تيمينوس - مخالفات محاسبية كبيرة ومنتجات فاشلة وتحول وهمي - أبحاث هيندنبورغ

‫‪20‬‏‪2/‬‏‪ 1:10 2024/‬ص‬ ‫تيمينوس‪ :‬مخالفات محاسبية كبيرة ومنتجات فاشلة وتحول وهمي ‪ -‬أبحاث هيندنبورغ‬
‫تيمينوس‪ :‬مخالفات محاسبية كبيرة‪ ،‬ومنتجات فاشلة‪ ،‬وتحول‬

‫وهمي‬
‫تم النشر بتاريخ‪ 15‬فبراير ‪2024‬‬
‫احصل على أحدث التقارير التي يتم تسليمها إلى صندوق الوارد الخاص بك‬
‫عنوان البريد اإللكتروني‬ ‫يشترك‬
‫هي شركة تطوير برمجيات وخدمات مصرفية مدرجة في سويسرا تبلغ قيمتها السوقية حوالي ‪Temenos (SWX:TEMN) 7.5‬‬
‫‪.‬مليار دوالر أمريكي وتخدم ‪ 3000‬عميل على مستوى العالم‪ ،‬وقد حققت إيرادات أولية بقيمة مليار دوالر أمريكي لعام ‪2023‬‬
‫كشف تحقيقنا الذي استغرق أربعة أشهر في شركة تيمينوس‪ ،‬والذي تضمن مقابالت مع ‪ 25‬موظًفا سابًقا‪ ،‬بما في ذلك كبار القادة في‬
‫الشركة‪ ،‬عن السمات المميزة لألرباح التي تم التالعب بها والمخالفات المحاسبية الرئيسية‪ .‬ويتضمن ذلك أدلة على إيرادات متقلبة‪،‬‬
‫وشراكات زائفة‪ ،‬وتأخير تجديد العقود‪ ،‬والعقود القديمة‪ ،‬والرسملة المفرطة الستثمارات البحث والتطوير التي تبدو غير موجودة‪،‬‬
‫‪.‬وغيرها من العالمات الحمراء المحاسبية الكالسيكية‬
‫بدت هذه الممارسات المحاسبية العدوانية بمثابة سر مكشوف بين العديد من الموظفين السابقين الذين تحدثنا إليهم‪ .‬أشار العديد منهم إلى‬
‫أن الرئيس التنفيذي أندرياس أندريادس يشجع هذه الممارسات‪ ،‬مما يساعد على التستر على عدم رضا العمالء الكبير عن المنتج‬
‫‪.‬واستنزافهم‬
‫لتسريع اعتماد الخدمات المصرفية" ‪ fintech Mbanq‬عن شراكة استراتيجية مع ‪ Temenos‬في أكتوبر ‪ ،2021‬أعلنت شركة‬
‫تضمنت ‪ Temenos،‬كخدمة في جميع أنحاء الواليات المتحدة"‪ ،‬سوقها االستراتيجي الرئيسي‪ .‬وفًقا لمدير تنفيذي سابق في شركة‬
‫‪ Temenos.‬بشراء برامج وخدمات بقيمة ‪ 20‬مليون دوالر من شركة ‪ Mbanq‬الصفقة قيام‬
‫قامت ‪ Temenos‬أن شركة ‪ Temenos‬تثبت سجالت الدعاوى القضائية والبيانات المالية والمديرين التنفيذيين السابقين لشركة‬
‫بتمويل شراء برامجها الخاصة سًر ا ‪ -‬وانخرطت فعلًيا في مخطط دائري من خالل القيام باستثمار غير معلن بقيمة ‪ 20‬مليون دوالر‬
‫‪.‬في نفس وقت شراء البرنامج تقريًبا ‪ Mbanq‬تقريًبا في‬
‫أخبرنا مسؤول تنفيذي سابق في تيمينوس‪" :‬تم التوقيع على الورقة القابلة للتحويل في نفس اليوم‪ ،‬نفس الساعة التي تم فيها توقيع الصفقة‬
‫لصالح مبانك‪ ...‬ألنهم [مبانك] لم يتمكنوا من التوقيع عليها إذا لم يكن لديهم المال"‪ .‬وأضافوا‪" :‬لو كان ذلك في الواليات المتحدة وكان مع‬
‫‪".‬هيئة األوراق المالية والبورصة‪ ،‬لكان الجميع خارًج ا‬
‫ومقرها الواليات ‪ DXC Technology‬عن شراكة مع شركة البرمجيات المصرفية ‪ Temenos‬في فبراير ‪ ،2021‬أعلنت‬
