A that Africa is contributing a little bit more than the Middle East. I think you talked a little bit about that win in Bahrain as well. Maybe you could just be a little bit more specific on the countries within Africa, which you're seeing strength and the type of banks which you're working with and what types of products you're selling them? Is it the Islamic banking solution? I think you've talked about that in the past?

Or is it something else? And maybe what degree of continued strength in the Middle East is baked into the guidance versus closing of some of those U.S. deals popping through the pipeline? And then just a broader high-level question for my second one. Can you just talk a little bit about the mix within core banking between some of these different factors? So for instance, retail side of core banking, corporate, LMS and wealth, clearly, it encompasses a lot of different types of products. And what is expected to be the go-forward driver of growth, the most material go-forward driver of growth within those?

Justin, thanks for the question. Let me start with Middle East and Africa. What I said is it's broadly balanced in terms of size, but Africa had the -- more recently, the faster growth rates, yes? So if you look at back some of the last few quarters, yes? We don't -- I think if I look at the pipeline across both the Middle East and Africa, it's very strong. It's very healthy. And Middle East and Africa has been a strong performance over the last couple of years, a lot of structural reasons. So we don't expect any change or we don't assume any change in conversion rates, neither an improvement nor a deterioration for the rest of 2026. As we've shown on one slide, the -- we're doing everything in Middle East, yes. It's also picking up in terms of SaaS.

We signed this Tier 2 bank where basically they expanded the core banking partnership with their basically digital subsidiary in GCC. So that's just one example. In terms of products, it's really front to back for many banks, but also core, also digital. I think wealth, we're seeing quite some pickup as well. Islamic banking that remains a key pillar. So it's really across the products we see for Middle East. On your second question, it's quite an interesting one. So wealth, I think we see wealth for especially the larger banks. We're especially dominant and play in the high-end ultra-high net worth piece. So that's for the wealth opportunity. If you look at pure core, it's mainly retail and corporate. What I would say is the last few years, so post COVID, you saw a lot of demand for retail because this is where banks felt the pressure from basically the nonincumbents, yes, with price pressure.

So they needed to lower the cost. So their investment was first and foremost in retail because they wanted to protect their offering, their profitability. I would say in the last 2 years because they basically fought off the nonincumbents to a large extent. Now their focus has turned more towards corporate. There is still very good profitability and banks want to protect and even expand profitability. And there is much less competition on the corporate side from non-incumbents, whether it's trade finance, treasury and so on. So this is where we see clearly -- from a pipeline perspective and from a demand perspective, this is clearly where we have seen the pickup in the last 2 years.

The last question comes from Josh Levin from Autonomous Research.

Just 2 questions from me. Takis, you said there's no visible in -- can you hear me?

Yes, we can. Yes, Justin, yes, we can.

Yes, yes, yes, you said there's no visible impact so far from the war in the Middle East. But if the war resumes or oil prices stay high and we're heading towards sort of a global recession that some people are talking about, how do we think about how exposed Temenos is to that? How do bank executives think about sort of this as -- they're going to push through this because this is really a long-term project versus actually retrenching on spending on software because they are concerned about the recession? And then secondly, the Orlando investment hub, I think it's been open since June, so it's maybe a bit early, but any lessons so far, any successes, anything that's unexpected from that? I know it's a key part of the U.S. strategy.

Josh, yes, unfortunately, we don't have a crystal ball here at Temenos. So we take a prudent view on uncertainty and macro risks coming back to the Q1 performance and the guidance. So what we believe is -- and this is the lessons learned from the past, if you see -- as long as you see only a short-term disruption to anything, so short term being a few months, there is maybe a lower likelihood for a recession. If this keeps going and lasts into well into, I don't know, Q3, the second half, then probably you would expect to see an impact on overall GDP growth and maybe a higher risk for global recession. What we have seen, again, in the past is sometimes countries tipped into like technical recessions without any impact on demand for our software, yes?

So we're not -- we have not been benefiting in upward cycles if economies were booming, but also being less affected in, let's say, more recessionary environments as long as there is no massive external event like GFC or COVID. So for now, the way we look at this is obviously being very alert on what's happening day-to-day. Again, the countries there, and we have most exposure is obviously Saudi and UAE, much less on the other ones. Clearly, the governments are doing everything to keep operating normally. They're open for business. And I think this is how we see the banks behaving so far, yes? So this is as much as we can say, again, taking an overall prudent view on what can happen and will happen. On Orlando, it's really a success story from different angles.

It's on the one hand, we're getting very good, highly skilled people there. It's something we see resonating well also for our prospects. We have a lot of banks coming in, ideaizing, looking at what can be done. We have very interesting demos there. And it's really the hub where we keep investing and keep hiring as we do in India as well. It's -- we do a lot of 1 or 2, ultimately, a lot of U.S. product-specific development there, which is obviously also resonating well with clients. We're now about 70-plus people, and we'll keep expanding there because, yes, we have demand for U.S.-specific product, and we want to deliver, but clearly also have a strong pipeline in the U.S. So this will -- I'm very happy about the progress in Orlando.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Takis Spiliopoulos for any closing remarks.

Yes. Thanks, everyone, for joining us for this Q1 update. Looking forward to update you in July with our Q2 '26 results.

Good afternoon, everyone. My name is Adam Snyder. I'm Director of Corporate Affairs for Temenos. Thank you very much for joining us for our 2026 Capital Markets Day, both for the people in the room and those joining us via the webcast.

We have a pretty packed agenda. You'll be hearing from Takis on strategy, Barb on product and technology, Will on go-to-market and customer success. We will then give you a coffee break. And after that, you'll hear from Jayde on people and culture. And finally, Takis to wrap up on our financial framework and FY '28 targets.

We will be taking Q&A at the end. So if could ask you to hold your questions until then. [Operator Instructions]

So with no further ado, I'll hand straight over to Takis to kick us off.

Thanks, Adam. It's great to be with you here in London for my first Capital Markets Day as CEO. Many of you will know me from my tenure as CFO. So today, I have two objectives. One, reflect clearly on the progress we have made. And two, I share how I see Temenos' next phase of growth.

As you have seen with our full year 2025 results, it has been a busy and productive first 12 months of our strategy. We have remained 100% focused on execution, leading to considerable progress and delivery of results ahead of our plan. Our addressable market remains resilient and our win rates are strong. And importantly, the conversations we are having with clients reinforce our strategic direction. We have made robust investments in our platform and our product and go-to-market as well as making progress on our U.S. expansion. This remains a strategic priority for Temenos. I will come back to these points in more detail later.

Let me start with our vision and mission that you see here. They shape our product road map, our investments and how we show up for our clients. For Temenos, Modernization is about helping banks to deliver absolute reliability while continually evolving. That balance is difficult. And it's why Temenos has been able to support banks and financial institutions for over 30 years in a highly complex and ever-changing landscape.

When we say leading banking forward, our ambition is clear. It means being a company that executes with precision operates with integrity and innovates with purpose, focusing investment on areas that genuinely improve client outcomes. We provide a unified platform that helps banks scale with faster time to market and higher levels of automation and more personalized and impactful experiences for their customers. Ultimately, it means Temenos sets the gold standard in products, technology and delivery. We give banks the foundation they can rely on and the freedom and confidence to move forward at their own pace without disruption.

I'll now turn to Temenos today and our strong foundation. We have a broad platform that is fully integrated front to back. In our platform, core banking contributes over 80% of our product revenue and digital, another 11%. In terms of our reach, we are present in more than 150 countries, and we are particularly strong in Western Europe and emerging markets. with a good presence in all the mature markets as well, like Australia, New Zealand, Canada and a growing footprint in the U.S., which is, as you know, a strategic growth focus for us. We provide support across all the banking domains, primarily in retail and wealth and increasingly in corporate banking. Across all of this, we offer customers choice across deployment models, on-premise, private and public cloud, hybrid and SaaS. Lastly, we have a large global customer base, which continues to grow and modernize with us. We have been a leader in the IBS core banking sales league table for over 20 years. showing the trust banking clients have placed in Temenos.

I want to say a few words about our leadership team. I am confident we have the right team in place to deliver our strategic road map. This is a group with deep industry expertise, strong execution discipline and a shared commitment to a culture of accountability empowerment and performance. Importantly, this team was instrumental in developing and owning our strategic plan presented in November 2024. You will hear directly from Barb, Will and Jayde today.

Beyond the executive committee, we have continued to strengthen leadership across the organization. Across Temenos, the focus is consistent disciplined execution, long-term value creation and maintaining the trust of our clients, our partners, our people and our shareholders. That underpins everything you will hear today.

Turning to our market opportunity. Our market remained resilient, very resilient in the past year, driven by nondiscretionary banking IT spending. It grew 7% last year to around $25 billion, and we significantly outgrew with 12% product revenue growth. We expect the market to continue to grow at roughly 7% per annum to $30 billion by 2028. Tier 1 and 2 banks account for close to 1/3 of the market and tend to prefer composable core and best-of-breed adjacent solutions. Tier 3 to Tier 5 banks represent the majority of banks globally and account for 2/3 of the market in dollar terms. These banks typically have smaller in-house teams and tend to buy front-to-back best-of-breed solutions.

Going forward, around 40% of the growth will come from adoption of third-party software. And the balance will be driven by growth in business volumes and shifting deployment model from on-premise to cloud and to SaaS where total contract values, as you know, are 2 to 2.5x higher. And our ambition is to continue to grow faster than the market as we have done in 2025.

In terms of deployment model, on-premise remains the most prevalent mode. However, public cloud and SaaS will increase in the mix as they are growing significantly faster with public cloud growing 15% per annum and SaaS growing 11% per annum. The shift to cloud is driven by scalability, efficiency and the speed of change and innovation it offers, along with increasingly mature regulatory guidance. Sales demand continues to remain stronger in Tier 3 to Tier 5 banks, and they see it as a viable route to the cloud and a way to lower time to market and TCO.

The structural drivers supporting the demand for third-party software remains strong. We shared these trends at the last Capital Markets Day. So let's now take a look at how they have evolved. First, Cost optimization remains a priority as banks look to protect profitability and to fund innovation. We continue to modernize legacy solutions and simplify the application landscape to lower TCO. And they are also digitizing more products, even the more complex ones like lending to reduce the cost to serve.

Second, digital customer experience remains a key differentiator. Our top priority is improving onboarding conversion as the fight for deposits intensifies. There is a strong focus on payments innovation due to the continued threat from nonincumbents and as instant payments increasingly become standard for customers.

Third, security and regulatory compliance. With rising cyber threats and fraud sophistication, we're seeing elevated investments towards mitigating these risks and especially the use of AI in financial compliance. At the same time, regulatory changes continue to drive demand for out-of-the-box compliance that stays up to date.

And finally, there is greater expectation to leverage newer technologies to drive business value. There is increasing interest to deploy AI across domains to better serve customers, improve efficiency and lift productivity and to better manage risk. However, and very important to note, AI adoption thresholds in banking remain very high. We see more mission-critical workloads move to the public cloud and sustained appetite, particularly from large banks for composable core solutions that enable incremental transformation.

Now moving to our strategy. We made strong progress in the first 12 months of our strategy across product, GTM and the U.S. And this is already translating into tangible results. We have made significant targeted investment, partly self-funded by our cost savings in product, we transitioned to an agile team structure and strengthened the organization by bringing in new senior talent. As a result, in 2025, we delivered on our platform and product road map and launch differentiated new products, some of which are AI-enabled. We also sharpened our focus on the core and simplify our portfolio, including the sale of multifonds.

Turning to GTM. We increased quota carrier head count by 60% to over 140 individuals and invested in our sales operations and sales enablement. This has driven pipeline expansion globally, significant levels of signings with new logos and continued momentum with existing customers. You will hear more about this from Will later. Finally, we placed a strong emphasis on our U.S. expansion with a successful opening of the Orlando Innovation Hub. We hired more than 70 developers focused on U.S. product and increased U.S. sales count to over 20 individuals. These investments are strengthening our core innovation with the U.S. clients and driving our U.S. pipeline growth. As a result, we outgrew the market in the first year of our plan, in line with our ambition to do so every single year.

At the outset of our plan, we identified 21 strategic growth areas across the 3 growth levers. These have not changed. Some of the key revenue growth areas include Tier 3 and lower end Tier 2 U.S. regional banks, Tier 3 banks in Western Europe, retail core banking for Tier 1 and Tier 2 banks in Western Europe and the U.S., wealth in Europe, EMEA, core banking and some more.

In the last 12 months, we have made significant R&D and GTM investments across these opportunities, which has increased our ability to win. As a result, we are showing strong ARR pipeline growth across the vast majority of our growth areas. Our right to win at Temenos is validated by both the industry and by the tangible outcomes we deliver for our clients.

We can demonstrate the significant value our customers can generate by using our platform which Will is going to talk about in detail later. Over the past year, our strategic investments in GTM and product localization have further expanded our unmatched functionality allowing us to serve clients of every size in over 150 countries. This [ press ] is reflected in the delivery and diversity and scale of our key deal wins in 2025, spanning our geographies and tiers.

Our market-leading cloud and sales capabilities continue to set the benchmark underpinning a 75% plus win rate against our top 3 competitors and securing our #1 position in the IBS sales league table across 13 categories. Together, these achievements reinforce that Temenos is best positioned to empower banks to outperform.

Our industry-leading capabilities, global reach and strong investments in growth demonstrate why we are confident in our right to win today and as the market continues to evolve. The strength of our platform and products is shown by the deals we signed with top-tier banks globally. These banks are highly complex, spanning multiple geographies and business lines and [ a very ] demanding clients and we have consistently proven we can win and expand in those clients. Some of those notable deals from 2025 include a U.S. Tier 1 bank for composable core in multiple international markets and a Japanese Tier 1 bank for core banking and payments in new geographies.

As a result of our strong execution in the first 12 months of the plan, we are also raising our 2028 targets. I look forward to sharing more detail on the drivers and underlying assumptions behind the upgrade in the financial section. But first, let me share some progress made on the building blocks of our strategy in the last 12 months.

Starting with Lever A, extending market leadership in best of suite. We secured a significant number of new client wins with a particularly robust pipeline in the U.S. and Western Europe, capturing market share in highly competitive environments. We established a strategic beachhead in Brazil, closing a deal with a major public bank covering core, digital and payments. This marks our entry into a new and exciting market with strong growth opportunities.

Our high win rates against top front-to-back competitors continue to improve year-over-year, reflecting the strength and relevance of our platform. We also expanded our sales team and deepened our U.S. coverage. Many of our hires are bringing decades of highly relevant and domain-specific experience in the U.S.

Lastly, we made ongoing improvements to our sales platform, which Barb will share more detail in her section.

So what does success look like in 2026 for Lever A? Growing our market share in the U.S. as well as establishing and succeeding in new and fast-growing markets like Brazil; executing our product road map for the U.S. corporate and wealth segments; and advancing our embedded AI capabilities; finally, we will continue to invest in our SaaS operations with a particular emphasis on reducing TCO for our SaaS clients, reinforcing our commitment to delivering long-term value.

Now looking at Lever B, enhancing composable core solutions. In 2025, and I'm particularly proud of this, we made significant headway in composable architecture translating innovation into early commercial wins. We signed core banking deals with 14 Tier 1 and Tier 2 banks in Western Europe. This traction demonstrates growing demand for our composable architecture. [ Here too ], our win rates against key neo vendors continue to increase year-over-year, underscoring the competitiveness of our composable offering. We made good progress on our road map, strengthening our right to win. And we established a dedicated Tier 1 and Tier 2 sales coverage model with strategic sales teams across regions, focusing on the world's largest banks. Success in 2026 will be measured by the launch of additional composable solutions across both retail and corporate banking in the first half of 2026. We are also focused on the full launch of our thin ledger solution which represents a key milestone in our composable journey. Finally, [indiscernible] to build lighthouse references, demonstrating real-world impact and setting the benchmark for future deployments.

Thirdly, Lever C, accelerating adjacent point solutions. In 2025, we advanced our point solutions portfolio with the launch of our FCM AI agent and Temenos money movement, further differentiating our digital offering. We achieved double-digit year-on-year growth in the number of point solution deals, reflecting strong demand and our ability to address specific client needs. We established 10 codesign partnerships across different tiers, which drives collaboration with our clients. For example, our FCM AI agent was codesigned with a Tier 1 European bank, which is now rolling out this product. Those close long-term partnerships with our customers ensure that our solutions are tightly aligned to customer needs. Importantly, we delivered over 100 digital go-lives in 2025 demonstrating our capacity to execute that scale and rapidly deliver customer value.

Looking to 2026, our priorities for lever C include launching a new AI-powered digital solution in Q2 '26 to strengthen our innovation leadership, and we are focused on building our U.S. pipeline and converting it into revenue capitalizing on the strong momentum from 2025. Finally, we will continue to invest in implementation governance and AI to drive improvements in our delivery.

Next, I would like to share an update on our 4 business enablers that allow us to execute consistently at scale and underpin our ability to deliver above market growth.

Firstly, on product and technology investment. I already talked about the structural changes in our R&D department our self-funded investments in product and technology have accelerated our speed of innovation and ensure we remain at the forefront of banking technology as reflected in our high win rates. In 2026, our focus is on further enhancing our architecture and composable solutions with embedded AI as an additional differentiator. Then on GTM investment. Beyond increasing sales headcount, we have implemented a robust regional and account coverage model and invested in sales enablement to drive sales productivity. This has significantly strengthened our market presence and ability to capture new opportunities. In 2026, we will build on this foundation by investing in our partner sales strategy thus extending our sales impact in key growth geographies.

