ZURICH (Reuters) – Temenos on Monday forecast slower growth in 2024 earnings before interest and taxes (EBIT) compared to last year when its results beat expectations on solid deal execution.
The outlook came as shares in the Swiss software firm began recovering from losses that wiped out nearly one-third of its stock market value last week after a report by Hindenburg Research alleging accounting irregularities.
Temenos had swiftly refuted the report, saying it contained factual inaccuracies and analytical errors, as well as false and misleading allegations that were “intended to adversely impact the company’s share price”.
Confirming 2023 results, a preliminary report of which was published on Jan. 19, Temenos said it expected EBIT to grow by 7-9% in 2024 following an increase of 12% last year. It also forecast annual recurring revenue (ARR) growth of around 15% after the firm posted 16% ARR growth in 2023.
Monday was the first day its shares had risen since the report, closing the day up 8.8% at 66 Swiss francs.
Chairman Thibault de Tersant said Temenos stood by its position on the report but would oversee a thorough examination of the allegations raised with independent third parties.
One activist shareholder, Petrus Advisers, last week responded to the Hindenburg report by urging Temenos to replace its CEO, even as it also described some of the contents as “hearsay” from disgruntled employees.
Thibault noted the company was “seeking an exceptional individual to lead the next phase of Temenos’ development” and that he would head the board committee overseeing that – reiterating plans Temenos previously had in place.
The report published by Hindenburg alleged it had uncovered “hallmarks of manipulated earnings and major accounting irregularities” at Temenos, and cited public filings and interviews with former employees of the company.
(Reporting by Paolo Laudani, Ozan Ergenay and Zurich Newsroom; Editing by Emelia Sithole-Matarise)
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