‫ما يقرب من ‪ 8‬إلى ‪ 10‬ماليين دوالر من تراخيص ‪ DXC‬أنها تستلزم شراء ‪ DXC‬المتحدة‪ ،‬والتي أخبرنا مسؤول تنفيذي سابق في‬
‫‪ Temenos.‬البرامج من‬ ‫الخصوصية ‪ -‬البنود‬
‫‪https://hindenburgresearch.com/temenos/‬‬ ‫‪1/75‬‬
‫كانت "تغير قواعد اللعبة" وستعمل على "تسريع تغلغلنا" مع البنوك ‪ DXC‬في حين أكد تيمينوس للمساهمين مراًر ا وتكراًر ا أن شراكة‬
‫أن الصفقة "تم التعجيل بها" في اليوم األخير من العام "ساعد ‪ DXC‬الكبيرة في أمريكا الشمالية‪ ،‬أخبرنا مسؤول تنفيذي سابق في‬
‫"‪.‬تيمينوس في الحصول على رقمه السنوي"‪ .‬قالوا عن الصفقة‪" :‬هذه ليست شراكة‪ .‬لقد استخدمتنا لبيع الترخيص‬
‫وفًقا للمدير التنفيذي‪ ،‬تم إنهاء الصفقة الحًقا بسبب التقاعس من جانب تيمينوس‪ ،‬مما أدى في نهاية المطاف إلى شطب ما يقرب من ‪8‬‬
‫‪”.‬قائاًل "لقد تركونا [تيمينوس] عند المذبح‪ ...‬لقد أعطيناهم مجموعة من المال وبعد ذلك ابتعدوا حرفًيا ‪ DXC،‬ماليين دوالر لشركة‬
‫شطب ذلك من كتبهم‪ "...‬وأخبرنا أن ]‪ [DXC‬أن الشراكة فشلت‪ ،‬قائاًل ‪" :‬كان على ‪ Temenos‬أكد مسؤول تنفيذي سابق في شركة‬
‫‪".‬وكل شيء يتعلق بـ "البيع والنجاحات السريعة "‪ Temenos‬الصفقة كانت "نموذجية لشركة‬
‫ممارسة تأجيل تجديد التراخيص‪ ،‬غالًبا بخصومات‪ ،‬لتعزيز ‪ Temenos‬خالل بحثنا‪ ،‬أكد ‪ 4‬موظفين سابقين مختلفين في شركة‬
‫األرباح قصيرة األجل مع تفكيك إيرادات التجديد المستقبلية‪ .‬وقد أخبرنا أحد المسؤولين التنفيذيين السابقين قائًال‪" :‬إذا كان هناك تجديد‬
‫‪".‬يمكنهم المضي قدمًا به‪ ،‬فسوف يكونون عدوانيين للغاية بشأن القيام بذلك‪ ،‬وهذا ما حدث‬
‫القياسية في عام ‪ ،2019‬قائًال‪" :‬عندما ‪ Temenos‬وصف مسؤول تنفيذي آخر تأثير التقدم العدواني من خالل االستشهاد بإيرادات‬
‫كان المستثمرون الخارجيون ينظرون إلى هذا‪ ،‬اعتقدوا أن الترخيص ينمو ونحن نحصل على عمالء جدد‪ .‬والحقيقة هي أن مبيعات‬
‫"‪...‬العمالء الجدد كانت تنخفض‬
‫عندما ُسئلنا عن تأجيل التجديدات‪ ،‬أخبرنا مندوب مبيعات سابق ببساطة‪" :‬لقد اعتقدت للتو‪ ،‬كما تعلمون‪ ...‬ستكون هناك بعض الفضائح‬
‫"‪...‬المحاسبية في مرحلة ما‬
‫أخبرنا مسؤول تنفيذي سابق في تيمينوس أن الشركة أيًض ا تقوم بانتظام بتأخير العقود لتحويل األرباح إلى أرباع سابقة‪ ،‬قائًال‪..." :‬‬
‫الممارسة القياسية‪ ،‬التي كانت معروفة تماًم ا وتغاضي عنها أندرياس وماكس [المديرون التنفيذيون الحاليون والسابقون]‪ ،‬ولكن تم‬
‫رفضها علًنا‪" ،‬كان األمر هو أن الفرق القانونية ستمنح توكياًل لفرق المبيعات لتأخير الصفقة التي تم التوصل إليها‪ ،‬كما تعلمون‪ ،‬بعد‬
‫"‪.‬نهاية الربع‬
‫أكد قائد مبيعات سابق من تيمينوس ممارسة التأريخ العكسي‪ ،‬قائاًل ‪" :‬ال تثق في أي من المعلومات العامة‪ ...‬بما في ذلك مكالمة المحلل‪،‬‬