Customer experience. We have strengthened governance with our implementation partners and we are pleased to have seen the positive impact on go-lives. Our priority for 2026 is to enhance and optimize our SaaS operations, ensuring that our clients benefit from even greater reliability, scalability and value.

And finally, on the operating model. We made significant progress in our operating model in 2025. We developed a comprehensive corporate data strategy and rolled out our first internal AI agents, allowing us to make more data-driven decisions. And in 2026, we will focus on standardizing and automating processes, systems and data across the business and enable our employees with further rolling out of AI.

Together, the 4 business enablers are critical to driving our momentum and delivering on our 2028 targets. Importantly, I want to spend some time on the progress we have made with our U.S. expansion.

Firstly, on product and technology investment. In 2025, we opened our innovation hub in Orlando, designed for hands-on co-innovation with clients and partners. It's been a big success. We also delivered against our 2025 milestones for our U.S.-specific product road map, building on our localization efforts and unlocking the potential for future ARR growth. This was supported by our hiring of more than 70 product developers and senior product hires. In 2026, we will continue to extend our U.S. product capabilities with further hiring to support this.

Secondly, investment in GTM. Over the past year, we increased our U.S. sales head count to more than 20 experienced hires, bringing in talent with deep local knowledge and relationships. This investment is already having a meaningful impact on our pipeline and key account visibility. Our priority for 2026 is to accelerate converting our U.S. pipeline with more deals expected to sign this year. And we will invest in our GTM partnerships.

Last but not least, customer experience. In 2025, we strengthened both our onshore and nearshore support for U.S. clients, ensuring they have access to timely, high-quality service and expertise. Client satisfaction has increased as a result. In 2026, we will build out our U.S. strategic partner capacity. So we can continue delivering for our U.S. clients working in collaboration with some of the leading technology companies in the U.S. and globally. Together, these actions position us to deliver on our U.S. growth ambitions and established Temenos as a partner of choice in this critical market.

Culture remains a fundamental focus for us. It is essential for the success of our strategy. In the last 12 months, we have worked to significantly increase accountability, alignment and collaboration, empowerment and transparency and together drive performance higher. We have also strengthened leadership in the broader organization, elevating existing staff to expanded roles and our values are embedded in how we operate every day. The initial results speak for themselves. Our Chief People Officer, Jayde, will share more granularity on what we are doing in the company.

Alongside our focus on culture, operating responsibly is fundamental for us. We are proud to be recognized for our leadership in ESG, achieving the top CSA score in the software industry and maintaining our MSCI AAA rating.

Now let me share our vision for Temenos in the AI area. Now it becomes interesting. AI is clearly reshaping technology markets. But banking is not a typical technology environment, and that distinction matters. Banks operate at the intersection of two of the highest threshold in technology: product complexity and customer risk aversion. This is not an environment where generic AI solution can simply be dropped in. The requirements are fundamentally different and that is where Temenos' mode is strongest. On the product side, banks demand trusted domain expertise that handle highly complex workflows, proprietary data and platforms that can be extensively audited. These obligations do not shrink with AI. As banks automate more, these obligations become more concentrated in critical systems. And from a customer risk perspective, our solutions are mission critical. Banks operate in one of the most highly regulated sectors and have zero tolerance for errors or hallucinations. Every decision must be deterministic. The cost of getting it wrong is existentially high. That's why we sit in the upper right quadrant of this matrix, where both product complexity and customer risk aversion are highest as is the threshold for AI adoption.

In summary, Temenos provides a regulated backbone for banks globally, embedding AI into our platform, allowing them to automate, scale and innovate without compromising on compliance, reliability and auditability. We are not only protected from AI innovation from peers, incumbents and customers. We are using it to our advantage. We are embedding AI throughout our core and delivery models. And in 2025, we received industry recognition for our level of AI differentiation in this area of noise.

Let me now turn to one of our most important competitive advantages in the AI era, client trust. Trust is something you earn year after year by consistently delivering value. For Temenos, that trust is built on 4 pillars. First, mission-critical technology. We operate at the heart of highly regulated banks. Our cloud-native modern architecture serves as an auditable system of record, proven at scale. Clients rely on Temenos for security resilience and systemic stability, qualities that are nonnegotiable in banking.

Second, depth of functionality. We are a true front-to-back platform with deep coverage across all banking verticals. Our configurability and flexibility are market-leading and we offer products that are built to meet specific regulatory context of specific countries and regions. Our composable architecture, offering a menu of products that can be added depending on their needs means that banks can adapt and grow with us.

Third, trusted domain expertise. We bring decades of regulatory and operational knowledge embedded directly in our products. We have been operating in the banking sector for more than 30 years, giving us deep understanding of banking needs and low-risk tolerance. We have a proven track record of delivering complex multiyear transformations giving us very strong footnote with existing customers. In addition, we provide industrial grade governance to our customers to provide transparency for boards and regulators. Our proprietary banking knowledge graph is now enabling differentiated AI.

And finally, an entrenched market position. Critically, we do not price on a [ proceed ] basis, which is insulating us from workflow automation. Our volume-based pricing model is linked to accounts and transactions, fully aligned with our customers' growth and success. In other words, as banks grow, including with AI, our platform processes more, not less. In addition, many of our client relationships span decades. Switching costs are therefore significant. Core migrations are among the toughest projects in banking.

Lastly, we have a track record across regions. Temenos sits at the point where AI must connect to real money and real regulation using a volume-based pricing model and bringing a banking knowledge graph that [ AI ] models desperately need. This combination gives us a significant right to win in the AI era. And let me explain why Temenos' software is fundamentally important for bank's AI adoption.

At the top of the banking tech stack, you have the experience and orchestration layer, the mobile and web interfaces, digital employees, [ bank AI ] platforms. This is where AI can rapidly involve and already does and enhance tools and interfaces.

In the middle, you have the banking intelligence and execution layer. This is where Temenos operates. This is the critical layer that powers the core of banking. This is where the [ deterministic ] auditable ledger sits, the single source of truth that banks, regulators and customers rely on. It's where compliance, security and risk controls are enforced and where every transaction is locked, explainable and governed. No matter how advanced AI becomes at the front end, it critically requires a robust, trusted and compliant core.

The third layer of the stack is infrastructure and generic AI, cloud compute, storage and general AI models. This layer is likely to become commoditized and it's were banks and vendors can swap providers with little differentiation.

In short, Temenos is not just resilient to AI disruption. We are indispensable to the safe, scalable adoption of AI in banking. Let me take you through our well-defined AI strategy and how we are capitalizing on our structural advantages.

Our AI strategy is built around 3 pillars: product, process and people. First, on product. We are embedding AI directly into our solutions to drive tangible value for our clients. This helps making banking operations more intuitive and efficient, lowering TCO, while reducing risk in implementation and upgrades, making them quicker and more painless for our customers.

Second, process. We are leveraging AI across our software development and GTM life cycle to accelerate innovation. As Barb will speak to, we are integrating AI into our software development life cycle. We are also building AI agents for our customers, including the Gen AI [ assistant ] within our core retail banking solution, empowering banks to design, launch, test, optimize financial products faster using Gen AI.

Third, people. We recognize that the benefits of AI are only realized when our people are empowered to use it. We have rolled out significant AI upskilling across the organization. Jayde will share more on people.

In summary, Temenos has the unique combination of customer trust, deep domain expertise and structural advantage to lead in the AI era. We are applying AI where it creates real value across our products, processes and our people. This is how we are turning AI from noise to sustained leadership in banking technology.

Let me close by being very clear about how we will measure our success in 2026. First, delivery of a product road map with embedded AI at the core. This is key to maintaining our leadership position and continuing to bring differentiated value to our clients.

Second, converting our U.S. pipeline into revenue. The U.S. remains a critical growth market and turning opportunity into results will be a clear measure of progress.

Third, accelerating pipeline growth across all regions. We want to ensure we consistently capture demand and continue to expand our footprint globally.

Fourth, increased AI enablement across functions. Embedding these capabilities deeper into our operations will empower our teams and drive innovation across the business.

And finally, we are targeting strong ARR growth and achieving our 2026 guidance, which reinforces our confidence in the business and our commitment to delivering for our clients, our people and our shareholders.

These are the measures that will define our success in 2026 and keep us on track to deliver profitable above-market growth.

With that, let me hand over to Barb to talk about product and technology.

Thank you, Takis. And before we get started, let me address the glasses in the room. I'm not wearing them because of how cool products and technology is, but it is. But unfortunately, I scratch my eyes, so I'm dealing with a little bit of light sensitivity, but what you're going to hear is pretty cool. So let's jump in.

It's great to be back with you guys today, my second CMD, and I'm excited to update you on all the progress we've made across our key milestones, how we're positioning Temenos and our customers for success in both 2026 and beyond.

So as you heard from Takis, at the last CMD, we shared our corporate strategy. And it's focused on 3 strategic growth levers. So over the past 18 months, we've organized our product and technology taxonomy against those levers. We define dedicated strategies, we defined road maps, and we transformed the execution motion. This ensures our strategy directly drives where we invest, how we build and how we go to market.

So first, our best of suite Lever A. This remains at our center. It's our foundation. It's spanning core banking, digital and enterprise services. On the left side, you have our composable core modules. This gives our Tier 1 and our Tier 2 customers flexibility and rapid deployment. And on the right side, you see our point solutions. This expands our offering of independently deployable solutions. The strength of this strategy is how it addresses our clients' modernization priorities. Lever A drives our largest and most strategic transformations. But lever B and C allow us to build credibility faster by enabling our clients to aggressively modernize either starting with their core or with point solutions. So together, this allows us to meet clients across multiple entry points and gives our sales team significantly more ways to win and compete.

So now let's take a look back. So I wanted to bring up the exact slide I showed you at the last CMD. I committed to executing on our strategies across all 3 strategic levers, and I'm proud to say we delivered.

On Lever A, we strengthened the suite across our segments, expanded our localization by launching more than 10 new licensable products, ranging from retail loyalty and savings tools to supply chain finance, and we delivered copilots embedded directly in our core. We did not just enhance the platform. We expanded monetizable capabilities.

And on Lever B, we delivered on our promise to make core banking truly composable. Both retail and corporate core banking now have composable solutions available, and we are delivering these in Tier 1 and Tier 2 banks across major markets, including the U.S. and Western Europe.

And lever C, we accelerated our point solutions and our digital capabilities. We launched solutions, including our FCM AI agent, our money movement and management directly targeting priority client use cases and operational pain points.

The strategy is working, but what's even more exciting to me is that the strategy is compounding. So let me give you an example. We recently secured a global Tier 1 win for our composable [ thin letter ]. Now this is a high-performance ledger that helps banks unify fragmented legacy systems onto a modern stack. We're delivering this through our design partner program, building together with our customer in '26. And this will allow us to bring it to GA in late '26 and early '27.

While this is a lever B deployment, the architectural improvements we're making flow directly back into Transact, strengthening the core for banks of all sizes. Another example, in 2025, we launched our money movement and management. This is a lever C solution. It integrates treasury, FCM, payments and core to solve high-priority client use cases. It eliminates redundant integrations and materially reduces the infrastructure footprint, overall lowering the TCO for our customers. So these adjacent capabilities do not sit outside of the suite. They fundamentally increase interoperability, they deepen our platform adoption, and they strengthen the overall Temenos platform.

So we didn't just deliver in 2025. We built a capability flywheel across our growth levers and so what matters now is this is no longer about road map delivery. This is repeatable execution. So over the past year, we have pushed the entire CPTO organization to focus relentlessly on measurable results. To accomplish this, we made two fundamental shifts. First, we aligned our teams to be mission driven through our Agile transformation. Second, we aligned what we build directly to our customers' priorities through the launch of our design partner program.

So starting on Page 34. Our Agile execution transformation organized the product and tech teams into Agile [ release trains ]. They're focused on delivering measurable client value. This structure also deepened our domain expertise within the teams, ensuring we have the right specialists embedded directly in the work they need to do. These teams now deliver quarterly and, in some cases, monthly, placing smaller increments of value into the hands of our clients sooner. It's been truly amazing to see how quickly the impact has been achieved when the teams are empowered to work this way. Adopting this model has led to 3 key improvements. We're innovating at a faster pace. We're reducing delivery risk and we're enhancing predictability both for our clients and our investors.

So moving to Page 35. The second major shift has been aligning what we build by bringing our clients directly into the innovation process. In May of 2025, we launched our design partner program. This is something I'm personally deeply passionate about. This is where ideas become deployable products, not concepts. Through this program, we run 90-day delivery sprints directly with our clients that produce production-ready solutions at the end of each cycle. We start with our customers and we understand the most important problems they're trying to solve by co-innovating with our clients, grounding development in real operational pain points, workshopping together and validating through immediate feedback we ensure what we build achieves product market fit and accelerates real world's adoption.

When your clients co-innovate, they become client zero immediately. There's a real pride for both us and the customer when we co-develop solutions together. In 2025, we already saw strong early results. More than 10 clients and partners participated. And together, we co-developed and launched 3 commercially deployable solutions: our copilot for core, FCM AI agent and our composable core modules.

So looking ahead to 2026, we have a full road map. We have a very active co-innovation pipeline. It's across our AI digital, our composable subledger, AI agents for wealth and expanding our copilot personas. the agile transformation gives us speed and discipline and the design partner program ensures that what we build reflects validated client demand. Together, they allow us to deliver measurable outcomes, not just outputs. This is how we turn innovation into predictable, repeatable success.

So now let's talk about our core. Our approach is already delivering measurable results. And over the past year, we delivered more than 125 successful go-lives and upgrades, setting a new record for Temenos. We run 600,000 test cases daily and we have also integrated many of our client test cases into our test suite. By doing this, we simplify the testing and integration for our clients and create a better experience for our customers. To give you a feel for the complexity of a core transformation, we currently have a customer that's undergoing their core transformation. It includes over 100 integration points surrounding the core. So beyond record client launches and new products, we're focusing on improving that end-to-end experience, making the life easier for our clients every day. And as a reminder, we have a single core. So every dollar we invest benefits all of our customers.

Now looking ahead to 2026, we will maintain delivery discipline while continuing to expand how our clients consume our core both by deepening our regional presence in markets such as the U.S. and targeting more focused use cases with our customers. In 2026, we will deliver corporate and commercial finance as a stand-alone offering, complementing both the best of suite and our composable components already giving our clients clear modernization paths. So this is how we convert core market leadership into sustained share growth and core stability is what protects our ARR.

So now let's turn to staff. We built strong operational momentum in 2025, improving our provisioning speed, automation and our customer experience. 95% of environments were provisioned in under 5 days. That was down from 15 days previously. And this is all enabled by our unified SaaS Foundation platform. We are now moving to best-in-class SaaS operations in 2026. Deployment automation increased fourfold, onboarding efficiency improved by 73% and accelerating go-lives. And we support all of this with now a 24/7 local and nearshore model. In 2026, we will extend SaaS across additional hyperscalers and complete the coverage across our full product suite including wealth, where it supports market expansion. SaaS is now operating at scale with measurable speed, efficiency and predictability. This is what turns SaaS from transition into a structural advantage.

So now let's move to Page 37. Our leadership extends beyond our core [ though ]. In wealth, we remain positioned as a leader, validated again by industry analysts in 2025, and we extended market share with go lives with two of the world's top 30 private banks. In payments, we validated production level scale above 7 million payments per hour while maintaining instant latency, performance sits trusted across institutions from central banks to neobanks. This operational scale directly supports things like our money movement and management, where we will continue to expand in '26. In wealth, we are also expanding into the mass affluent segment, continuing to support our Tier 1 and Tier 2 private banks as intergenerational wealth transfer continues to accelerate. We actually had a CTO from one of our Tier 1 clients reach out, and he was so excited about the wealth products that we've delivered together that he asked to come speak at our [ tech days ] next week to share with customers and partners the experience that he's had.

So now let's go ahead to our U.S. strategy. So in 2025, very excited and proud to say we delivered across every major pillar of our U.S. road map. We've advanced all 3 strategic levers. And as a result, our U.S. product suite is now strongly positioned to compete aggressively in 2026. And we are building on that momentum with the ambition for every major product to compete for market leadership by year-end. This progress was enabled by clear execution strategy as well as combining dedicated regional investment, a U.S.-based product and engineering organization and deep co-innovation with our clients. This is all built on a proven global delivery and engineering base.

We built this U.S. team across all seniority levels and opened our innovation hub, which now houses more than 70 developers. Many of the developers hire directly from the local universities. This hub serves as the center of our co-innovation with our clients and our partners. And it's applying that same scale engineering and delivery model that we had already proven across our major centers in Chennai and Bangalore. With these foundations in place, our portfolio is well positioned to compete strongly in the U.S. market in '26 and beyond.

So now let's turn to digital. So digital represents a little over 10% of our product suite, and it serves more than 600 customers. It remains a critical part of our best of suite and a key focus area within Lever C. Our digital platform is built on a proven foundation, including a unified API layer, core agnostic architecture and extensive localization. This allows us to support every type of bank from Tier 1 head list deployments to fully integrated Tier 3 solutions, covering the full life cycle from onboarding and servicing to originations and collections. This capability translated into more than 100 digital go-lives in 2025. But we are not building digital only for today. We are investing to move ahead of the market with multiple co-design partners across every region and across our banking tiers, helping shape what comes next. So at this year's [ CCF ], we will unveil our AI-powered digital solution, which connects directly into our broader AI strategy and is built with our customers.

