Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights on conversion rates in regions other than the Middle East, and how conservative is the Q4 guidance? A: In regions like North America and Europe, pipeline conversion rates were consistent with previous quarters. The Middle East faced execution issues, but we've taken corrective actions. For Q4, we've applied historical conversion rates for deals under $1 million and reviewed larger deals individually, ensuring a conservative approach.
Q: What are the key priorities and investment areas for Temenos, and what has changed in the software license side? A: Our focus is on improving go-to-market strategies and operational excellence. We've recruited a VP of sales operations to enhance sales execution. The Q3 shortfall was mainly due to the Middle East, and we've taken steps to address this. We're also investing in product and technology to support our growth plans.
Q: How are you addressing the efficiency program, and what are the expected cost savings and restructuring costs? A: We've reduced management layers and are focusing on empowering managers. The efficiency program has led to $7 million in restructuring costs, with mid-single-digit savings expected by year-end. We're balancing growth and profitability by self-funding investments through efficiency savings.
Q: Can you explain the recent performance in Europe and the status of the Julius Baer project? A: Europe's performance was as expected, with no significant issues. Regarding Julius Baer, they remain a key client using our software across various regions, and recent reports suggesting otherwise are incorrect.
Q: How should investors model the subscriptions and licenses line given its volatility? A: Subscription accounting is similar to term licenses, and volatility is inherent. By year-end, term licenses will contribute minimally, with subscription being a key driver. We're working on improving predictability by increasing pipeline and reducing dependency on large deals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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