‫‪”.‬حسًنا؟ … لقد رأيت الصفقات التي تم إغالقها في شهر يناير وتم سحبها إلى الربع السابق‪ ،‬حسًنا؟ إنهم يفعلون ذلك‬
‫تقول شركة تيمينوس إنها تستثمر ‪ %20‬من إيراداتها مرة أخرى في البحث والتطوير‪" ،‬أكثر من ضعف مستوى" أقرب منافسيها‪.‬‬
‫أن اإلنفاق المعلن عنه على البحث والتطوير كان "غير موجود" ‪ Temenos‬أخبرنا كبار المسؤولين التنفيذيين السابقين في شركة‬
‫‪".‬و"غامًض ا‬
‫أن غالبية استثمارات البحث والتطوير التي أبلغت عنها شركة ‪ Temenos‬أخبرنا أحد المسؤولين التنفيذيين السابقين في شركة‬
‫كانت في الواقع تكاليف تنفيذ خاصة بالعميل‪" :‬كل ما تفعله هو مجرد أخذ شيء مخصص للعميل والقول إنه بحث ‪Temenos‬‬
‫"‪.‬وتطوير‪ .‬ليست كذلك‪ .‬هذا هو الجزء األكبر منه‬
‫أعلى بنسبة ‪ ٪62‬من أقرانه‪ ،‬مما أدى إلى تحويل ما يقدر ‪ Temenos‬في عام ‪ ،2022‬كان معدل رسملة البحث والتطوير الخاص بـ‬
‫بنحو ‪ 86‬مليون دوالر من تكاليف البحث والتطوير المشكوك فيها بالفعل إلى الميزانية العمومية‪ .‬بالمقارنة مع متوسطمعدل الرسملة‬
‫‪.‬لألقران‪ ،‬أدت رسملة تيمينوس إلى زيادة صناعية تقدر بنحو ‪ ٪29.5‬ألرباحها قبل الضرائب لعام ‪2022‬‬
‫بتمديد فترة االستهالك المسموح بها لـ "تكاليف تطوير البرمجيات المولدة داخلًيا" من ‪ Temenos 5‬في عام ‪ ،2023‬قامت شركة‬
‫سنوات إلى ‪ 7‬سنوات‪ ،‬مما يسمح لها باالعتراف بهذه التكاليف المرسملة بشكل أبطأ من ذي قبل‪ ،‬مع عدم اإلفصاح مطلًقا عن تأثيرها‬
‫بتعزيز أرباح عام ‪ 2023‬بشكل مصطنع بنسبة تصل إلى ‪ Temenos‬على بياناتها المالية‪ .‬نحن نقدر أن التغيير سيسمح لشركة‬
‫‪8.7٪.‬‬
‫ألقرب أقرانها عند ‪ 124‬يوًم ا‪ ،‬وهي عالمة كالسيكية )‪ (DSO‬أيًض ا ما يقرب من ضعف مبيعات األيام المتميزة ‪ Temenos‬تمتلك‬
‫‪.‬على سياسات التعرف على اإليرادات الصارمة وصعوبة تحصيل اإليرادات المبلغ عنها‬
‫تسليط ‪ Temenos‬على ما يبدو في تحقيق أعمال جديدة في أمريكا الشمالية‪ ،‬تواصل ‪DXC‬و ‪ Mbanq‬على الرغم من فشل شراكتي‬
‫الضوء على المنطقة باعتبارها سوقها االستراتيجي الرئيسي ومحرك النمو‪ ،‬وتتوقع أنها ستمثل قريًبا ما بين ‪ 45‬إلى ‪ %50‬من إيرادات‬
‫‪".‬رؤية القيادة" و"التكنولوجيا المتفوقة" ‪ Temenos.‬تراخيص البرمجيات بسبب‬
‫كشف بحثنا عن سلسلة من عمليات التنفيذ الفاشلة والعمالء المحبطين في أمريكا الشمالية‪ .‬قال أحد المسؤولين التنفيذيين السابقين في‬
‫تيمينوس‪" :‬كان العمالء يتساقطون من أسفل القمع‪ ،‬إذا جاز التعبير‪ ،‬بأسرع ما يمكن أن نمأله من األعلى" بسبب رفض الرئيس التنفيذي‬
‫"‪...‬أندريادس النظر في "أوجه القصور في المنتج‬
‫قال موظف سابق آخر في تيمينوس إن أندريادس كان يعرض في كثير من األحيان منتجات غير موجودة للعمالء المحتملين‪ ،‬ويخبرنا أن‬