So now Speaking of our AI strategy. Okay. This is an area I'm super excited about. So let me start with our product. So Temenos sits at the core banking intelligence and execution layer. This deterministic auditable foundation is not replaceable. There's no room for hallucinations and it's the layer that AI ultimately depends on. This is our moat. This is where Temenos has a fundamental competitive advantage, and this is where our single core matters. We have a significant installed base on which we have built trust and deep domain knowledge. And this is why our design partner program is so critical to AI adoption by our clients. Our strategy is to embed AI directly into this layer through conversational interfaces and AI agents, strengthening the platform rather than replacing it. Conversational interfaces are transforming how users interact with the Temenos systems by enabling natural language interaction with the platform. This improves productivity reduces operational friction and makes complex banking functionality accessible to a broader set of users. We've already begun this with our copilot for core where users engage directly with the system using natural language to accelerate their decision-making. AI agents increased operational capacity, reduced friction and help banks scale efficiently while maintaining auditability and human oversight. One example is our FCM AI agent. Where a large Tier 1 client -- we co-built that with them through our design partner, and they're processing hundreds of thousands of sanctioned screening cases, but they're automating more than 20% of their alerts, allowing their teams to focus on their higher complex work. In 2026, we will continue expanding our copilots, our agents and our embedded AI capabilities across the platform.

So turning to Slide 42. Banks across the industry continue to face persistent operational challenges, including manual setup, custom integrations, reactive monitoring, operational outages, skipped upgrades and all of those things slow innovation. Our focus is not just embedding AI into the products, but deploying agents across the full life cycle of install, run and upgrade.

So let me give you an example of how we're using ourselves as client zero. So within our SaaS operations, we've implemented tooling in our AI Ops, which is automating the triage of support tickets and instant management. along with root cause analysis and issue remediation. So we had one incident that would have previously taken roughly an hour to diagnose. This was done in 8 seconds by the agent. The root cause analysis also previously would have been hours and days. The agent discovered a misconfiguration and the agent also identified that by making the configuration change, it will save about $30,000 in hardware costs on an annual basis. This is the kind of operational step change AI enables. And in 2026, we will continue to apply this type of AI directly into our core operations to simplify installation, enable proactive management and reduced downtime during upgrades.

In digital, we are also enabling our customers to build and deploy experiences in days, built on the same explainable, auditable architecture. AI across core and digital fundamentally improves how our clients operate, upgrade and scale on our platform.

So now let's talk about the process pillar of the AI strategy. So AI is also transforming how we operate internally. We're embedding AI across the full software development life cycle to increase throughput, improve our quality and accelerate time to value from build and testing through deployment and ongoing support. Now in 2025, we started closest to our customer with the launch of [indiscernible], our AI-driven implementation and support assistant. And today, more than 1,500 clients and partners actively use the tool. In 2026, we're going to extend the AI across the software development life cycle using 3 complementary approaches. We're applying Gen AI coding to accelerate our development. We're deploying role-specific agents for requirements and test creation, and we're advancing towards spec-driven development. By embedding AI into our processes, we are not only improving efficiencies, we are redefining how software is built and delivered.

So with that, let me close by saying we set out and delivered what we intended to do in 2025, and we have clear priorities for 2026. We will measure success with the delivery of strategic road map across all of our core platforms, the expansion of full SaaS availability across the product suite, including wealth, SaaS, strengthening of our competitive position in the United States, the launch of differentiated digital capabilities and embedding AI across both product and development processes. We have clarity on our strategy. We have confidence in our platform. And so what matters now is disciplined execution delivered consistently at scale.

With that, I will turn it over to my partner, Will.

Thank you. Good afternoon. My name is Will Moroney. I'm the Chief Revenue Officer here at Temenos. And I look after the go-to-market teams. The customer-facing teams that range everywhere from fuel marketing to sales, customer success and local support. It's a real pleasure to be here and to share how we've continued to evolve our go-to-market strategy and deepen our focus on customer success.

Over the past year, I've worked closely with our sales partner and client teams to accelerate pipeline growth, sharpen our execution and deliver tangible value for our customers. So today, I'll walk you through what progress we've made, highlight some key wins and milestones and share how we're positioning Temenos and our customers for sustained success.

So over the past year, we've made strong progress on our go-to-market priorities to drive growth and scale. First, we expanded our sales capacity by more than 60%. And hiring new individual quota carriers across our growth territories, and we've implemented strict account segmentation to ensure laser focus and accountability.

On sales effectiveness, we've established best practices for pipeline qualification and deal management. We've revised sales compensation to drive linearity and ARR growth. And we've invested heavily in enablement at sales tooling and our new sales leadership academy. We've also redesigned our pricing and packaging, making it simpler and more transparent for both our sales teams and for our clients, which has led to reduced friction in the sales process and brought us in line with industry standards. Our partners are fundamentally important here at Temenos, allowing us to scale from both a go-to-market point of view and also from a delivery point of view.

On the partner side, we've launched a hybrid delivery model and enhanced partner engagement, certification and governance, treating our partners as a true extension of our consultancy pool. I'll share more detail on our partner strategy in the coming slides.

Now looking ahead to FY '26. Our main priority is converting this expanded pipeline and our sales capacity into revenue with a strong emphasis on execution and deal conversion. We will further invest in training, in enablement and AI-driven sales productivity while launching our new pricing and packaging to reduce friction and drive value with our clients. We are also deepening strategic partnerships and joint go-to-market initiatives to expand our reach, especially in those key growth markets.

Now turning to the U.S. So in FY '25, we did make significant U.S.-focused product investments, building out our retail, corporate and digital front-end road map to meet the local market needs. We expanded our U.S. sales capacity, increasing IQC head count to over 20 and brought in experienced professionals with deep knowledge of the competitive community. Our partner network in the U.S. has grown with new expertise recruited and our new Global Head of Partnerships, Edgardo Torres bringing extensive experience of building partner teams and networks in the U.S. specifically and also globally, enabling us to engage more effectively with these strategic partners. We've also invested in onshore and nearshore support and SaaS operations to enhance client life cycle experiences. As a result of these investments, we have seen strong growth in our U.S. ARR pipeline over the past year.

Now looking ahead to FY '26. Our focus is on converting strong U.S. pipeline into revenue, establishing strategic partnerships and joint go-to-market plans and expanding our U.S. hybrid partner delivery model and our implementation capacity in the U.S. Partners are fundamental to accelerating our growth because they enable us to deliver at scale. We have evolved our approach. Partner resources are now treated as true extensions of the Temenos team, held to the same quality, training and certification standards. In FY '25, we launched a hybrid implementation model to determine the right mix of Temenos and partner involvement for each project, factoring in bank size, transformation experience, deployment type and existing client relationships. We have introduced a tiering system for our partners based on experience, capacity and focused on enablement certification and robust governance, ensuring only certified partner resources work on our client projects. Our approach empowers clients to see the quality of every individual working on their projects. And we are also leveraging partner AI expertise to further derisk and accelerate our implementations.

Now looking to FY '26. We will ramp up partner implementation capacity in our key growth markets, launch AI use cases to lower the cost and the time and further increase investment in Temenos governance to ensure oversight and delivery excellence. In 2025, we built significant sales capacity, and our focus now is on converting that into productivity. We've embedded best-in-class processes, methodologies and tooling layered with AI to drive greater efficiency, actionable insights and predictability.

This journey will continue in 2026 as we further leverage AI to empower our sales teams. We recruit top industry talent, and we are committed to keeping our teams at the leading edge. We're investing heavily in enablement and in training partnering with the best-in-class providers to stretch our team's capabilities and build confidence at every level. This year, for example, we kicked off with C-level training for our entire sales and sales leadership team to ensure a really fast start to 2026. Temenos' biggest assets are our customer base, our platform and product and our sales distribution engine. Our rich product suite and composable solutions drive significant value for our customers and create ongoing upselling opportunities. And our sales force compensation is aligned with this, linking annual recurring revenue growth within our accounts and continuous value creation for our customers.

Value selling is at the heart of our approach. From the very first client engagement, we focus on demonstrating tangible value and building the business case for the transformation, helping clients realize efficiency gains, drive revenue, and most importantly, outperform their peers. This mindset is a key driver of our improved pipeline conversion.

Finally, partners are critical to scaling our reach. From joint engagements with Tier 1 banks to partner-led smaller segments. With a new head of partnerships in place, expanding and deepening our partner ecosystem will be a major priority for 2026.

Now turning to AI. So specifically, we've launched AI-powered sales tools that help our client-facing teams clearly articulate that value that Temenos brings to each and every client. These tools allow us to build value-based business cases tailored to individual clients, quantifying the benefits of our solutions. We can now support TCO discussions with hard numbers. And on average, we see that moving, for example, to our SaaS platform delivers a 30% reduction in total cost of ownership compared to an on-premise, factoring in infrastructure upgrades and personnel. We can now show clients a clear route to pay back with typical project benefits exceeding costs within a tangible time frame and the benefits end up being multiples of their investments. It's a collaborative process with clients and prospects, enabling us to engage more deeply and to act as a true partner in their digital transformation.

Having just finished a very large value benchmark exercise with a Tier 1 bank in the United States, we are more than confident than ever that the impact of our AI-enabled value selling makes a difference. The feedback from this Tier 1 U.S. bank has been that they have never seen this type of engagement from a core banking provider before, where the focus and the conversations were all about value creation metrics first with progressive modernization as a means to deliver upon this. We are only able to do this because of deep domain expertise, the strength of our platform and the trust our customers place in us. This is the moat that Takis was referring to earlier.

Now our commitment to delivering tangible value for customers is clear. In these recent client successes across multiple regions that we operate in. For example, one of the largest banks in Central and Eastern Europe consolidated more than 5 systems and cut product development time in half as part of their core modernization journey. In Western Europe, a major bank now has 550,000 active customers using its mobile banking app with 95% of transactions flowing through the digital channels. In Vietnam, a leading private commercial bank migrated more than 18 million accounts in just one single weekend. And they saw a 40% increase in payment transactions. We're also helping banks in Egypt, the Caribbean, achieve faster time to market, higher transaction volumes and rapid client base growth with full front-to-back transformation.

To wrap up, I'd like to highlight the key measures of success that will define 2026 for our go-to-market and our customer success teams. Firstly, our top priority is converting the strong U.S. pipeline we've built into revenue. The U.S. remains at the center of our strategy. and we now need to see our focused sales capacity and targeted account strategy translate into deals with our target banks. We will also accelerate pipeline growth across regions leveraging that expanded sales capacity, market segmentation and laser focus on executing our 3-year territory growth plans, driving incremental pipeline through the partner channel will be a major focus of 2026. With new senior hires and a refreshed delivery model, we have clear plans to increase partner-driven contribution starting as early as the second half of the year.

Increasing sales productivity through tools and AI is critical. We've invested significantly in sales training, enablement and AI-powered systems, and we're already seeing improved conversion rates. As we continue to leverage these investments, we expect productivity to keep rising. It's a really, really exciting time to be in sales in Temenos. And then delivering strong ARR growth. This is the ultimate goal and everything we are doing from sales execution to partner engagement is geared towards that.

And with that, I would like to hand back to Adam. Thank you.

Thanks very much. We are unbelievably slightly ahead of time. So we'll have a 20-minute coffee break. Be back at 35 past the hour. Thank you very much.

[Break]

Hi, everyone. Welcome back. Before we get going again, just to remind you, Q&A at the end. [Operator Instructions]

So I'd like to welcome to the stage, Jayde Tipper, our Chief People Officer.

Thank you, Adam. Good afternoon. Thank you for coming back. Hope you've had coffee and then sugar in equal measure. As Adam said, I'm Jayde, I'm the Chief People Officer. I've been with Temenos since 2015 and delighted to speak to you about our people and culture strategy. I'll start with what is at the heart of everything we do at Temenos, our people.

People are the key, but it's not a headline for us. It's a fundamental belief that enables long-term value creation. You've heard about our strategy about our products and about AI. And all these are underpinned by our people, having the right skills, being aligned and engaged. As we look to 2028 in our strategic plan, our people will clearly continue to be the driving force behind our client success. We are investing in building a culture of performance empowerment and accountability and responsibility to unlock the full value and potential of Temenos together.

Now to highlight the values that define who we are. These values, as Takis said earlier, are embedded in daily behaviors, leaders expectations and employee recognition. Our values are both clear and actionable. We challenge. We push the boundaries, ask the tough questions and never settle for the status quo. We commit. We take ownership that always deliver on our promises and hold ourselves accountable to the highest standards. We collaborate working as one team, leveraging diverse perspectives and strength across teams and systems with one Temenos. So we achieve more together. And we care. We support each other invest in well-being and aim always to make a positive impact on colleagues, clients, partners and communities. These values are reinforced to how we hire, promote, recognize and reward our people. And our programs are highly valued by our teams and reinforce a culture that truly sets Temenos apart.

To give one example is our [ keys ] program, pretty famous. They recognize loyalty and tenure. Milestones being at 10 years, 5 years, 10 years, some even 30 years now. I'm wearing my 10-year badge with pride. I've celebrated 10 years this year, along with 170 other employees and myself and our employees, they wear these like a badge of honor. I noticed that Barb is not wearing a key, she's wearing the Orlando innovation hub, specific [indiscernible], and you'll see the others wearing keys as well.

But importantly, our values are the foundation of our culture. And this is the very reason we continue to grow, innovate and succeed together. Strong employee engagement and advocacy validate our people-first approach and support focused execution of scale. In our most recent employee voice survey, representative feedback like this company motivates me to go above and beyond in my role, places in the top quartile globally of companies for engagement, which is 7 percentage points above our industry benchmark. High engagement and a focus on lasting relationships, building meaningful career journeys, ensure talent continuity and this is a really critical advantage in a knowledge-intensive business like ours, where trust, expertise and long delivery cycles really do matter.

Meanwhile, our Net Promoter Score for employee advocacy, this is the would you recommend Temenos as a place to work was up 6 percentage points in FY '25, a strong sign of the progress we've already made on [indiscernible] the first year of our strategy.

And lastly, we've received external recognition for our efforts and in Great Place to Work Awards in 25 of our countries, including the U.S., which as you've heard already, is a key growth driver for our '28 strategy.

Let me turn to leadership. Our people-first culture balances a nurturing environment with sustainable high performance. And as Takis highlighted earlier, over the past year, we've strengthened 4 core pillars that really shape how we work, accountability. This is about taking clear ownership and delivering measurable outcomes which includes things like, as Will said, value-based selling to customers with ARR-based incentives directly and indirectly. Empowerment, this is about pushing decisions close to the work, trusting teams to lead change and innovate. And we brought this to life through initiatives like Barb said, about reorganizing our R&D function into Agile release frames which really empowers teams with clear focus and absolute clarity, which is so important.

Alignment and collaboration are all about breaking down silos, working across teams and moving forward together with shared goals. And to do this, we set objectives at the Executive Board level and adopt these across the organization. So there's a very clear framework all the way through of responsibility. And transparency is central to how we communicate openly share information, build trust across Temenos and with our stakeholders. These cultural pillars are embedded in our daily ways of working and drive our performance culture, which continues to benchmark above global standards. It's how we improve decision-making, ownership outcomes, delivering lasting value for our clients and our people.

I'll move to AI. I'll speak about the AI strategy that Takis laid out and that both Will and Barb also expanded on. AI is a defining force in our industry and for our workforce. And at Temenos, we are very clear. We see AI as an enabler and not as a threat. We're implementing strong governance, [ riding ] high adoption and actively upskilling our people. In 2025, we took tangible steps to put directly in the hands of our people with a strong focus, as you would expect, and safe and responsible adoption. We launched our AI Champion network in every function, which drives peer-led learning and brings out real-life practical use cases across the organization. 99% of our employees have completed AI training, supporting strong governance and trusted adoption. One example would be in our legal teams, where they're using AI to review documents and drive efficiencies and day-to-day work and that came directly from the work done by our AI Champions network, which is great to see. We've rolled out tools, as we've said, like CoPilot, improving productivity and collaboration with CoPilot studio planned for the first half of this year as well.

So we're building on the foundation in '26. We'll redesign workflow and roles, [indiscernible] to remove friction and unlock new value. Our career framework allows for transparency, putting future skills development in the hands of employees so they can chart meaningful careers with us. And role-based skills pathways will support our continuous upskilling. Really importantly, we will equip our managers to leave confidently in an AI-enabled environment with a strong focus on trust, psychological safety and positioning AI as a tool for better decision making. Ultimately, these initiatives are designed to unlock AI as an enabler for Temenos while retaining what matters most: governance, accountability and human leadership because our technology only creates real value when it's trusted and adopted by our people.

So let's look to 2026 further. Our priorities are clear and closely aligned to our strategy. We will continue to strengthen our people first culture, making sure our values are consistently lived across the organization. We're investing further in employee experience, building an environment where talented people want to come to us, stay with us, grow with us and build long-term careers of us. Expanding our career development framework is a key focus, looking at workflows so our people can move faster, collaborate and create the most impact. And to accelerate all of this, Clearly, we will deepen our AI enablement across the organization, equipping our people with the tools they need. Overall, our people and culture at Temenos are not a support function, but a strategic enabler of execution and our resilience. Our strategy succeeds because it is powered by culture of accountability, empowerment, transparency and collaboration. And it is our people who turn that strategy into results.

Thank you. And I will now hand to Takis for financial framework and midterm targets.

