Banking software provider Temenos TEMN.S posted better-than-expected quarterly results on Tuesday, topping a narrow range of analysts' forecasts while sticking with its base-line outlook calling for 10 to 15 percent growth over the next several years.
The Swiss software maker reported revenue for the fourth quarter of $191.1 million, up 13 percent in constant currency from the year ago and above the mean forecast of $185.81 million by four financial analysts, according to Thomson Reuters data.
Total software licensing grew 21 percent in constant currency to $91.8 million, topping the forecast range it had set in October for growth of around 15-20 percent, based on U.S. accounting standards (Non-IFRS).
Temenos said it expected total non-IFRS revenue to grow between 7.5 percent and 11 percent in 2017, in line with its annual guidance a year ago.
The outlook is based on its pipeline of business selling core banking, wealth management software and other financial products, but excludes the effect of Temenos signing any further, large-scale deals with big banks. Such contracts can significantly boost its outlook, but are hard to predict.
Over the past year, Temenos has signed bank modernisation deals with Nordea NDA.ST , its largest contract ever, and Standard Chartered for wealth management software, and a core banking supply deal with Bank of Ireland BKIR.I , which has led to short-term jumps in its reported results.
"We have had a couple of really stellar years. I think it would be naive to build into our base-case assumption that (growth) is a foregone conclusion," Chief Executive David Arnott said in an interview.
"The last thing we want to do is to be apologising for only doing 18 percent when its turns out to be 15," he said of sales.
Fourth-quarter earnings before interest and taxes (EBIT) rose 15 percent to US$74.8 million, or 88 cents a share, topping analyst consensus forecasts for growth around 12.5 percent, according to Thomson Reuters data.
It also agreed to acquire Australia-based Rubik Financial Ltd (RFL) in a cash deal valuing Rukik at around A$68 million, or US$51.90 million, at current exchange rates.
The shares, which closed at 73.75 euros in Zurich before the report, have doubled over the past 18 months. The stock has risen by a modest 3.5 percent since the start of this year.
Temenos holds its annual capital markets day in London on Wednesday. ($1 = 1.3103 Australian dollars)