‫"أندرياس أو (الرئيس التنفيذي السابق) ماكس سيذهبان إلى اجتماع ولم يكن لديهما كتيب عن الميزة غير الموجودة‪ ...‬ويجب أن تكون‬
‫على مكاتبهم عند وصولهم إلى العميل‪ .‬للحصول على ميزة لم يتم التفكير فيها‪ ،‬ولم يتم تشغيلها بواسطة المنتج‪ ،‬ولم يتم تشغيلها بواسطة‬
‫"‪...‬أي شخص عاقل‬
‫في سبتمبر ‪ .2018‬ورفعت دعوى ‪ Temenos‬ومقرها الواليات المتحدة عقًدا مع ‪ Unify Financial Credit Union‬وقعت‬
‫‪ Temenos‬بتهمة اإلغراء االحتيالي والتضليل الناتج عن اإلهمال بحلول ديسمبر ‪ ،2021‬مدعية أن ‪ Temenos‬قضائية ضد‬
‫اضطرت إلى العودة إلى نظامها القديم‪ .‬النظام ‪ Unify‬بالغت في بيع قدراتها السحابية وأن برامجها كانت غير مستقرة للغاية لدرجة أن‬
‫‪.‬بعد شهرين من البث المباشر‬
‫‪ Temenos‬في ديسمبر ‪ .2019‬ورفع دعوى قضائية ضد ‪ Temenos‬ومقره الواليات المتحدة مع ‪ First Fidelity‬وقع بنك‬
‫‪".‬وتأخيراتها ‪ Temenos‬بتهمة خرق العقد والتضليل االحتيالي في عام ‪ ،2022‬قائاًل إنه "سئم من أعذار‬
‫األساسي في عام ‪ ،2019‬لكنه تخلى عنه بعد ‪ Temenos‬ومقره الواليات المتحدة العمل مع برنامج ‪ Grasshopper Bank‬بدأ‬
‫أن إطالق بنكها الجديد بالكامل قد ‪ 4 Grasshopper‬سنوات بعد العديد من مشكالت التنفيذ‪ .‬أخبرنا مسؤول تنفيذي سابق في شركة‬
‫‪".‬والتي وصفوها بأنها "مؤلمة ‪ Temenos"،‬تم تأجيله "إلى حد كبير بسبب استراتيجية تنفيذ‬
‫في سبتمبر ‪ ،2020‬ويتم ‪ Temenos‬ومقره الواليات المتحدة مع البرنامج المصرفي األساسي لشركة ‪ Varo Bank‬تم إطالق بنك‬
‫السابقون التنفيذ بأنه ‪ Varo‬اإللكتروني‪ .‬وصف موظفو شركة ‪ Temenos‬تسليط الضوء عليه حالًيا باعتباره "قصة نجاح" على موقع‬
‫‪"".‬تجربة مروعة" تركتهم "ندوًبا إلى األبد‬
‫لم يكن هناك شيء خارج الصندوق‪ ،‬على الرغم من أن كل شيء تم بيعه" ‪ Varo:‬أخبرنا أحد المسؤولين التنفيذيين السابقين في شركة‬
‫تكبدت خسائر بالماليين بسبب ‪ Varo‬على أنه خارج الصندوق" وأنه "لم ينجح أي شيء حرفًيا"‪ .‬ادعى المسؤول التنفيذي أن شركة‬
‫‪ Temenos.‬مشاكل في تنفيذ‬
‫وهي محاولة للتنويع خارج نطاق البرامج ‪ "Temenos Infinity"،‬رسمًيا عن ‪ Temenos‬في عام ‪ ،2019‬أعلنت شركة‬
‫المصرفية األساسية من خالل تحويل عمليات استحواذ بقيمة ‪ 840‬مليون دوالر إلى قسم جديد يركز على منتجات "الخدمات المصرفية‬
‫‪ Infinity‬الترويج لـ ‪ Temenos‬الرقمية"‪ .‬في اآلونة األخيرة‪ ،‬في عرض يوم أسواق رأس المال لعام ‪ ،2023‬واصلت شركة‬
‫‪.‬باعتبارها دخواًل ناجًح ا إلى الخدمات المصرفية الرقمية التي تمثل سوًقا يمكن التعامل معه بحجم الخدمات المصرفية األساسية‬
‫الفاشلة‪ Infinity ،‬وجود العشرات من عمليات تنفيذ ‪ Temenos‬أكد المديرون التنفيذيون والشركاء والعمالء السابقون في شركة‬