Thanks to my team, Barb, Will, Jayde for your insightful presentations. Let's now take a look at the financial framework and the midterm targets for 2028. Building on the strategic context you've just heard and showing how our strategy translates into financial performance. I will share how our strong 2025 results enabled us to raise guidance for 2028, and we'll walk you through the building blocks behind our assumptions.

Let me briefly refresh on our financial framework. This remains unchanged. We will continue to deliver above market product revenue growth through our 3 established growth levers. Operational leverage remains a core strength. When we deliver top line growth, margins expand strongly, as demonstrated in 2025. Going forward, ARR will drive free cash flow growth and with improving cash conversion, free cash flow growth will outpace EBIT growth. The strong correlation between ARR and free cash flow is central to our model, supporting predictable and accelerating cash generation. And our disciplined approach to capital allocation ensures we continue to prioritize long-term value creation and sustainable shareholder returns. Our subscription model introduced in 2022 is now firmly established and continues to deliver strong results across all key metrics, driving the majority of our incremental ARR. In 2025, we saw ARR up 12%; EBIT up 21% and free cash flow up 15% year-over-year, a clear evidence that our strategy is working.

This transition has supported robust high-quality growth and underpins our confidence in our midterm financial targets for 2028. As a result of our strong execution in 2025, we have raised our 2028 targets across all key metrics. We now expect ARR to exceed $1.23 billion, EBIT to reach around $480 million and free cash flow to reach around $410 million by 2028. These upgraded targets reflect a strong first year of execution, confidence in our strategic positioning and good visibility.

Despite the macroeconomic uncertainty of the last 12 months, Market growth was resilient, and we expect it to continue at 7% to reach a serviceable addressable market of $30 billion by 2028. Importantly, Tier 3 to Tier 5 banks continue to represent 2/3 of the market opportunity, driving both core and adjacent solution growth. The main drivers of incremental market growth are the ongoing shift from in-house to third-party solutions and a change in deployment mix with on-premise still dominant, but with an accelerating movement towards public cloud and SaaS.

Our strategy and product road map are tightly aligned to capture this expanding market particularly as more banks look to modernize and outsource their technology stacks. As we have highlighted previously, Temenos has a significant and growing cloud business, with cloud revenue making up nearly 40% of ARR in 2025. Cloud ARR grew 15% in 2025, outpacing overall ARR growth and reflecting strong demand for our solutions on hyperscaler platforms. The market shift to public cloud and south is accelerating, and we expect cloud ARR to reach around 50% of total ARR by 2028. This momentum positions Temenos to grow its footprint in a rapidly expanding market with cloud becoming an increasingly important driver of our recurring revenue.

Moving on to the drivers of this growth. We now expect ARR to exceed $1.23 billion by 2028, underpinned by strong broad-based momentum across all regions and client segments. Growth will be driven by our 3 levers, extending our market leadership in best of suite; enhancing our composable co-solutions; and accelerating growth in adjacent point solutions. Lever A will contribute close to 50% of the ARR uplift by deepening our footprint with mid and lower tier banks globally and capturing opportunities across retail, corporate and wealth segments. Lever B is expected to add around 30% of the ARR uplift, building on the successful rollout of composable core modules and continued adoption by Tier 1 and Tier 2 banks globally. Lever C will deliver around 20% of the ARR uplift reflecting strong demand for digital and adjacent solutions from banks across all tiers. This balanced growth approach positions us to capture the expanding market opportunity and deliver sustainable, high-quality recurring revenue.

As shown on the left, we expect subscription and sales to drive around 60% of our ARR uplift by 2028. This growth is fundamentally changing our revenue mix. Subscription and sales are expected to increase from around 40% in 2025 to 45% to 50% of ARR by 2028. Overall, this transition enhances the quality, predictability and resilience of our revenues.

Turning to our product revenue. This is set to grow to over $1.18 billion by 2028. The largest driver of growth is subscription and SaaS, contributing around 60% of this growth. Maintenance will continue to grow. Our subscription contracts are recognized both as upfront license revenue and thus recurring maintenance stream. This more than offset the declining contribution from maintenance linked to term contracts. We expect ARR and product revenues to converge by the end of 2028. The conversion rate between ARR and product revenues is expected to improve from 91% in 2025 to approximately 105% by 2028, reflecting our continued shift to subscription and SaaS. After 2027, the impact of upfront revenue recognition for subscription licenses will no longer be visible, further enhancing the quality and consistency of our reported revenues.

Now let's focus on maintenance, where the strong growth in 2025 was largely driven by premium maintenance signings with some benefit from value uplift from subscription and renewals as well as small CPI benefit. Customers buying premium maintenance receive enhanced support with higher service levels, for example, with more responsive and dedicated support. While there is still some runway for premium maintenance signings in our client base, we expect less than in prior years. And so maintenance growth in 2026 is expected to be around 7% to 8% and by 2028, we expect maintenance growth to return to more normalized levels of around 6%.

Our business model is built on delivering operating leverage ensuring that as we grow, we continue to scale efficiently and maintain cost discipline. We plan incremental investments of $28 million to $35 million across all functions over the year in 2026, with a larger share allocated to R&D and sales and marketing to fully capture these opportunities. These investments are partially self-funded by approximately $10 million in cost efficiencies. We are making these investments from a position of financial and operational strength deliberately choosing to accelerate while many in the industry are unable to invest at the same scale or case. This is a pivotal moment to widen the gap to our competitors and extend our competitive advantage by investing decisively today. We are positioning Temenos to culture outsized opportunities as the market evolves and for us to set the industry standard for years to come.

Building on our disciplined investment and operating leverage, we expect to deliver strong EBIT growth and margin improvements through 2028. EBIT is forecast to grow to $480 million by 2028, with the EBIT margin expanding to around 36%. This uplift is primarily driven by robust product revenue growth, supported by further gains in services profitability. As mentioned, to support our growth ambitions, we're making targeted cumulative investments of $110 million to $135 million through 2028, with the majority of this focus on R&D while also managing ongoing wage inflation. These investments include extending our retail and corporate banking functionality, advancing our composable core and strengthening our U.S.-specific road map as well as investing in sales enablement, partner ecosystem and automation. Importantly, these investments are partially offset by around $10 million in annualized operational efficiencies as we continue to automate processes and embed AI across the business. However, we are not, at this point, including any efficiency gains from AI in our model. We have a structured investment plan for our platform and product road map to ensure we remain at the forefront of innovation. The significant majority of our investment is focused on enhancing our core banking platform with increased functionality across retail, corporate, wealth for all regions. We also have a strong focus on our U.S. product road map as well as embedding AI across our platform as Barb talked about. I would also flag composability as this will be key to our success in Tier 1 and Tier 2 banks. And lastly, we will continue to invest in our SaaS platform and our wealth-focused solutions.

Building on the strong EBIT growth and significant 300 basis point margin expansion in 2025 amplified by the full impact of our savings initiatives. We delivered a notable improvement in free cash flow conversion, increasing EBIT to free cash flow conversion to 69% despite the considerable cash headwinds from restructuring efforts. This demonstrates that our ability to convert profit into cash is not reliant on exceptional margin expansion but reflects the underlying strength of our recurring volume-based model.

Looking ahead, as the business continues to transition towards ARR and subscription, we expect free cash flow conversion to accelerate further, reaching approximately 85% by 2028. We anticipate generating around $410 million of free cash flow out of $400 million of EBIT, $480 million of EBIT. Underscoring the quality, predictability and cash-generative power of our model. We have increased our 2028 free cash flow target from $400 million to $410 million, reflecting our confidence in execution and the momentum already achieved. The largest contributors to our target are strong product revenue growth and some additional uplift from SaaS and maintenance deferred revenue. These gains are partially offset by planned OpEx growth as we continue to invest in R&D, GTM and scaling of the business, along with smaller impacts from CapEx and tax. Despite absorbing significant headwinds in 2025, including elevated restructuring charges and BNPL client-related downsell, we not only delivered on our [ progress ], but also have set the stage for accelerated free cash flow growth through 2028 with ARR growth as the primary driver. This continued shift towards recurring revenues underpins the quality and resilience of our financial model, supporting sustained improvements in cash generation and conversion going forward.

Through consistent execution and disciplined financial management, we have steadily reduced our leverage to 1.2x in 2025, well within our target range of 1.0x to 1.5x net debt to EBITDA. And we reconfirm our commitment to maintaining this target range going forward. We continue to maintain a disciplined capital structure to support our investment-grade credit ratings of BBB- from S&P and BBB from Fitch, both with a stable outlook, giving us flexibility and resilience in our long-term financial strategy. We are reaffirming the disciplined capital allocation policy we set out at our 2024 CMD.

With significant free cash flow expected to be generated between 2026 and 2028, more than $1 billion, we have the capacity to fund growth, deliver shareholder returns and retain financial flexibility. Our approach is built on 4 key priorities: organic investment, share buybacks, selective bolt-on acquisitions and progressive dividends. We continue to prioritize organic investment, especially in R&D to drive higher returns and long-term growth. Share buybacks remain an important lever to ensure capital efficiency and enhance shareholder returns. And we maintain flexibility for selective bolt-on acquisition that supports our strategic priorities and extend our market reach. We are committed to a progressive dividend policy, reflecting the stability and recurring nature of our business model.

Let me summarize our new targets and measures of success in 2026. To recap, our focused execution and momentum has given us the confidence to upgrade our 2028 targets to the following: ARR above $1.23 billion, EBIT around $480 million, free cash flow of approximately $410 million. These goals reflect the strength of our strategy and our ongoing commitment to profitable market outperformance and value creation.

Success in 2026 will be focused on our product road map, including embedding AI to continue to capture this opportunity, converting our growing U.S. pipeline, accelerating pipeline growth across regions, building on our GTM expansion in 2025, increasing employee enablement by leveraging AI across all functions and delivering strong ARR growth in our 2026 guidance. Thank you all for your time and engagement today. I'm excited about the progress we are making and look forward to keeping you updated as we deliver on these priorities in 2026. I have a high level of confidence together with my team to deliver on this.

And I will now hand over to Adam for our Q&A. Thank you.

[Operator Instructions] I'm going to just warn them all up with one each from me, just to [indiscernible] things going.

Takis, you just talked about the measures of success, the deliverables for FY '26. You also referenced your excitement about the prospects with Temenos. So I'd ask you in your seat now as CEO, what are you most excited about? Do you think it's going to be most impactful for us in 2026 and beyond?

I think, Adam, it's both excitement, but also a high level of confidence. It's really the structural demand drivers have no change. If anything, they have become even more prevalent. Now I have a strong team in place, and we have a strong culture in place. So this is a strong foundation for the focus areas for 2026. This is across product where we want to deliver our road map, specifically also for the U.S. It's on the go-to-market side, converting, as Will said, our pipeline which is [ where he's from ] into revenues. But overall, we also want to embed AI not just in our products, but across the organization. I think this is essential for the success. And finally, I'm also excited to drive our people-first culture to the next stage.

Great. So just following on the AI theme. Jayde, you talked about AI enablement for employees. Could you just dive in a little bit more detail on what's going to happen in 2026, what we should expect?

As you would imagine, there's a huge thirst for AI learning and enablement across all teams in the company, which is great to see evidenced by the fact that 99% of them took AI learning courses this year, which we're really pleased about. So '26 is really building on what we've done already in '25. Some really practical things would be, firstly, looking at roles and workflows, how we reduce friction, looking at skills and upskilling pathways for specific roles and functions. And I think really importantly, building programs to enable managers to lead their teams and people in this new AI world.

So Barb, you talked about your Agile [indiscernible] and co-development, can you talk about the impact of those and what we expect to gain from those in 2026?

Yes. Look, I've been doing this for a long time. And the -- when you typically undertake an Agile transformation, you have an expected time to start to see the value. What I will say -- and I know why this happened, we have accelerated our transformation far beyond my expectations. So we are well ahead of where I would have expected us to be. And when I take a step back and look at that, it's because of the deep domain expertise that we have within the teams. So now by focusing them within the trains, we're actually getting -- we're actually deepening that domain expertise because as an example, we would take the payments team and now they sit within multiple arts. Well, now they're training more people in the expertise that they had. And so I think we're going to continue to see just a level of depth that is going to be critical. We talked about the importance of that deep domain expertise. So I think we'll continue to see that grow.

On the design partner program and we have a full slate already lined up for '26, and we have more customers asking how do I be a part of this? And so what we want to do is make sure that we roll it out in a way that we can spend the time with customers and get to the right solutions. But I think we'll continue to see growth in that space for sure.

Great. And then finally, Will for you. You've also obviously invested very heavily in [ credit carrier ] head count in 2025. I think we talked quite a lot about the partner strategy for 2026. Can you give a bit more flavor on that across the different types of partners and what you'd expect to see in the coming year?

Yes. So I think if you look at any technology company over in their history, the real scale comes through partners, the real scale comes from not just the company themselves. So think of all the big names? It's their partners that have grown them to the massive sizes that they currently are. Our partners do fundamentally two things for us. Firstly, they're key to our delivery. So for every consultant we have in-house, there are 10 consultants out there in our partner network. And that's really, really critical. And we'll look to continue to grow that with high quality because in our growth markets where we're seeing the opportunity, we are going to need that capacity.

Then when we switch into the second thing to do for us, which is effectively either direct selling with us are many different parts of the sales process. So it may be this a consultative partner, think of the big 4, is sitting in front of the Chairperson of a bank talking about transformation, they -- the next thing they start talking about is vendors you should work with. Now one of the things that we've seen happen this year is, number one, we have gone out in the market and put a lot of effort into engaging with these sorts of partners to make sure that we are across all areas of where opportunities can come in from. However, one other thing we've seen, and it goes to what Takis was saying earlier is that the core seems to have become much more important at this juncture of what's going on across the technology stack of these banks. And so we're seeing a lot more partners come to us proactively because they can see that the core is a protected moat, and it's something they need to work with in order to be able to add value for their banking customers as well.

So partners, yes, really important becoming even more important, and that's why we need to spend even more time with them in 2026.

Great. We'll now open it up to questions. If you can just introduce yourself as well. Michael, would you like to go first?

Michael of Vontobel. I have two questions. One for Jayde and one for Takis. Temenos has been through quite a lot of changes, management changes in the last 3 years. And I was wondering how employee churn or turnover has actually evolved over the last 3 years, especially over the last 6 months. If you have any numbers on that?

Yes. We don't disclose absolute attrition numbers. We -- I can tell you that we've historically had very lower than industry turnover. So we're comfortable that we're within the industry benchmarks for most countries. What I will say there, Michael, is so we track very, very carefully attrition amongst our top talent and critical roles because we've heard so much about domain expertise. And we're low single digit on that. So we're quite comfortable with our ability to retain the talent where it really has the most impact.

Okay. And one for Takis. On the 2028 targets and the uplift or the change in the targets, I understand that they are organic, but still since they were first set, FX has made quite big moves and FX was a tailwind, I think, for you in 2025. So my question is how much of the uplift in targets is related to FX because you haven't mentioned anything on that in the presentation.

So there is -- It's correct that there was some impact from FX in 2025, but we always guide and also report both in reported in USD basically functional currency. So number one, there is still organic as a base. So no M&A included in those targets. And the uplift is not related to the FX impact especially not on ARR. It's really related to the mapping we have done across our clients. We have now 3-year plan or 3-year strategies, you see the corporate strategy, but there is a 3-year strategy for everything, sales, product, people, corporate function. There is a 3-year IT security risk strategy. So it's driven by visibility. It's driven by pipeline growth we have seen with new headcounts coming in. That's on the ARR side. And clearly, if you improve ARR, that has also an impact on free cash flow. And on EBIT, clearly, we have seen a strong start. So basically, some of that upside from '25 will let flow into the 2028 targets.

Fred Boulan, Bank of America. Maybe one question for Takis and one for Barb and Will. So firstly, on the -- I mean we'd be keen to hear you felt it in terms of cost moving parts next year. So we've had a very meaningful margin expansion in 2025. When I look at your presentation, you talk about enabling employees with AI, et cetera, but at the same time, you have a lot of investments, the Orlando tech hub, et cetera. So can you clarify a little bit what we should expect in the short term? I mean, you've given us '28 number But are you focusing primarily on the kind of market opportunity, investing, et cetera, and then operating leverage will follow. But [indiscernible] you stand on that? And then I've got a question for you, [indiscernible].

Yes, Fred. If you remember, we started the year with an outlook for flat to down margin. We ended up 310 basis points. Over 2 years, it's still more than 150 basis points. So that's actually more -- we used to say 100 to 150 basis points per year. So we're tracking quite well ahead. We also slightly increased the 2028 margin. For us, it's an opportunity, and I mentioned extending and expanding basically the competitive advantage. So this strong margin profile, we've seen as an opportunity to accelerate R&D investments because the demand is there. We see clients really flocking to us almost. So that's a big opportunity.

I think the basis for 2026 was a balanced approach. There is still quite some investment to be done. So let's say, flat to slightly up margin, I think, is reasonable at that time. Keep in mind, we always start the year on a conservative note, but I think this is the right mix to enable the investments. And also in 2025, we ultimately invested the cost base and [indiscernible] it was, yes. So we did execute on the investments. We did execute on savings. And as a company, if you're honest, and if you really want, you can always drive additional efficiencies and savings. So let's say, the $28 million to $35 million we invest largely in product. We also have still some $10 million or so efficiencies to be won.

And then second question on win rates versus competition. So very impressive metrics. Do you see some of your competitors starting to wake up to that react in terms of product, a good to market standpoint to try to regain momentum against you. So [indiscernible] go to market and product question.

