Temenos (TEMN) Q2 2026 earnings summary

Executive summary

• Stable sales environment in Q2 2026, with strong APAC and US momentum; large European deals slipped to Q3 but were not lost, and most were signed early in Q3.

• Double-digit growth in premium maintenance signings and free cash flow, with profitability supported by operational leverage.

• Strategic investments included senior hires, increased development headcount in India and US, and the acquisition of additiv to expand wealth management and AI orchestration capabilities.

• Free cash flow grew 14% year-over-year in Q2 2026.

• FY-26 and FY-28 guidance reconfirmed, with strong Q3-26 pipeline and visibility.

Financial highlights

• ARR grew 11% year-over-year to CHF/USD 881 million by Q2-26 end.

• Total revenue up 1% in Q2-26 and 6% in H1-26 year-over-year.

• Subscription and SaaS revenue declined 13% in Q2-26 due to deal slippage, but most revenue recovered in Q3.

• Non-IFRS EBIT grew 4% in Q2-26 to USD 116.1m, with margin up 1pt to 41.3%.

• Free cash flow reached CHF/USD 74 million in Q2-26, up 14% year-over-year.

Outlook and guidance

• Q3-26 guidance: subscription and SaaS revenue expected to grow at least 30% year-over-year.

• FY-26 guidance: ARR +12%, subscription and SaaS +9%, EBIT +9%, EPS +7%, FCF +16%.

• FY-28 targets reconfirmed: ARR ≥ USD 1.23bn, EBIT ~USD 480m, FCF ~USD 410m.

• Additiv acquisition expected to be marginally accretive to FY-26 ARR and SaaS, neutral to EBIT, EPS, and FCF.

• Guidance includes a negative headwind from the termination of a BNPL client in FY-25, impacting FY-26 only.