‫القسم بأكمله بأنه "تدمير هائل في القيمة"‪ ،‬قائاًل إن "فريق ‪ Temenos‬حيث وصف أحد المسؤولين التنفيذيين السابقين في شركة‬
‫بأكمله المكون من ‪ 20‬أو ‪ 30‬مندوب مبيعات" قد تم "تعليبه"‪ .‬وأكد موظف سابق ثاٍن أن تيمينوس "أبعد الجميع تقريًبا في ‪Infinity‬‬
‫‪ [Infinity]".‬إنفينيتي" خالل العام الماضي‪ .‬وقال ثالث "لقد غادرت أفضل المواهب التي دعمت هذا المنتج‬
‫في أمريكا الشمالية فشلت ببساطة‪ Infinity ،‬أن الغالبية العظمى من تطبيقات ‪ Temenos‬أخبرنا مسؤول تنفيذي سابق في شركة‬
‫على[ قائاًل ‪" :‬دعونا نرى‪ ،‬في عام ‪ ،2021‬كان لدينا ‪ 19‬عمياًل في أمريكا الشمالية‪ ...‬كان من المفترض أن يبدأوا البث المباشر‬
‫‪.‬و‪ 2‬منهم تم إطالق ‪ ...19‬الكثير من عمليات إلغاء العمالء‪ ،‬والعمالء المحبطين والغاضبين ‪Infinity]،‬‬
‫‪ NDC Tech‬في الشرق األوسط وآسيا وأستراليا‪ .‬تحدثنا مع مدير سابق في شركة ‪ Infinity‬وجدنا أيًض ا أدلة على فشل مشاريع‬
‫في منطقة الشرق األوسط وشمال أفريقيا‪ .‬كما ‪ Temenos‬أحد شركاء التنفيذ لشركة ‪ Systems Limited)،‬المعروفة اآلن باسم(‬
‫خالل ‪ 3‬سنوات‪ ...‬ولكن ‪ Infinity‬على نطاق واسع‪ ،‬قائلين‪ ..." :‬تم انضمام أكثر من ‪ 20‬بنًكا إلى ‪ Infinity‬أكدوا أيًض ا فشل‬
‫"‪.‬بصراحة‪ ،‬من بين تلك البنوك التي يزيد عددها عن ‪ 20‬بنًكا‪ ،‬لم يتمكن سوى ‪ 2‬أو ‪ 3‬بنوك من البدء بالعمل‬
‫أن الرئيس التنفيذي أندرياديس اعترف في اجتماع مغلق ‪ Temenos‬أخيًر ا‪ ،‬أخبرنا أحد كبار المسؤولين التنفيذيين السابقين في شركة‬
‫خالل ‪ 3‬سنوات‪ Infinity ،‬قد فشلت‪ .‬قال المدير التنفيذي‪" :‬لقد قال [أندريديس] حرفًيا‪ ...‬لم نصل إلى أي شيء مع ‪ Infinity‬بأن‬
‫"‪.‬نحتاج فقط‪ ،‬كما تعلمون‪ ،‬إلى رميها في البحر [و] االنتهاء منها‬
‫عانت العديد من صفقات تيمينوس األكثر تسليط الضوء عليها في أوروبا وأستراليا من التأخير‪ ،‬وتجاوز التكاليف‪ ،‬والمشكالت التنظيمية‪،‬‬
‫‪.‬على الرغم من موقف تيمينوس للسوق بأن الصفقات حققت نجاحات كبيرة‬
‫وهو ‪ Temenos،‬على ما كان من المفترض أن يكون تحواًل مصرفًيا أساسًيا لمدة ‪ 5‬سنوات مع ‪ Nordea‬في عام ‪ ،2015‬وقعت‬
‫‪.‬حتى تلك اللحظة‪ .‬واليوم‪ ،‬توصف الصفقة بأنها قصة نجاح من قبل تيمينوس ‪ Temenos‬ما يمثل أكبر صفقة في تاريخ‬
‫ ص‬1:10 2024/‫‏‬2/‫‏‬20 ‫ أبحاث هيندنبورغ‬- ‫ مخالفات محاسبية كبيرة ومنتجات فاشلة وتحول وهمي‬:‫تيمينوس‬
‫ واستقال كبير مسؤولي الخدمات المصرفية في مايو‬،‫ أفادت التقارير أن بنك نورديا شهد تجاوزات في التكاليف وتأخيًر ا‬،‫ومع ذلك‬
‫ وصف مسؤول تنفيذي سابق في شركة‬.‫ وسط تقارير تفيد بتباطؤ التحول المصرفي األساسي للبنك‬2021 Temenos ‫التنفيذ بأنه‬
‫ "فظيع للغاية" وأكد أن تحول‬Nordea ‫ سنوات من انطالقة اللعبة‬9 ‫ال يزال مستمًرا بعد ما يقرب من‬.