Yes. I think I'll take the competitive side first. So it's an interesting landscape. I've been with Temenos 6 years now. I remember when I joined, the buzz was the neo vendors and this is where the fear was coming from and vendors like ourselves. We're actually not seeing those vendors in the competitive landscape at all anymore. I think there's been a massive shift away from them. [ So it's going ] to shift back to the more traditional vendors. And obviously, the landscape is different in different geographies. So internationally, we probably have 2 or 3 key vendors who, to be honest with you, I respect their technology platforms. We still believe we're far ahead. If we switch to the U.S., which is our growth market, you're still seeing the traditional vendors there. And the difference between those competitors and the ones we see internationally is that they haven't -- they just haven't had that opportunity to invest in the technology platforms and there's reasons for that because they're trying to maintain many platforms get that completely. I think that if we look globally, and that's why I want to kind of segment these into two, if we look globally, the competitive landscape [indiscernible], let's say, the two or three vendors that follow us on the IBS table. So when you see us at the top, there's a few vendors that are further down. They've always been targeting Temenos because they're always going to target the leader. In the U.S., we definitely got a head start in early '25 where the incumbent vendors were not really thinking about Temenos, but we're getting feedback now that definitely, there is a huge awakening that Temenos has entered the market. And we're seeing this within a number of the pursuits as well. There's a fight back happening there. The competition is competition. We've got to be able to go forward and win based on value. But yes, in summary, not much has changed globally definitely from a year ago, the American vendors, the U.S. vendors have woken up and seen that there's a threat now, and they're working to react to that trend.

It's Toby Ogg from JPMorgan. Well, just on the U.S. pipeline you've been building in 2025 and early '26. I know the plan is to start converting that into revenue through 2026. Could you give us a sense for what sort of conversion rates you've seen already on any of that incremental U.S. pipeline that you've been building. And how does that conversion look relative to sort of what you would typically see across the rest of the business?

And then just for Takis, just -- you mentioned that you aren't embedding any efficiency gains from AI in the model. Can you give us a sense for how big those gains could be? And where do you think within the organization the biggest efficiency gains could be? And would that show up in terms of incremental head count reduction?

Okay. I'll go first. So I think if you think about what we were -- our plan for the U.S. and our go-to-market strategy for the U.S. is there's 3 years now we've been at this -- or these 3, let's say, calendar years we've been at this. So late '24 was about getting the sales team in place. So there was huge activity in '24 to get quite a lot of salespeople in through the door, and our target was to get them all in by the -- I think the tenth of January, we had the [ main ] bus so they could go to the Temenos kickoff, which is really important for us. 2025 has been in the first part about setting the strategy in the first couple of quarters and then starting to build the pipeline. And that's gone, I think, really, really well. So we've been extremely happy with the pipeline that has been built and we've been extremely happy with the type of pipeline that has been built as well.

As we move now into 2026, we continue to generate that pipeline. We're quite focused, if you remember, there's a set number of Tier 1 and 2 and 3 banks that we are focused on in the U.S. So we proactively build and we actively build out of that set population of banks. Now in 2026, we're going to see conversion. So it's hard at this juncture to look at our global conversion metrics and ratios that we use and apply them to the U.S. We'll have a lot more data on that when we come out of 2026. So we use different metrics like the pipeline coverage and conversion ratio from going into the year in quarter, things like this. So it's a little bit too early, but definitely by the end of this year, we'll be able to assess how that compares to global.

So given from a financial perspective, how we have modeled this is assume lower conversion rates than in all other markets. We talk here about new logos. The first time even if you're selected, you need to go through procurement, the legal process. So again, being prudent given this is new to us and very central to the strategy.

On AI, our ambition is given we have been rolling this out now for a few quarters, actually to drive adoption. And as Jayde has said, people will only adopt if they feel safe, yes. If developers think, okay, if I'm going to use whatever tool, I'm going to make myself redundant, you don't get adoption. So our AI ambition and that has been clearly communicated internally is and if you look at the efficiency formula, it's actually doing more with the same resources. So it's not about head count cutting. It's increased throughput, be faster these things.

Now some years down the road, and you can always think about, okay, where is efficiency going to come first? I believe there is such a massive opportunity to accelerate the product road map and evolution. So if I can put more AI tooling into box organization and increase the delivery or accelerate the delivery by 6 months, he can sell a lot more. Yes, the cost saving is really not that relevant in that context. Across the rest of the organization, again, it's about adoption from marketing, finance, legal, HR across there. Again, we don't drive -- we want actually better processes higher throughput, and then we'll look at potential AI efficiency gains.

It's Mark [indiscernible] from Morgan Stanley. Thanks very much for the insightful presentation. Firstly, I just want to ask a question to you, Barb. Maybe going back to basics. My understanding is that the U.S. market is a pretty complex market in terms of product demand from customers. And you've talked about your ambition to be the #1 in that market. So can you talk to me about kind of the sale of the portfolio today, where you see the gaps where your key priorities in terms of R&D investment? And then maybe a second one for you, Takis, on the U.S. market and the investments ahead you've given a pretty clear breakdown in terms of how much the U.S. is in terms of R&D spend. But obviously, there's a lot of operating leverage in the business. So what makes you comfortable that that's the appropriate level to invest again? And why isn't that going more given the fact that the market is so large.

Okay. So if I look at our product offering and kind of back to the slide, we are competitive across our U.S. landscape. And part of that is driven by -- because we have such a vast range of clients across the entire globe, it was really about the localization efforts. Now the U.S. thinking, I know it very well, right? It is about that localization efforts, and that's where we spend a lot of the time. What we're looking to do now is differentiate ourselves and get to market leading across our products, and that's our goal for 2026 but confident that we'll be able to do it. When I look at -- so it's where we're at now, but also understanding the products that we're competing against, I feel very confident in our ability to go in.

On U.S. investment, keep in mind, we're talking here about people. So there is a lot of effort to hire the best people. If we talk about on the product side, on sales, we have already done it. I think on the sales front, it's the appropriate investment for our target market. We're not going below the top 160 banks. And if we see even more traction, Will is free to invest. He can easily get another 5 or 10 salespeople.

If you look at the product side, again, there is not really a restriction on hiring in Orlando, yes. It's getting the right quality. I think we have a strong team in place, and now it's about also productivity and getting the product out for the opportunity we see and for the road map we have for the next few years, it's the appropriate investment. So adding even more people faster will probably dilute the impact, yes. But there is -- from today's perspective, this is appropriate. If we see more opportunity, more traction, we can easily accelerate that. I mean there is a -- what's embedded in our '28 targets, it's $110 million to $135 million. we don't have a plan to spend all that money today. I mean, clearly, they'll raise a plan for 2026 and beyond. But clearly, there is enough opportunity, there is enough capacity available to invest.

Thank you very much and thanks for the presentation today. This is Justin Forsythe from UBS speaking. A couple of questions. I think I'll hit all 3 of you actually, Jayde, sorry, I'll leave you out. You've gotten plenty of questions already. So an AI question. First, for Takis, have I correctly understood the guidance framework and suggesting that you're assuming limited or embedding limited disruption from AI in the top line, ARR, et cetera, guidance. And Barb, just to follow on about the AI points. I totally appreciate the point around deterministic as a key driver of the value and regulation and there are a lot of things you went over on the side. if we maybe agree for a second that, okay, AI isn't the biggest risk. How do you think about distributed ledger technology because it would seem to me that, that provides a lot of interesting angles for modernization and less R&D dollars to build a core banking technology.

And then lastly, Will, I wanted to hit you on the U.S. It seems like, again, for the levers that it remains a key part of the growth algo. Can you just talk a little bit about what percentage of the pipeline is tied to the U.S.? And if I'm drawing lines and maybe I shouldn't do this on the ARR chart that you put up, I mean, it looks like not quite 100% growth in pipeline there, but somewhere in the region maybe of 75%? Or is that just simply not the scale?

Easy answer, not to scale, illustrative purposes.

Okay. Maybe you could then talk in directional nature about the actual increase in the pipeline?

Okay. So first on the '26, but also the '28 guidance, the element of AI disruption included, I think we always take a prudent approach not just for the current year, but even more for the multiyear for all sorts of risks, which are not quantifiable today. We currently, if you had -- if you were to ask me what's the biggest risk to this, whether it's '26 or '28, it's really more marco uncertainty, massive external shocks, not a recession or a normal GDP evolution of individual countries is really something like COVID or another [ GFC ]. These things probably would have a much higher impact than specifically on AI disruption risk. So prudent, as always, at the start of the year, so no specific AI disruption negative impact factor in.

[ Unified ledger ]. So as we spoke earlier, this really is about unlocking innovation for our customers. And so when I think about the problems that our customers are trying to solve, how we come forward to help them get there. There is a lot of legacy fragmentation in the back end for our customers that slows them down. Now I think where some of the question was going around the unlock of that. To me, when we help our customers unlock their ability to innovate when we help them be able to take advantage, it just drives more opportunity for us to do co-innovation around the problems that they're trying to solve. So very excited for the Tier 1 bank that we're doing the co-design on. and we'll continue to do that type of thing.

So on the U.S. pipeline, obviously, the AR segments I can't comment or break it out. The -- I'm going to try and help answer the question, knowing that I can't divulge the splits. The U.S. pipeline growth has obviously accelerated faster than any other region we have. And that's for two reasons. I think because, obviously, the baseline was a bit lower, but also when you inject that many sellers into a region, especially, we brought a lot of sellers in from -- that had experience in the competitive space. So they came with their rolodexes, they came with their relationships with banks in the U.S. because we were quite targeted, that has accelerated faster than any pipeline that I've seen actually ever. What I'm also going to try to help out a little bit with is the nature of that pipeline has been interesting as well, whereas in a lot of our key growth markets, we go in and we're building pipeline for a full core replacement, which is a fairly long sales cycle. I think last year, I mentioned sales cycles with us go sometimes 18 to 36 months. The interesting dynamic with the U.S. is that we've seen our pipeline have smaller components of that and it's a lot -- there's a lot more of the progressive modernization, i.e., composable requirement coming from the U.S. banks. And that's interesting because obviously, it should show to a shorter sales cycle also a shorter project and a release of value back to the bank faster. And that's been quite a learning for us, I think, in the 12 months that we probably didn't expect such a high percentage proportion of the pipeline to be composable requirements, i.e., there's quite a lot going on in corporate deposits right now. So it's like -- we'll work with the incumbent, but we'll bring in the new technology for corporate deposits.

Payments is another big area. Now that's interesting because for me, core banking is hard. But when you go in and you do a component, it's marginally easier to release value quicker. And then if you can do that well, you'll go into your land-and-expand type strategy. where you're in beside an older incumbent, you're proving your value and then you move over on to the next thing after that project. That's actually how we built our relationship out with commerce. We started in an area and then we went across other areas, regions, which is obviously a very important customer of ours is just retail deposits, 9 million of them. So this model we have experience with it in the U.S. That was quite interesting.

The final thing I'll say on the pipeline because I want to give you something not being able to do the breakdown is a very high percentage of the pipeline is actually SaaS. And this was another...

Charles Brennan here from Jefferies. Just a quick question on product and then one on sales as well. We've heard quite a lot about the innovation hub and co-innovation. What does that actually mean? Is that customer-specific development or are people happy just to add their requirements to do list of platform R&D.? And in the past, we've seen Temenos making some product commitments that you've perhaps struggled to deliver on. Why is it different now?

And then just on the sales side, it seems like you're relying more on partners. If I think across the rest of the sector, I've lost count of the number of times I've seen partner disappointment being used as an excuse for broad-based underperformance. Can you just give us a sense of what proportion of your budget you think will come from partners this year relative to last year?

Yes. So Charlie, what I would say is this design partner program is completely different than gathering requirements. So what we do is we go to the customers, we look at what are the problems that they're trying to solve not what are the requirements that you want us to do. And we take a holistic approach. It's actually really cool to see in the room. We'll have the customers, sometimes partners are joining us as well. So we'll use partners in the design partner program as well, bringing people from operations, from their engineering teams, from legal, from compliance, from risk, making sure that there's a holistic understanding.

But we also typically don't handle the design partner program with one client. So when you think about digital, I spoke to it earlier, we actually have a design partner in every single region and at different tiers of banks. So that when we create the product, we're actually creating a holistic product for the industry, not an individual product for the customers. So that is our -- always our gate is to make sure that we're creating a product that will solve industry problems, not a client-specific problem. If it's a client-specific problem, we will guide them back to -- if they want to leverage our tools to build something for themselves specifically, but we're looking at solving industry problems. And I think to touch on the earlier the question about before, that's a big reason why we launched this design partner program so that we're only announcing products when 1 of 3 things is true. And we said this last year as well, and we're sticking hard to it, either, a, it's in design partner actively, we're in the [ codesign ] sign with the customers. It's ready for GA or will be ready for GA within 6 months. If 1 of those 3 things is not true, we will not talk about a product publicly.

Just to link the sales side of that, Charlie, which is really important. We -- one of our most exciting products is the Temenos Payment Hub because when we bring that into a bank and we show the power of that, especially within corporate payments, it really does blow them away. Not a lot of people realize we actually codesigned that with a Tier 1 European bank in the Netherlands quite a few years ago. And we still look back on that and see that the power of the solution was because we sat for months and months in rooms with a Tier 1 bank on their vision and their dream of what a product should look like that would come from a vendor. So within -- we still see that and we still see that product very powerful in Temenos. So what Barb and her team are doing is they're formalizing that with a product, which is really, really exciting for us. And like the unified ledger is an example of that. That's not going to be client-specific. We're working with what we believe one of the leading banks in the world to co-design that so that when we do bring it into GA, that we're -- it's not something we've created ourselves, we've created with a bank.

On into the question on partners, I think maybe there's a bit of a misunderstanding here. We're definitely not in the box shifting partner channel game. That's not us like the American -- some of the very big American firms that are there that are more high volume. Our partners when it comes to sales, it's either sell to, through or with, okay? And I'll explain those very quickly. Selling with means that we are alongside a partner. Now that could be somebody who is a local partner in an emerging market country who understands the culture of the bank, has worked with the bank, maybe they put in the ATMs of the bank, the bank is comfortable with them. And we're selling alongside them. So that's what I mean when I say sell with a partner. Selling to a partner means that we're actually selling to a partner who's going to create and manage service and bring that into the market. And we are seeing -- so on the [ cell with ], there's no change there. We see that what we're trying to do there is we're trying to move up the line. And I mentioned the top 4 consulting firms. So we're engaging a lot more with them. So when they talk about the progressive modernization story with their banks, they come down and say, and Temenos is a partner of ours. I think you should talk to. That's sell with.

Sell to, we are seeing an increase in that. And it's probably like a 10% increase year-on-year, where there are more system integration partners who are coming to Temenos and saying, "Well, we'll take your platform and then we'll build things around it, and we'll sit things on top of it." and they're going to then to provide that to their customer as a managed service offering or maybe even as a BPO offering. So it's a full outsourcing model to their customer because they're service providers, they're very well-positioned to do this. If we take a market like Saudi Arabia, quite a bit of our sales in '25 were in this managed service model because there isn't a SaaS model available in SA but these partners have created that. So that, I think maybe 10% growth.

And then there's sell-through. So sell-through is where we actually have a value-added reseller model. It's a very small component of what we do. Again, I think flat to maybe 5% or 10% growth on that. The most important thing for me in energizing the partner network in 2026 is the influence of partners. The partner influence is key for us because banks, especially large banks, they work with tens and hundreds of software and service providers and with 5 to 10 different advisers and consultants. So it's critical for us as we engage with our partner network that there are positive words coming, that there are leads coming in, that there's this co-conversations happening about how we bring that value back to our banks. And then the final thing on partners is the conversations we're having with our partners now from a go-to-market perspective, we're all about how can we help you deliver value for your banks. We're confident if we can inject ourselves into that conversation, then we're going to get more pull in from our partners.

Josh Levin from Autonomous Research. Two questions. One, banks have historically been reluctant to overhaul their cores because of the operational risk associated with implementation. Does agentic AI change that? Does it make implementation easier and make banks more likely to overhaul the core? And then to flip the question, one of the reasons banks have sort of had an impetus to upgrade the core is because they're running out of COBOL programmers as they retire, but now you don't need COBOL programmers because you have agents to go ahead and reprogram. So our banks also thinking about perhaps extending the life of their legacy cores because of agentic AI.

I'll take the first part, I guess, and you can talk about the COBOL side of it. Yes. So -- this is the biggest conversation within Temenos right now because if you look at a lot of our history and where our business is built, the Tier 5, 4 and 3 banks, they are a lot more dynamic. They don't have that technical debt as much of it anyway, it's not as complex. You look at any Tier 1 bank globally right now, they've probably got an IT budget of between $10 billion and $15 billion, they're spending 80% of that just to keep lights on. There's not a lot of innovation happening in there. And as you say, contemplating a core replace or even contemplating a departmental replace is it brings risk and it brings cost, okay? So the biggest barrier to that and to the making that decision, which is underlying that risk and cost is understanding the legacy that they have, understanding of data structures understanding the business processes within it because just the simple requirements gathering to figure out what they've got and how they take these 6 core -- all core systems stacked on top of each other, migrate them into Temenos, the biggest effort there is actually understanding what they have for a Tier 1 bank. So it is early days. But in our delivery teams and with our partners, what we are hoping for is that artificial intelligence will help this piece.