‫ وبحسب ما‬.‫ مليون يورو‬500 ‫ اختار بنك أيرلندا شركة تيمينوس لتكون "في قلب" التحول التكنولوجي الذي تبلغ قيمته‬،2016 ‫في عام‬
‫ مما أدى إلى إخفاقات واسعة النطاق في تكنولوجيا المعلومات‬،‫ سنوات‬5 ‫ورد تضاعفت ميزانية المشروع ثالث مرات على مدى‬
‫ مليون دوالر‬139 ‫وانخفاض قيمة البنك بمقدار‬.
A former IT manager from the Bank of Ireland told us Temenos over-promised and under-
delivered, saying Temenos’ software “couldn’t handle” the bank’s needs. The former
manager said that the Temenos team was sometimes more focused on “just trying to sell
more software…”
In May 2018, Australia-based BNK Banking announced it had gone live with Temenos’
cloud banking software, but in July 2023, BNK was hit with 18 infringement notices from
Australia’s banking regulator due to flaws in Temenos’ software, per a BNK spokesperson
to the media.
BNK is now leaving Temenos mid-contract according to an Australian banking consultant
familiar with the company who told us, “Honestly, an Excel sheet would work better than
Temenos, and that’s being gentle. It is horrendous … they have cost [BNK] what we believe
to be over $100 million worth of lost opportunity.”
An Australian banking consultant that worked on Temenos implementations summed up
his view of Temenos as a “just a fantastic sales company and just a sales machine, but
honestly can’t back it up with anything… the most difficult vendor I’ve ever come across.
They promised us the world. It was all vaporware, basically…”
While institutions like Baillie Gifford, Fidelity and Fundsmith, have accumulated significant
positions, Temenos executives have dumped $1.1 billion in stock over the last 10 years,
per Bloomberg.
Temenos trades at a fundamental premium to its peers, representing significant
downside even if one were to ignore all the findings of our report. Consensus estimates
show it trades at a 76% earnings premium, a 41% EV/revenue premium, and a 59%
EV/EBITDA premium.
In its quest to seemingly do just about anything to prop up its earnings and boost its stock
price, Temenos finds itself on the classic accelerating accounting treadmill. We expect it
will soon run out of accounting tricks, new unwitting customers who believe its glossy
sales pitches, and new investors willing to buy as executives continue to sell.
Temenos says it “takes every step to be as open and forthcoming as possible with data”
and that it will fully investigate claims of “concerns or improper conduct.” With this
commitment to transparency in mind, we have included 36 questions at the end of this
report.
Initial Disclosure: After extensive research, we have taken a short position in shares of Temenos AG
(SWX:TEMN). This report represents our opinion, and we encourage every reader to do their own due
diligence. Please see our full disclaimer at the bottom of the report.
https://hindenburgresearch.com/temenos/ 4/75
Background & Basics: A $7.5 Billion Swiss-Listed Banking

Software Developer And Services Company
Temenos AG (SIX:TEMN) is a CHF 6.6 billion (US $7.6 billion) market cap Swiss-based banking
software company founded (https://www.temenos.com/about-us/) in 1993. It went public
(https://www.temenos.com/wp-content/uploads/2019/07/2001-annual-report-2002-
mar.pdf#page=2) on the SIX Swiss stock exchange in June 2001. It is led by CEO and former
Chairman Andreas Andreades, who initially joined the company as Chief Financial Officer in
1999 (https://www.temenos.com/people/andreas-andreades/).
Temenos offers a range of products and services, but is primarily focused

(https://www.temenos.com/news/2019/01/16/temenos-revolutionises-banking-software-with-
launch-of-two-new-products/) on its legacy core banking software, called “Temenos Transact,”
which serves (https://www.techtarget.com/whatis/definition/core-banking-system) as the back-
end ‘nervous system’ of a bank, underpinning massive volumes of basic transactions such as
deposits, withdrawals, transfers, and more complex functions.
Temenos’ other key offering, “Temenos Infinity,” is a newer suite of front-end, consumer-facing
digital banking solutions, which it says helps financial institutions “reimagine the way that they
engage with their customers.” [Pg. 1 (https://www.temenos.com/wp-
content/uploads/2019/08/products-infinity-brochure-2019-Aug-20.pdf)]
Most of Temenos’ primary end users are banks and financial institutions like PayPal
(https://www.temenos.com/news/2018/12/21/leading-us-company-selects-temenos-t24-core-
banking-in-the-cloud/), Nordea Bank (https://www.temenos.com/news/2015/09/11/nordea-
selects-temenos-for-its-new-core-banking-platform/), and Bank of Ireland
(https://www.appsruntheworld.com/customers-database/purchases/view/bank-of-ireland-
ireland-selects-temenos-t24-for-core-banking).
Temenos’ website (https://www.temenos.com/about-us/) says it is the 3rd largest software

company in Europe, serving 3,000 clients in 150 countries and enabling banking for over 1.2
billion people. On January 19th, Temenos reported
(https://www.temenos.com/news/2024/01/19/temenos-pre-announces-preliminary-q4-and-fy-
23-results/) preliminary 2023 revenue of $1 billion.
Bull Case: Sticky Core Banking Product, A Modernized Cloud-

Based Offering, Industry Leading R&D And Takeover Rumors
Over 3 decades of operations, Temenos has built a “sticky” client base due to how time-
consuming and complex it can be to transition between banking software providers. As a
result, many banks still use legacy systems that are 2 to 3 decades old, according to Deloitte
(https://www2.deloitte.com/us/en/pages/consulting/articles/core-banking-digital-
transformation-strategy.html#page=3).
One way Temenos benefits from these relationships is from maintenance fees associated with
its installed base of software, which amounted to $423.7 m
23-results/)illion as of the company’s preliminary 2023 report.
Beyond Temenos’ 30-year track record of sales with its legacy core banking software, it is
focused on the future with its investment (https://www.temenos.com/about-us/research-
development/?gad_source=1&gclid=Cj0KCQiAhc-sBhCEARIsAOVwHuRRCR-
6zmRKUxkfA3Q_ASkxPMZE0mKJU_x8NH94XrH0xo4NZdp5euwaAtB6EALw_wcB) of 20% of
revenue back into R&D. Temenos says this is “the highest rate in the industry” and double that
of its closest competitors, saying its R&D investment ensures that its software “never becomes
legacy (https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=26).”
Temenos’ forward-looking strategy aims to transition from on-premises core banking

installations to a modernized (https://www.temenos.com/platform/cloud-native-cloud-
agnostic/) cloud-based offering, a new SaaS
(https://www.temenos.com/news/2023/05/11/temenos-expands-relationship-with-aws-to-offer-
core-banking-as-saas/) (Software-as-a-Service) billing model, and a relatively new suite of digital
banking products that live under the “Infinity
launch-of-two-new-products/)” brand.
Over the last few years, Temenos’ “partner first approach (https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=15)” has resulted in several key
strategic partnerships that aim to push it into new markets. One such market is North America,
which accounted for 37% (https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=3) of 2022 software licensing revenue,
which Temenos aims to increase to 45-50% (https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=14) in the mid-term.
Temenos’ share price has declined by 35% over the last 5 years, partially due to revenue growth
flatlining since 2019, a significant earnings miss
(https://www.reuters.com/markets/europe/temenos-stock-plunges-by-fifth-after-profit-
warning-2022-10-14/) in 2022 and the recent regional banking crisis.[1]
(Source: Temenos Annual Reports, *2023 Numbers Are Preliminary)
Some analysts have labeled Temenos a value play, calling the reduced share price an
“unwarranted” sell-off while highlighting improving operating performance.[2]
Further, several private equity companies have been eyeing Temenos as a potential takeover
target over the last couple of years, according to Bloomberg
(https://www.bloomberg.com/news/articles/2023-06-09/nordic-capital-is-said-to-pursue-
temenos-as-other-suitors-drop). As of December 2023, a deal is now said to be off the table,
according to Swiss local media (https://www.fuw.ch/temenos-uebernahme-koennte-vorlaeufig-
gescheitert-sein-515126490663), but sustained buyout talk has supported investor interest in
the stock.
Fundamentals: Temenos Trades At A Rich Premium Relative To

Peers Based On Consensus Estimates
Temenos is the only company in its listed peer group with both negative revenue and EPS
growth in 2022, with declines of 2% and 34% respectively.[3] After growth headwinds, Temenos
will report 5% revenue growth in 2023, according to preliminary results
23-results/).