Now how much it helps how quickly it helps is the $5 billion question, I guess, right? But definitely, we've seen early green shoots of this making big changes. Now that's done a second thing, That is that we now can see a little bit more proactive engagement from the Tier 1 banks with us because they can see that maybe there's something there now they can start to move them off this 30- or 40-year-old set of solutions. So from our point of view, from the go-to-market and from the delivery point of view, yes, we're super excited. But we're conscious that there is a journey here, and we're just not sure how quick and how complex that journey is going to be.

I think on the COBOL side, I'll hand it over to the experts.

So look, when we talk about run install upgrade, we have -- we consider ourselves client zero with our SaaS. And so we are going to continue to leverage AI to improve the upgrade processes, the install, run, operate. And I think that there's real opportunities in that space, right? And so -- but when I think about COBOL and I just have to smile because COBOL has been dying since before I graduated. And the thing that I think -- Takis has talked about it some and his, I touched on it as well. You have to have that domain expertise, AI has to have context in order for it to be able to do anything. And so when you think about why we feel so confident in our position and why we actually see AI as an advantage for us. It is that deep expertise. It's being able to explain down to every single decision that you make. What the AI has done. And so because we have that 30 years of depth and expertise, that's why we feel very comfortable and strong in our position that AI is actually an advantage for us.

I'm going to take one question actually online from the webcast. I think Will is probably more [indiscernible]. So in terms of the U.S. banking market and the recent increase in bank M&A, does that increase the possibility to gain share or delay it? And are U.S. banks truly looking to replace existing legacy [indiscernible] with Temenos. And if so, what are the primary drivers for that?

Yes. So I think the M&A question first. So we are seeing an uptick in M&A activity in the U.S. And we've also seen deregulation as well, obviously, which is driving another direction in banking in the U.S. I think that it depends on the bank. So if we look at where we've seen deep M&A activity outside of the U.S. because you look at some core markets where we work in, it's not like the first time we've seen M&A. Normally, what happens in M&A is that the first step is to consolidate on to a core, right? So we haven't really ever seen that a bank is going to put two banks together and go to a new core in the same project. Merging banks together is quite complex without doing that. But quite often, what happens is the bank then is looking for what's the next step in our strategy. They're bringing themselves together, obviously, to create a higher top line, but to drive real efficiencies across the bank. Quite often, what we see in other markets is when the consultants come in and start talking about merging of systems, then the real system inadequacies come up and we have seen actually in some banks where they've not been able to get the system to really scale when they brought in the other bank. So what we would do when we see M&A activity going on is we will see how it plays out and we'll start engaging with the new [indiscernible] to make sure that they're aware that we're there and there's options to come in on Stage 2, but it normally is a stage 2.

I think on the second question, rip and replace, I wouldn't think that any bank wants to rip and replace. It's definitely not the words that we would use. I think that we replaced those words with progressive modernization. And this has really been the theme now for the past 12 to 18 months. We have been at the heart of some huge migrations, bringing 20 million accounts into our system on one weekend and then going live big bang across the entire universal bank is really hard. And the lead up to it is really hard. I think we're probably going to see a higher volume of modernizations because this has to happen. This is -- there's no way this cannot change. You can't keep running these systems but it's going to be in a progressive way, so it's going to have to be in a piecemeal basis. And I think that what we've seen now in the last 12 months with our prospect banks is that the idea that we can come in, in a more composable way and bring them on, believe it or not, a 10-year journey as opposed to a 3-year project. This is very attractive to these large banks to go on that modernization journey. So rip and replace, no, progressive modernization, yes, that's what we're seeing in the market.

Right. I'm going to take one very last question. Thomas, do you have one?

Thomas Poutrieux at BNP Paribas. I was wondering about your appetite to grow maybe [ further market ] and after the community bank space in the U.S. in the context of one of the big U.S. incumbents trying to make their Community Bank moved to a new, more modern platform in next year, which I guess could open up opportunities for Temenos. And then secondly, on the margin targets by 2028. What's embedded in terms of SaaS gross margin expansion, especially in the context, as I think Barb mentioned, extending partnership with new hyperscalers.

So let me take the sales margin question first. So if we -- if you look at the impact from this BNPL customer, which has exited and take that away, then clearly, the SaaS margin will expand but it's not resting on this because clearly, we want to enable our SaaS platform to be massively scalable for all the volume, these deals are going to bring on. So we need to invest now ahead. So the margin expansion basically '25 or '26 to '28, we're embedded in this 36% EBIT margin is quite limited. So if we get the volume up quicker, then clearly, you would see improvement potential there.

So the question on the community bank that's going to market. This, I think, is exactly where we probably weren't as eloquent in the market before in the U.S. We were quite reactionary and we jumped on whatever RFP came through the door. So we have a mantra inside right now, which is [ 160 ]. That's it. We know our banks were targeting. We have as -- we have an end salesperson or account manager responsible for each bank. They have to deliver us a 3-year plan for that bank, a 3-year territory plan, which is on the back of going into the bank and talking about how they bring value to the bank over a 3-year period. So no, we wouldn't go off piece and then look at a community bank. Now that's not to say that in the future that, that market we would relook at. But I think in the United States, one of the key parts of our strategy is that if we can bring on board a number of these new logos in 2026 and then we can accelerate through the projects, the key part of that first piece of the strategy is building trust, and that's really important. So we're very lucky in that we have two marquee customers now in the United States who have consistently delivered amazing reference calls and reference visits for the new customers who are trying to bring on board. We -- our first step is we have to expand and have 10 of those voices. We have 10 of those voices, then I would expect that a U.S. partner will probably come out to us and say, "Can we take your platform for the community banks?" but you've got to build that big trust first. And we're a lot of the way there, but we just need another year or two to build out and have more customers there.

Brilliant. Well, I think we're going to wrap there. Thank you so much for joining us today, both in the room and everyone join us by the webcast, and we look forward to updating you at our Q1 results. Thank you.

Ladies and gentlemen, welcome to the Temenos Q4 2025 Results Conference Call and Live Webcast. I am Moradi, Chorus Call operator. [Operator Instructions] The conference has been recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Adam Snyder, Director of Corporate Affairs. Please go ahead, sir.

Thank you very much. Thanks for joining us for our Q4 and full year '25 results call.

Before I hand over to Takis, I'd just like to flag that we're hosting our Capital Markets Day tomorrow in London and virtually. You can still register on our website to attend if you've not done so already. I will be taking questions as usual at the end of this call related to the fourth quarter and fiscal year 2025 as well as our outlook for 2026. I'd ask if you could please kindly keep your questions related to strategy for the CMD tomorrow, where we'll also be talking much more extensively about our approach to AI.

With that, I'll hand over to Takis.

Thank you, Adam. Good afternoon, good evening. I will talk you through our key performance and operational highlights for the quarter before updating you on our operational and financial performance. As Adam mentioned, we will go into more depth on our strategic execution and road map tomorrow at our Capital Markets Day, also covering AI, where we feel very well positioned with a strong moat for Temenos giving us a structural competitive advantage.

Starting on Slide 6. We achieved all our 2025 guidance metrics and delivered product revenue, constant currency growth of 11% in the first year of our strategic plan, which is above the market growth of 7%. The sales environment remained stable throughout the quarter and we saw strong demand across regions and client tiers, including several wins with Tier 1 banks globally. We also continue to see strong signings for premium maintenance and this drove very strong maintenance growth in the quarter and full year.

We invested across the business in both sales and product, in line with our strategic road map, in particular, growing our sales quarter carrier headcount by 60% to over 140 by year-end. And we executed well on our AI strategy across product, process and people that we will be talking more about tomorrow. We announced our 2026 guidance, which is based on the stable sales environment, our strong pipeline and are confident in maintaining business momentum through our focus on execution. And given the strong first year of execution on our strategic road map, we have raised our 2028 targets, reflecting the confidence in our strategic positioning and our good levels of visibility.

Moving to Slide 7. We signed a number of deals with Tier 1 clients in the quarter. This is a client segment we are particularly focused on, given their size and scale, the diversity of business lines and their global reach. We have invested in dedicated global strategic sales, focus on Tier 1 and 2 banks, and it was encouraging to see us expanding our footprint in the fourth quarter.

I would highlight 2 deals in particular. We signed a Tier 1 U.S. bank for composable core banking across multiple international markets and the Japanese Tier 1 bank expanding their Temenos platform for core banking and payments to 3 new countries. These successes demonstrate the strength and scalability of our platform and the value and trust our clients place in Temenos and our deep domain expertise.

Turning to Slide 8. It is important for us to demonstrate the value we bring to our customers. A highlight this quarter is VPBank in Vietnam, serving over 30 million customers. They completed one of the largest and most complex core banking upgrades in the region moving to a hybrid architecture with Temenos Core and AWS for scalability. VPBank has been a Temenos core customer since 2006. Our platform scalability, functionality and local knowledge are key differentiators. The core banking platform now handles double the daily volume with 0 incidents, business processing speeds are 30% faster and payment transaction volumes are up 40%. This shows the value of our platform and trust our customers place in us and our extensive domain expertise.

On Slide 9, our product and technology road map continues to be validated as market-leading by industry analysts. We were particularly pleased to be named a leader by IDC MarketScape for North American retail digital banking solutions. Given our focus on delivering our U.S. road map, which is a key part of our U.S. growth ambition. We also won best core banking system of the 2025 Banking Tech Awards, and we were recognized for customer experience in Asset and Wealth management.

Moving to Slide 10. We executed well against our strategic road map, which translated into tangible results across the business and a strong financial performance in 2025. We reorganized our product and tech function into agile teams and hire senior talent, which strengthened our ability to deliver our road map. We launched multiple new products on our platform in the year, including a number of AI solutions.

Our sales organization grew significantly with individual quota carrier headcount increasing around 60% to over 140 individuals across all regions. We invested in sales operations and enablement, which resulted in strong pipeline growth and strong signings, especially with new logos. Looking at the U.S. specifically, we also made good progress on our U.S. expansion strategy, increasing sales headcount to over 20 individuals and opening our U.S. innovation hub hiring 70 developers to roll out our U.S. product road map. Our U.S. pipeline has grown nicely, and we expect to close more deals in 2026.

Turning to the next slide. We will be talking about our approach to AI, our competitive positioning and our AI strategy extensively tomorrow at our CMD. To summarize, we have a clearly defined AI strategy across product, process and people. This is focused on lowering total cost of ownership for our customers, speeding up delivery and empowering our people to leverage AI and enable greater productivity. As an example, we are also rolling out Anthropic tools across our entire software development life cycle.

The adoption threshold for AI in the banking sector is very high due to high product complexity and significant risk aversion. This, combined with our deep customer trust and domain knowledge, creates a strong competitive moat for Temenos and gives us the right to win in the AI era.

I will now run through our Q4 and 2025 financial highlights. Focusing on constant currency and non-IFRS financials, which are pro forma, excluding any contribution from Multifonds.

On Slide 13, we delivered strong ARR growth of 12% with ARR now representing over 90% of product revenue. The growth in ARR was driven by growth in all our recurring revenue lines, both subscription and SaaS as well as maintenance. Our ARR growth gives excellent visibility on recurring revenue and future cash flows, supporting our long-term growth targets. Our product revenue, which is subscription and SaaS and maintenance grew 11%, well above the market growth rate of 7% in the first year of our strategic plan.

On the next slide, we exceeded our 2025 subscription and SaaS revenue growth target with 9% growth year-on-year. We also delivered strong total revenue growth of 9% in the quarter and 10% for the full year. Growth was broad-based, reflecting robust demand across geographies and client tiers for our platform and products.

On the next slide, non-IFRS EBIT grew 21% for the year and non-IFRS EPS grew 25%. While we made significant investments in our business product, [ GTM ] and operations, this was largely self-funded through our cost efficiency program. We have good operational leverage in our business. And saw the strong revenue growth, in particular, premium maintenance drove our profitability.

Let me highlight a few items on Slide 16. We delivered strong ARR growth of 12% year-on-year in Q4 '25 with ARR now at $860 million. Cloud ARR was 39% of total ARR, excluding any contribution from Multifonds or the BNPL client, which terminated a contract in 2025. We expect cloud ARR to increase in the mix going forward as more clients move workloads to cloud environments.

Maintenance revenue grew 15% in Q4 '25 and 12% for the full year, driven by premium maintenance signings. On profitability, EBIT margin improved by 3 percentage points to 34.7% for the year, reflecting strong operating leverage and savings from cost efficiency. These results demonstrate the strength of our business model and our ability to simultaneously drive growth while investing in the future.

Turning to nonoperating items on Slide 17. Net profit was up 9% in Q4 '25 and 21% for the year. EPS grew 14% in Q4 and 25% for the full year, benefiting from both profit growth and the lower share count. We had an increase across net finance charges, tax and FX losses in Q4, offset by our strong operating performance. The tax rate for the year was 17%, in line with our guidance.

On Slide 18, free cash flow grew 15% year-on-year, ahead of our guidance, reaching $256 million. This was supported by strong ARR growth, disciplined capital allocation and our continued focus on operating efficiency.

On Slide 19, we have our changes in group liquidity in the quarter. We generated $179 million of operating cash in the quarter and bought back $30 million worth of shares in the buyback launched in December. We also repaid a bond which matured in November 2025. We ended the year with leverage at 1.3x comfortably within our target range of 1.0 to 1.5x.

Turning to Slide 20, a few comments on our debt leverage and capital allocation. We launched our second share buyback program in 2025 for a total of CHF 100 million in December 2025. This will run until December 2026 at the latest. Reported net debt stood at $605 million at year-end. Finally, the Board is proposing a dividend of CHF 1.40 for 2025, which will be voted on at the AGM in May. Our approach remains disciplined and balanced, returning capital to shareholders while maintaining flexibility for future investment.

Next, we have our 2026 guidance, which is non-IFRS and in constant currencies, except EPS and free cash flow, which are reported. For 2026, we are guiding to circa 12% ARR growth, about 9% growth in subscription and SaaS, about 9% EBIT growth, about 7% EPS growth and about 16% free cash flow growth. This guidance reflects the strong foundation we built in 2025, our execution focus and confidence in our competitive positioning and also our pipeline visibility. The guidance includes the headwind from the termination of a BNPL client in 2025 which we have given on the slide. There will be no further headwind from this beyond the current year 2026.

And lastly, we have raised our 2028 targets based on our strong first year of execution, confidence in our strategic positioning and good visibility. The new targets are for ARR above $1.23 billion, EBIT of about $480 million and free cash flow around $410 million. I am very pleased with our first year's execution, and I'm very confident about our strategic positioning and momentum. I look forward to sharing more at our Capital Markets Day tomorrow.

Operator, please can be open for questions.

[Operator Instructions] The first question comes from the line of Boulan Fred from Bank of America.

If I can ask a question around the whole kind of demand/competitive environment. Are you seeing any kind of new behavior from some customers trying to leverage, some of the new tools you actually described yourself to meet their needs around core banking software? Or it's still very much kind of business as usual in terms of competition with incumbents and some of the new vendors?

Fred, let me take this one. So on the demand environment first, as we said, it was pretty stable throughout the year and also in Q4. And also if I look at the first 2 months in Q1, there has been no change so far. And this is pretty consistent across all regions and across the Tiers. So really, so far, no change. In terms of -- I'll take the external competition first, still see the same trends as last year, less of, I would say, the so-called new vendors given some of the problems they're facing in terms of funding so still pretty much the same competitors both in the U.S. and outside the U.S.

If there is -- the one thing we could call out is emerging markets, clearly showing a consistent positive trend with a slight improvement every quarter. Now when talking to our bank customers. Clearly, we haven't seen any trends in that direction you're mentioning. If at anything, the discussions are how you Temenos can help us with basically two things. One is with AI to have faster installation, faster deployment and easier upgrades. Because if we can help clients do that, they would substantially save on implementation time frames. But in terms of anything regarding the core banking space, we don't see any trends in that direction. Always keep in mind, there is two elements or two dimensions, which we need to be aware of. The customer risk erosion, which is very high with banks is a mission-critical systems. There is zero tolerance for hallucinations. You need to have as a bank always deterministic decision making and not probabilistic, which if you get it wrong, there is a very high cost to errors.

And on the other side, we are seeing as a trusted domain expert. We're facing very highly complex workflows, which are very difficult to replicate. So from that perspective, we're going to talk more about tomorrow. So far, not seen an impact.

The next question comes from the line of Charlie Brennan from Jefferies.

Two, if I could. Firstly, on the guidance, I'm pleasantly surprised by how confident you are for 2026. If I add back the BNPL contract, it looks like you're targeting an acceleration in ARR growth in '26. We're not seeing many software companies more broadly taking these market conditions as an opportunity to point to accelerating growth. Can you just give us some visibility into pipeline coverage maybe versus last year or level of confidence from the known renewal of 10-year licensing deals from prior years versus new logo requirements that just shape your confidence in 2026.

And then separately, just on the maintenance, obviously, very, very strong growth. Can you just remind us what customers actually get for the premium maintenance option? And is this a onetime uplift to your maintenance revenues? Or is it more of a sustainable source of growth going forward.

Charlie, on guidance, so first, if you look at the performance in 2025, where we absorbed already some of the headwind from this BNPL client downsell. We have mentioned throughout the year, on one hand, the stable sales environment. But on the other hand, we've also been investing a lot in additional quota carriers, which we have hired throughout the year. And clearly, that has helped the pipeline evolution. That's one thing, and you would also expect this not to be yet visible in signings in '25, but this should happen in 2026, given the usual 12 to 18 months lead time. That's one thing. So clearly, we feel pretty good about the pipeline given the investments we have done, specifically also in the U.S., clearly, we started with a relatively low number of salespeople, and we're now at 20-plus and they have substantially built a good pipeline, which we are now about to execute to sign deals throughout 2026.

The next one to highlight our confidence is we've done a lot of investments also in how we qualify the pipeline, how we track it. And as part of that, you've also seen now a number of quarters delivered as planned or as predicted. So we have not only better visibility and also the quality of the pipeline is much better understood.

And the third element I would put, and we always made it clear that there is also a number of large deals included in our guidance, our approach, taking a weighted approach in terms of the risk proved the correct one. And clearly also for 2026, we have quite a number of larger deals included in the pipeline. So overall, it's a mix of, let's say, internal process improvement and a good market environment, which is giving us that confidence. And yes, you're right, we would expect, excluding this impact to have 15% on ARR growth.

Now the renewal pool -- let's put it like this. We have talked about the special situation of what we see and what we have in terms of situation on 2027, where we get basically the 2 things coming together, the 10-year renewals from 2017 and the first time renewals from 2022. And clearly, that's helping in terms of our confidence. However, and I think this is an important element. We do not, today, I think there is a specific revenue benefit included in 2026 guidance. The majority of the revenue we would still expect to happen in 2027 from the respective pool. Clearly provides some sort of safety net. And what we can say is the combined renewal pool for 2027 is definitely something attractive. But this is the same case also for '28 and the years beyond, yes. And this is quite sizable, but let's leave it there.

Finally, on the maintenance part, what do clients get? I mean the premium maintenance, these are basically -- this is referring to two main areas. The one is you get enhanced support offerings designed for banks using Transact or other Temenos platforms who want a higher service level than the standard maintenance packages, faster response times and so on. So that's one thing.

And the other one is extended support which is basically for customers who are staying on older versions for a bit longer and are not yet ready to upgrade, but we want to continue maintenance for this. Now clearly, we put a lot of effort into selling this to our existing customers. We have seen some good -- very good traction in the last 2 years. We would expect eventually this to slow down, given we have not an unlimited pool. So let's say, 7%, 8% is probably the appropriate growth for 2026. And then we expect this over the next 2 years to tail down to maybe 6%. I think this is a fair assumption, putting the potential of this pool together.

The next question comes from the line of Sven Merkt from Barclays.

It would be great if you could comment a bit further on the U.S. progress. In the release, it reads a lot like coming from improved sales capacity and better execution. And is there anything else you would call out, especially maybe from a competitive perspective? And how much of this progress is already reflected in the guidance?

Sven, yes, let me comment on the U.S. situation. Clearly, we have seen a nice buildup in our pipeline in the U.S. And clearly, as we mentioned, the majority of signed deals, we expect to see the impact in 2026. So this is unchanged. And hopefully, we'll have good news to report. Now there is an element of U.S. growth, obviously embedded in 2026 guidance and in our entire midterm plan to 2028. So this is -- we've taken clearly a prudent approach to how much we reflect.

In terms of competition, we are clearly getting now into more RFPs and our win rate is improving. And I think we have -- we're really tackling a huge market with a real need and a long runway for banks to modernize. And I think we also have a much better value proposition in terms of our strategic road map versus where we were a year ago, both on the product side. We have the Orlando innovation Hub. So we're developing U.S. product for U.S. customers that can come in, co-innovate. So this is really helping also from a perception point of view.

I think we're very well on track for the U.S. market in terms of specific products. So that's -- we've already been launching some and more will happen throughout the year. But clearly, we have been able already to start selling this. We can also see -- and maybe there is some anecdotal evidence. We can also see competitors becoming more aware of Temenos, maybe as a difference to 1 or 2 years ago.

You'll hear more on this from Will and Barb tomorrow at our CMD. They're going to share updates on multiple fronts of our U.S. strategy, product pipeline, go-to-market initiatives.

The next question comes from the line of Toby Ogg from JPMorgan.

A couple from me. Just on -- just firstly, on the BNPL headwind, which you've mentioned in 2026 is 5 points of headwind on the subscription and SaaS, and 4 points on the EBIT and EPS. Is there any reason to think that revenue growth and EBIT growth wouldn't mechanically accelerate in 2027, given there is no further headwind from the BNPL headwind after FY '26? And then just secondly, just on the FY '28 upgrades, it looks like low single-digit upgrade on ARR, 7% on EBIT and low single digit on free cash flow. What was the main driver of the EBIT upgrade? And also, why is the upgrade a bit bigger than the free cash flow upgrade?

Yes. Toby, on BNPL, I think let's get through 2026 where we are confident about before we already talk on 2027. Clearly, yes, there should be no more headwind. Now we're still taking a prudent approach to both 2026 and also our midterm targets. And we're 1 year down into our journey, and we feel confident. And I think you can do the math what this means for '27 and '28.

On the upgrade for 2028, we have delivered a good 2025 with a good exit in Q4. And clearly, the upside on -- given also the accounting, the upside was higher on EBIT than it was on ARR and free cash flow. Now the maintenance or the premium maintenance growth, clearly, that will slowly tail down. But we thought this is something we feel confident that we can still deliver. We're not going to lose this. So this is why the EBIT upgrade.

The ARR upgrade, I think, is a function of the visibility we see on our pipeline. And ultimately, we wanted and we said we would maintain EBIT to free cash flow conversion, as we said 1.5 years ago around 85% plus. So this is to maintain this year basically the free cash flow of $410 million, yes. So we've always been talking about ARR growth with drive free cash flow growth. So the upgrade on ARR is about 2% and on free cash flow also 2%, but it's really the EBIT to free cash flow conversion, where we say 85% is the right number unchanged from what we said last time.

Next question comes from the line of Justin Forsythe from UBS.

Just a couple of questions here for me as well. So on Regions Bank, that was one of your big podium wins or a key reference client, if you will, in the U.S.? It was, I think, your second large Tier 1, 2 bank in the U.S. that you signed in 2023. It seems like they're talking about publicly a pilot in the latter part of 2026 and beginning customer conversion in 2027, which is, by my math, about what, a 4- or 5-year full rollout. So I wanted to ask if that was what your expectation was going into the project or if there have been any delays or anything that went faster? And if that would also mean a direct uplift to revenues as a result? And I just wanted to get a little bit more detail on the BNPL impact that you're mentioning. And maybe just correct me if I've got this wrong, but I think it was first mentioned back in 1Q of '24, and then we talked about maybe accelerated impact in '25. So just curious if maybe you could talk a little bit about the phasing of that. And why we're continuing to see the impact here in FY '26?

Justin, clearly, we can't really comment on behalf of clients, also at Regions Bank. We're clearly feel quite happy with the progress the project is taking. If the bank is talking positively in that respect, we appreciate this, but this is as much as we can say. But all large projects have a long evolution in stages, and we feel very happy with our relationship with Regions Bank.

On the BNPL customer, this is correct. We initially talked about in April on the Q1 '24 results. There was the first phase of, if you want, downsell. Last year, we mentioned this that there is an impact this year, which was reflected in our original guidance, which was prudent. We ultimately overdeliver despite this headwind. And so clearly, we see that as a good success. And the reason why we bring this up now is really because ultimately, it's about transparency and because it's impacting '26. We thought it's important to understand the underlying growth. I think, it's the last year that was important, we say, okay, we want to show the impact and also show the underlying growth. There is nothing more to that.

Got it. And maybe just because the first question was one that you wouldn't answer. Just a broader question on the core versus the other services business. I think I recall in the past that you're saying revenues roughly with the old TSL line were roughly 2/3 core versus maybe 1/5-ish Infinity, which is now the, I think, what you call it digital banking and then other solutions, wealth payments, et cetera. Maybe you could just talk a little bit about if that mix has stayed similar and/or how you expect it to evolve over time, i.e., is there a certain composition of the backlog that's skewed to say, core versus digital banking or otherwise?

Okay. So I think what you're referring and we're going to show this tomorrow. So if we look at product revenue, which includes SaaS and subscription and maintenance, and there's almost no term license left. If you look at this, then it's more than 80% is our core banking product. Digital is about 10% and the remaining 10% is spread across basically payments and wealth. And we would expect, given the growth trajectory and we're going to launch some very exciting tools this year on the digital side with AI. But you would expect this to maybe stay stable. But given the strong traction we see on core around the world and especially also in the U.S. maybe core would probably increase even to, let's say, 85% or something.

The next question comes from the line of Christian Bader from Zürcher Kantonalbank.

In Autumn 2024, you laid out your road map including, let's say, over investments of between $110 million and $150 million. I was wondering if that number is still or let's say, this range is still valid. And how much of the investments did you spend in 2025? And how much is embedded in terms of investments in your guidance for 2026?

Christian, so as you're going to see tomorrow, and I don't want to spoil the party. Our investment algorithm, and we're going to give more detail for '26 to '28 is still going to be somewhere in the same ballpark. It was a broader range, but we have invested quite a bit in 2025. So if you -- you're going to see it's the same $110 million to, let's say, $130 million, $140 million number we plan for the next 3 years.

What have we invested in 2025? We ended up -- as you can see from our cost base, pretty much where we had said we would end up. So around $30 million to $35 million we have invested. Clearly, there was a lot of self-funding or basically offset by efficiencies. For 2026, we have earmarked basically a very similar investment pool somewhere between, let's say, $28 million and $35 million and again offset by some efficiency gains, but that's about it. There is a bit of a mix shift. We were earlier with the go-to-market investment in 2025 and product came only in the second half. Clearly, the focus for 2026, it's mainly going into product because we see a lot of opportunity to invest when competitors are struggling. And when we have the market demand and really want to extend out competitive advantage. The investment is to be done now, including AI, but we saw this as an opportunity to accelerate some of the investments. But the overall pool remains broadly unchanged for the next 3 years.

[Operator Instructions] The next question comes from the line of Laurent Daure from Kepler Cheuvreux.

I just have two questions. The first is, if you go back to your digital and wealth operation, which are close to 20% of the sales. Referring the first comment you made, you told us that clients' decision-making was not really changing. I was wondering in this particular business as Wealth and Digital, given maybe the risk of AI disruption in the long run, do you see some clients delaying process, delaying contracts? Or is it the same pattern for your three businesses? And my second question is at the end of '25 on the maintenance, would it be possible to have a rough split between the customers that have taken a premium version and the ones that are still on the old version?

Okay. The first one on specifically Digital and Wealth. As you have seen from our numbers, we have so far not seen any delayed decision-making regarding any topics in the banks. And this is also what we see reflected in our pipeline. The discussions so far with the banks are not about, okay, we're going to write our own code to replace your wealth system or your digital system. Clearly, there is the potential for banks also experimenting at the edges around the core. But they clearly want to do this, and we do a lot. Barb is going to talk to more about this, about core innovation. A lot of the also AI-specific use cases with co-developing with banks. I think it's -- banks wanting to develop everything in-house and then maintain everything in-house and constantly upgrade and carry the burden of all the regulatory and compliance pressure. I think this is not something we see today, whether it will come in 10 years or so. But clearly, we don't have indications for that.

In terms of the mix question for premium maintenance, whether we can't give that kind of disclosure, there has been, let's say, a good take-up over the last 2 years. We would expect this eventually, you'll get to a very good percentage of clients who want to take that and have taken that. So this is why we would expect the growth to trend a bit down. As always, at the start of the year, we are prudent in terms of our financial guidance and this applies to our revenue lines.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to the company for any closing remarks.

Thanks very much. Thanks, everyone, for joining the call and webcast, and we look forward to seeing many of you at the Capital Markets Day tomorrow and continuing the dialogue. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call. Thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Temenos Q3 2025 Results Conference Call and Live Webcast. I am Matilda, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Takis Spiliopoulos, Interim CEO and CFO. Please go ahead.

Thank you, Matilda. Good evening, good afternoon. Thank you all for joining us for our Q3 '25 results call. I will talk you through our key performance and operational highlights for the quarter before updating you on our operational and financial performance.

So starting with Slide 6. We delivered a strong performance in Q3 '25, benefiting from a stable sales environment throughout the quarter. There was no impact from the U.S. bank credit concerns in Q3, and we have not seen any impact so far in the current quarter. Demand in Q3 was broad-based, and we signed a number of deals across new logos and the installed base.

I would note that there were no large deals in the quarter, though we do have several we expect to sign in Q4. We announced a number of AI-powered products this year, in particular, our AI agent for financial crime mitigation and Money Movement and Management, and we have seen good traction on both of these.

From an investment perspective, we have continued executing our strategic road map, investing across the business. Sales headcount, in particular, is on track to increase by around 50% by year-end. When we launched our new strategic plan in November last year, we indicated we expected around $20 million to $25 million of cost savings in 2025, and these efficiency gains are largely funding the investments we are making this year.

The operating leverage in our business model is evident. Our profitability has therefore benefited from the sales momentum and the cost efficiency programs, which are funding our investments. We remain prudent in our outlook given there are a number of large deals expected in Q4. However, based on our Q3 performance and the stable sales environment, we are raising our guidance for 2025 for subscription and SaaS, EBIT and EPS and are reconfirming our 2028 targets.

Turning to Slide 7. We signed a number of deals with new and existing clients this quarter, and we have highlighted 4 of these on this slide. A couple of the highlighted deals are in the Middle East with clients either expanding into new geographies or launching new digital banks on our platform. We also have a client in the ASEAN region upgrading and moving to the cloud and a client in LatAm moving on to Temenos core banking in the cloud. The key things across all of these clients are the reliability and scalability of our platform, the uniqueness of our country model banks that clients can leverage to rapidly expand into new geographies and the flexibility to deploy in the cloud or on-premise, and we will continue to expand our offering in all of these areas through our R&D road map.

Moving to customer success on Slide 8. This quarter, we went live on a major U.S. SaaS expansion with FundBank a global bank offering banking and custodial solutions to the asset management industry. FundBank selected Temenos to support their U.S. expansion due to our comprehensive SaaS banking capabilities tailored specifically to the U.S. market. We deployed a full suite of services, including digital and core banking, payments and data analytics on Temenos SaaS allowing FundBank to launch new products faster, elevate the digital experience and scale efficiently. Notably, FundBank can now offer a fully digitized corporate onboarding experience allowing clients to complete the process quickly and securely. This go-live continued the extension of our leadership in best of suite in the U.S., in line with our 2028 strategy around 3 core levers.

On Slide 9, we have our latest payments innovation that we launched at SIBOS in September. Money Movement and Management is a single pre-integrated AI-powered platform that enables our clients to replace fragmented, siloed legacy platforms or to rapidly launch new lines of business. It is deployable on-prem, in the cloud or as SaaS depending on the clients' needs. We have already seen good traction on this and other AI-powered products such as FCM AI agent, and we will continue investing in specific AI use cases to meet the needs of our customers.

Moving to the next slide. I am proud of the industry recognition Temenos continues to receive. It is a great achievement whether that is for the strength of our core banking platform, specific aspects of our offerings such as deposits or from our employees where we have been recognized as a Great Place to Work in 15 countries. This last recognition is particularly important to me and a testimony to our values and culture. People are the key to our success.

Finally, on Slide 11, I would like to give an update on the execution of our strategic road map. We have been hiring talent across the R&D organization globally, in particular in India and the U.S. Our innovation hub in Orlando is having a visible impact on our U.S. expansion strategy with the first prospective clients leveraging the hub to co-innovate with our teams in the quarter. And we are on track to increase sales headcount across the regions by 50% by end of December. We have also been making investments in our sales training and governance process to maximize the quality of our pipeline. Lastly, we are looking to improve the efficiency of our operating model rolling out AI initiatives across the business, including in software, legal, marketing and finance, in addition to R&D, where the focus is on leveraging AI for development, testing and support.

Moving to Slide 13. We delivered 11% total revenue growth this quarter, driven by broad-based wins with both new and existing customers. We had another strong quarter for subscription in SaaS, which grew 10% in Q3 as well as maintenance, which was largely driven by premium maintenance signings. Services revenue also grew for the second quarter in a row.

Moving to Slide 14. Our EBIT grew 36% in the quarter, driven by the strong revenue growth and operating leverage. Our ongoing investments in product and tech and go-to market were largely offset by our cost savings program, in line with our self-funded investment strategy that we announced at last year's CMD with an expected $20 million to $25 million of cost savings in 2025, funding the majority of our investments. There is also some impact from cost phasing with some catch-up expected in Q4 '25. EPS grew 41% in Q3, largely driven by EBIT growth and benefiting from the lower share count.

Moving to ARR. It has once again benefited from the growth in subscription in SaaS and maintenance. As a percentage of last 12 months revenue, ARR equaled 88%, up from 87% in Q3 '24. This gives us excellent visibility on future recurring revenue as well as our future cash flows helping underpin our 2028 targets as well.

On Slide 16, I would like to highlight a few items. Maintenance grew nicely in Q3, up 14% and we now expect maintenance to grow around 11% constant currency for the full year. I would also flag that subscription and SaaS has grown 12% year-to-date, total revenue 10% and EBIT 24%, which supports the increase in full year guidance we announced today. Given the continued strength in EBIT growth in Q3, we now expect our EBIT margin to be up at least 170 basis points for the full year.

On Slide 17, net profit was up 35% in the quarter, in line with EBIT with higher tax charges, offset by lower financing costs. The tax rate in Q3 was around 21%, and we maintained guidance of our 2025 reported tax rate of 15% to 17%, benefiting from a one-off tax benefit from prior years, which will materialize in Q4 '25. The normalized underlying tax rate, excluding this one-off benefit, remains at 19% to 21%. EPS grew by 42%, ahead of net profit growth as it did last quarter, once again supported by the lower share count.

Moving to free cash flow. We delivered significant growth of 30% in Q3 '25. As expected, we are showing an acceleration in H2 '25 driven by the growth in deferred revenue and lower restructuring costs than in H1 '25. We have now absorbed $30 million of restructuring headwind in the first 9 months of the year. Free cash flow has now grown 13% year-to-date. So we are confident that we will deliver on our full year guidance of at least 12%.

Next, on Slide 19, we show the changes to group liquidity in the quarter on a reported basis. We generated $61 million of operating cash and bought back $148 million worth of shares, completing our CHF 250 million buyback program in August. We ended Q3 '25 with $184 million of cash on the balance sheet. Our leverage stood at 1.4x at the end of the quarter, and we also expect to end 2025 within our target leverage range retaining flexibility for either further share buybacks or bolt-on M&A.

Now moving to Slide 20, a couple of items to highlight on our balance sheet. We completed our CHF 250 million share buyback program in August at an average price of CHF 63.25 per share, representing 5.5% of registered share capital. These shares will be proposed for cancellation at the 2026 AGM. In July, we closed a $500 million revolving credit facility signed in Q2. As previously mentioned, we have no further refinancing requirements until 2028. The bond maturing in November of this year has already been refinanced by the bond issued in March of this year. Our reported net debt stood at $702 million at quarter end.

Turning to Slide 21. I would first like to note that we remain prudent in our 2025 outlook, given there are several large deals in the Q4 pipeline. However, given the good performance in the first 9 months of the year, we are increasing our subscription and SaaS guidance to at least 7% to reflect the sales momentum. As a result of our operating leverage, premium maintenance signings uplift to Q3 EBIT and the self-funding of our investments, we are raising our EBIT growth guidance from at least 9% to at least 14%. Correspondingly, we are also upgrading our EPS growth guidance from 10% to 12% to 15% to 17%.

We are keeping ARR guidance of at least 12%, given the delayed benefit to ARR from stronger subscription and SaaS growth, and we're also keeping free cash flow guidance of at least 12% growth unchanged. As a reminder, our guidance is non-IFRS in constant currency, except for EPS and free cash flow, which are on a reported basis. Both the 2025 guidance and the 2024 pro forma numbers exclude any contribution from multifunds. And free cash flow is, of course, under our standard definition, including IFRS 16 leases and interest costs.

And lastly, we have reconfirmed our 2028 target. Before we head to Q&A, I'm sure you will have seen the statement from our Chairman in the press release that the CEO search conducted by the Board is currently ongoing. As you can appreciate, this is not something I can comment on any further.

With that, operator, can we please open the call for questions.

[Operator Instructions] The first question comes from the line of Sven Merkt from Barclays.

Maybe one on the pipeline. Can you just comment on the quality of the pipeline and the visibility you have into Q4? You called out that there are a number of large deals in the pipeline. I guess this is the case usually in the fourth quarter. So is there anything unusual here to point out? And what sort of pipeline conversion do you assume for these large deals compared to prior years?

So on the pipeline, there is nothing that has changed from the previous 3 months. Clearly, we have the large deals in the pipeline as we commented back in July. And we also do not assume any change in conversion rates. The way we look at this is always as a weighted average at the start of the year when we provide guidance, clearly, we take an assumption on conversion rate of large deals, which is lower than we use for, let's say, the average deal. So nothing has changed in terms of the pipeline.

What we have clearly seen is no impact from any macro uncertainty. I think that's good to highlight, given we're 3 months more into the year. We have seen in Q3 good execution and good conversion rates across the regions. So also nothing to highlight. But clearly, we want to remain prudent on how we assess the pipeline.

Clearly, the pipeline is growing quite nicely, as you would expect with a substantial increase in the number of salespeople working to build the pipeline. But again, let's remain prudent. There is still some macro uncertainty out there, but we have seen no change in bank's behavior in terms of spending plans. Clearly, they still want to invest. They prioritize digital transformation. So this is, I would say, what we call a stable sales environment, and we expect this to remain for the remainder of the year.

The next question comes from the line of Laurent Daure from Kepler Cheuvreux.

I have one and a follow-up. First is on the support revenue. I mean you had another great quarter. Where do you stand in terms of the mix between the premium maintenance and classic maintenance, in order to help us to see what could be the growth rate in maintenance a bit normalized 1 or 2 years out? And my follow-up is on the U.S., if you could give us an update on a penetration of some Tier 2, Tier 3 banks that were part of your long-term plan.

Laurent, let me address the maintenance question first. Clearly, 14% was a good number. Discontinued the trend from what we have seen last year and also the first half, clearly benefiting from premium maintenance, but it's not just premium maintenance. Also, keep in mind, we get uplift from renewals, and we also have the CPI indexation, which over the years, obviously falls into the number.

We have seen clearly clients taking up our premium maintenance offering on the one hand, but on the other hand, we have also seen clients not churning on this. So they maintain those premium maintenance offerings for a much longer period than in the past, and clearly, that helps. If you don't have churn, that helps a lot. And this is what we also see in terms of visibility going forward.

Now we said 11% for the full year. So that's about the number in Q4 as well. For the next years, I think it's too early to provide specific guidance, and we're not disclosing the split other than we're growing on all the maintenance streams. For the next years, I think what we had implied in our original CMD plan was somewhere 5%, 6% as a base rate because clearly, we have seen some catch-up, so some normalization is probably what we would model in, in that case.

On the U.S., as you would expect, clearly, we're seeing a very nice buildup in our pipeline for the U.S. I think also in terms of the signed deals, we will see even more of the impact materializing in 2026, in line with our strategy. The sales team is now fully in place. And I think this is clearly shown in the pipeline generation. We see -- we get with more people and a better understanding of our offering. Clearly, we get into more RFPs and also our win rate is improving from the data we have. And clearly, you need to keep in mind we are tackling a huge market with a real need and a long runway for banks to modernize.

I think we have a much better value proposition in terms also of strategic road map versus where we were 1 year ago. The investments we have done, both on the product side but also on the go-to-market side. And some of that road map, some of the products in the road map that are very specific to the U.S. market.

And we need to be -- as we said, we wanted to be closer to the customers, and clearly, they see our investment in go-to-market in the product as well. So yes, the innovation hub clearly has helped a lot also for awareness building. As you know, pipeline is 12 to 18 months to develop. This gives us a good level of confidence that the conversion of this pipeline in to signed deals will clearly will accelerate next year.

We now have a question from the line of Frederic Boulan from Bank of America.

If I may, a question around Q4. So if I look at your guidance, weighted guidance still implies much less growth in Q4 versus what you've done year-to-date and the same on EBIT, you're guiding for 170 bps margin expansion. I think you've done 4 points in the first 9 months. So any specific moving parts you want to call out for Q4?

And then anything you can share on your free cash flow conversion? You've grown EBIT $22 million year-on-year in Q3; net profit, $16 million, but the cash flow growth is about $6 million. So if you can talk about some of the drivers for free cash flow conversion? Anything specific you want to call out for the rest of the year, DSOs or else? And any specific elements you want to call out into next year?

Okay. A lot of questions, Fred, let me take them one by one. I think on -- if we start with subscription and SaaS and keep in mind that we want to remain prudent as we started the year, there is still macroeconomic uncertainty. And what we did, given we have not changed the outlook for the sales environment, the -- if you want the upside, we were going for around 6% in Q3, delivered 10%. So the upside of, let's say, $5 million, we let it flow through the -- into the guidance. So this is where the upside for subscription and SaaS is coming from.

We are not flagging any explicit risks other than we have large deals in there. No change to visibility. Again, it's at least 7%, and we want to remain prudent for this time. Also keep in mind, we have -- and this shows maybe the underlying very robust growth that we still have the impact from this BNPL customer in every quarter. So if you exclude the impact from that, we would show -- this really shows the underlying growth, which is very healthy. So nothing specific to flag here other than large deals, and we want to remain prudent.

On EBIT, yes, the guidance implies some deceleration. We have seen year-to-date EBIT growth of 24%, clearly has benefited from a strong growth in subscription and SaaS of 12%, strong maintenance growth. And clearly, there also been the full impact of the cost savings initiatives, but clearly not yet the visibility on the investments, which are tracking somewhat slower.

But if I look at the Q3 exit cost in September and October trend that clearly is the right number to target. Also keep in mind, we have the majority of our variable costs, bonus accruals, commissions always in H2 versus H1, even more loaded towards Q4. So clearly, that is driving some of the cost increase. And it's very similar to last year. If I look at the cost we added H2 versus H1 last year, H2 versus H1 this year, this is very similar, maybe even some higher costs there. And ultimately, it's at least 14% is the guidance. So that's where we would go.

Finally, on free cash flow. Yes, 30% in Q3 was clearly materially ahead of our full year guidance. But keep in mind, we had the bulk of restructuring costs of $30 million out of the $35 million in the year-to-date number and substantial outflows linked to that. And then it was really in line with our expectations, the 30%, which gives us 13% for year-to-date growth, so well on track.

And there's clearly nothing special to there. If you were to exclude -- if you take the EBIT to free cash conversion, if you were to exclude restructuring costs, we will be at a very high conversion. But even with that, let's say, EBIT of 14% or at least 14% and free cash flow at least 12%, so there is not such a big delta. We have a bit of catch-up to do on investments in Q4, so we feel comfortable with the at least 12% free cash flow guidance. Nothing special to flag on cash.

The next question comes from the line of Josh Levin from Autonomous Research.

Two questions for me. Just to be clear on the new guidance, you've talked about large deals. To what extent does the new guidance bake in the new deals? Are they fully baked in or partially baked in?

And then second question, I read how Morgan Stanley is using AI to rewrite old outdated code written in COBOL to more modern programming languages. Is that a good thing or a bad thing for Temenos?

I think there has not much change in terms of how we assess large deals. Clearly, number one, we clearly want to remain prudent. What we -- what I said before is at the start of the year, we have a view on large deals evolution and for any specific quarter and the full year we always take a risk-weighted approach to large deals, i.e., we assume -- for the same dollar value of large deals, we assume a lower conversion rate than for a standard deal size. So this is how it's reflected in Q4 and the full year guidance. There is no excessive dependency on large deals. We had this in Q2, given Q2 was a much smaller quarter than Q4. This is why we had flagged this in Q2.

On AI, we are -- I mean, we are using AI ourselves quite a lot. And clearly, AI is a big opportunity. I think on both sides, we are clearly investing on AI use cases on the client side. We showed some of the AI-enabled products. But clearly, we have rolled out a substantial double-digit number of AI initiatives internally as well. So we are product and tech organization, we are having some pilots with some clients. It doesn't -- it's not that straightforward to take COBOL code and just use AI and make it modern. It sounds nice and there is a lot of challenge given there is no documentation and anything. What we can -- what AI can help with is in the documentation of old code and then trying to map this into new functionality.

A Tier 1 bank like Morgan Stanley, they will always have the capacity of internal development. So they have done it before. So it's unlikely they would change that. But what we see is helping banks reduce implementation effort helps them move faster to a newer release, move faster in upgrades. This is where we see the AI opportunity. And I think this is tracking well with the pilots we're doing.

We now have a question from the line of Charles Brennan from Jefferies.

It sounds like 2025 is in good shape. I was wondering if you can just lift horizons to 2026. And specifically, you think about the subscription revenues. You started to shift to subscription in [ anger ] in 2022. And if those deals run to the natural 5-year duration, I guess that's a 2027 renewal cycle.

Do you think that's how it will play out? Or do you think it's inevitable that those deals renew slightly earlier than the contract termination date? And we start to get a renewal cycle start in 2026. And is that going to start to help the visibility and the predictability of the business?

It's an interesting point you raise. And we had the start. And if you go back and look at the numbers in 2022, clearly, we started with the subscription transition, but we still had quite considerable term license business there as well, so not all the license business in '22 was subscription. It's correct that those will come up for renewal in 2027. It's also correct that you're going to see the 10-year renewals from 2017, which was a strong year for Temenos, renewing in 2027. Let's not get into the debate about when these contracts will renew.

In general, as you know, clients never wait until last minute to renew because that's not a good starting point from their side. So do we have the visibility on 2026 subscription? I think we have good visibility stemming especially from the pipeline build we have seen over the last 12 and 18 months. The renewal cycle is something you take as it is planned. It's not -- we don't have a specific renewal strategy. So let's see, we have good visibility on '26. Let's not speculate on the renewals.

Next question comes from the line of Justin Forsythe from UBS.

I've got my one question here and follow-up. So Takis, I guess, from the outside looking in, it would seem like the year has gone quite well to start under the guidance and shepherding of Jean-Pierre. So maybe you could talk a little bit about your initial conversations with the Board, what they expect you to do? Are you continuing to execute on the strategy that he laid out? I would imagine that, and I caught this from the commentary on the management call that there are some things that the Board would expect to change going forward. So are you then, therefore, beginning to implement some of those changes?

And maybe you could just outline a little bit on the strategy going forward. And then I just wanted to hone in a little bit on the big contract loss. So maybe you could just remind us when you expect to lap the impact of that and the magnitude of it. And just circle back on what exactly happened there? If the provider, I think it was PayPal, decided to go with just a different provider or if that was something that they decided to in-source?

First, on strategy. Keep in mind, our strategy is not created by 1 person. So the strategy which was presented last year at the CMD and validated before by the Board was created by the entire management team and actually the leadership team. So this is how we came up with a bottom-up strategy looking at what we need to do on the product, what we want to do on product and go to market and aligning this with the market perception.

So it was not Jean-Pierre creating a strategy, it was really the leadership which was then validated by the Board. So the strategy, as our Chairman mentioned early September, remains unchanged, and this is also why my primary focus is on executing the strategy. We've done this in Q3, we'll continue to do this also in Q4 and beyond.

We have the people in place, and it's actually great to see that everyone is delivering. And the team is very motivated and standing behind the strategy. So it's really a focus we all have. And if you look at the progress we have seen across the different elements, we said we're going to substantially expand our sales force across the regions, they have done that. We will increase the headcount 50% by year-end. On the product side, Barb has brought in some great talent. And we're also hiring both in the U.S. and in India complementing our road map. So it's really executing this and then on top of all the operating model changes.

On the BNPL, we -- I think there is no new information to give on BNPL on the reasons we can't comment on individual customers. And whether the name you mentioned is correct or not. Clearly, there is a headwind this year, which we communicated already at the start of the year. It's equal numbers in every quarter and the guidance is fully reflecting this.

Okay. Got it. No, that's fair. Maybe I'll just ask then since you can't answer that one, a quick follow-up, which is on the sales force that you expect to increase quite drastically. Could you just give us a little bit of a lean on what types of customers you expect them to serve. So is that Tier 1, Tier 2, Tier 3 or down in the credit union space and what geographies you expect them to come in or if that's more balanced?

So again, back to the strategy. We're growing in all regions. So the sales force is expanding in all regions across -- really across the world. It was a scale-up, which we needed and wanted to do also to support our 2028 targets. We emphasize the U.S. where we started first, but Will and his MDs have expanded the sales force across the world.

And it's -- nothing has changed in terms of the strategy. In the U.S., we go Tier 2, Tier 3, the three growth levers we have defined best of suite, the modular approach and adjacent solutions. So the growth levers are valid and still applied globally. So no change to tiering or regional focus or anything. It's just really adding capacity and capabilities to deliver the 2028 targets. As we said, it's an investment year. The good thing is we do a lot of self-funding for those investments, but no change to that.

[Operator Instructions] We now have a question from the line of Toby Ogg from JPMorgan.

Maybe just one quick one and then a follow-up. First one, just on the guidance. EBIT and EPS upgraded, but no change to the free cash flow guidance. What are the factors driving that?

And then just on AI. You mentioned in the release a number of AI product launches gaining traction. So FCM, AI agent and the money movement and management piece. Can you just give us a sense for how you're monetizing this? Is this through higher pricing or is there incremental modules being cross sold?

And then can you just give us a sense for the size of these AI product revenue streams today and then when you'd expect them to start becoming a more meaningful revenue driver for you?

Toby, let me get back to the free cash flow question first. Clearly, as we said, if you look at the pure numbers, there is not that much change in terms of the EBIT growth and the free cash flow growth expected for this year, if you want to go back to the conversion question.

But ultimately, there is always a lag. It's similar to ARR. We can't translate a positive subscription and SaaS impact to free cash flow immediately given there is a time difference. And as we said, there is still some catch-up in terms of investments to do. And finally, there is -- we still have a large Q4 ahead of us. This is always the most important quarter for us in terms of free cash flow. So yes, we're quite happy with our 12% free cash flow guidance.

Now on the AI products. So clearly, we had some product launches at the flagship event TCF, FCM AI agent and also the other product. Now clearly, we're not going to go into that level of detail, although that we have seen a number of deals signed for -- or especially the FCM agent already in the last few months. Usually, this comes as an add-on to existing core installations, so clearly, there is a good market demand there.

We have also seen a very large Tier 1 bank using this, so that's a testimony to the real use case we're providing here. And it's a very interesting product, substantially reducing the number of false positives in screening, which is driving a lot of manual work at banks. So there is clearly a business need for that.

So the numbers are still small, especially in the context of our of overall business. But this is what we are seeing together with banks, developing use cases. And referring to our development partner program, we're not just going out there and inventing something in the lab and then see whether this sticks. We're really codeveloping use cases, which we know banks are interested in and are willing to pay for this. Yes, but no further financial details we can provide on AI products.

Ladies and gentlemen, that was the last question. The conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.