Despite this, Temenos trades at a significant premium to those same peers on consensus
estimates for the year ahead: a 76% premium on an earnings basis, a 59% premium on an
EV/EBITDA basis, and a 41% premium on an EV/revenue basis.
Its listed peer group comprises the “big 3”

(https://www.forbes.com/sites/ronshevlin/2021/11/22/can-banks-relationship-with-fis-fiserv-
and-jack-henry-be-
fixed/#:~:text=The%20%E2%80%9CBig%203%E2%80%9D%20in%20bank,elicits%20a%20range
%20of%20emotions.) core banking technology firms in the United States – Jack Henry, Fiserv,
and FIS, as well as Silverlake Axis, a core banking solutions provider to many of the largest
banks in Southeast Asia (https://www.silverlakeaxis.com/img/pdf/IDC_AP241406IB.pdf).
(Source: Bloomberg. *Consensus estimates from Bloomberg for the year ahead.)
Temenos commands this valuation premium even though the “big 3” dominate the US core
banking solutions market, the key pillar of Temenos’ future growth: Together, Jack Henry, Fiserv
and FIS make up almost 74% of the core banking solutions market share in the US, per S&P
Global market intelligence (https://www.spglobal.com/marketintelligence/en/news-
insights/latest-news-headlines/core-banking-innovation-empowers-smaller-banks-to-think-like-
fintechs-
68922887#:~:text=Historically%20the%20core%20banking%20market,%25%20and%20FIS%20h
olds%2016%25.).
In 2022, Temenos’ free cash flow (FCF) declined 46%, “largely due to the EBIT decline and
subscription transition as well as higher cash costs”, per Temenos’ press release
(https://www.temenos.com/news/2022/10/20/temenos-announces-q3-2022-results-
707x85nn/#:~:text=largely%20due%20to%20the%20EBIT%20decline%20and%20subscription%
20transition%20as%20well%20as%20higher%20cash%20costs) during the year. It currently
trades at a price/FCF multiple of 31x, even factoring the cash flow increase of 26% in 2023, per
preliminary numbers (https://www.temenos.com/news/2024/01/19/temenos-pre-announces-

preliminary-q4-and-fy-23-results/).[4]
Temenos net debt stood at $722 million at the end of Q3 2023 and disclosed its leverage ratio
(i.e. net debt to EBITDA) stood at 1.8x. [Pg. 18 (https://www.temenos.com/wp-
content/uploads/2023/10/Temenos-Q3-2023-Results-Presentation-d0173va20.pdf#page=18)]
[5]
Top Temenos Executives Have Cashed Out Over $1.1 Billion Over
The Last Decade
While Temenos’ shareholders include many renowned institutional managers such as Baillie
Gifford (https://www.bailliegifford.com/en/usa/professional-investor/literature-
library/funds/mutual-funds/baillie-gifford-funds-semi-annual-report-2023/#page=122),
Fundsmith (https://www.smithson.co.uk/factsheet/?r=1)and Fidelity
(https://www.morningstar.com/stocks/pinx/tmnsf/ownership), Temenos executives have
consistently sold stock, cashing out $1.1 billion over the last decade, per Bloomberg. By
contrast, Temenos executives have bought only $26 million of stock over the same period.
(Source: Bloomberg)
Part I: Hallmarks Of Heavily Manipulated

Earnings—Fake Deals, Rampant Pulling
Forward Of Renewals, Backdating Of Contracts
And Excessive R&D Capitalization
Former Regional Leader: “Whenever A Partner Announces, Or
Temenos Announce That A Partner Bought A License, All Of That
is Fake, In My Opinion. It’s Borderline Accounting Fraud, In My
Opinion.”
Former Senior Executive: “They Really Are The Masters Of Kind

Of Manipulating The Analysts, The Market, The Press, And They
Do A Lot Of These, Well I Call Them Shady Deals”
In our interviews with 25 former Temenos employees, we were told that the company regularly
manipulated earnings by entering into fake deals, pulling forward contract renewals and
backdating contracts, with one former executive telling us that Temenos’ leadership was
acutely focused on earnings and willing to “drive the stock price” in questionable ways, adding:
“…they’re very aggressive, and quite prepared to do sort of anything just to really
focus on the EPS. And the problem was that the EPS was their focus…”
The mechanics of some manipulations relate to Temenos’ unique revenue recognition policies
around licensing that it divides into 3 segments of (i) term/perpetual (ii) subscription and (iii)
SAAS.[6] Licensing sales make up over 44% of Temenos’ yearly revenue, per its preliminary
23-results/) 2023 results.
Other manipulations involve the use of partnerships to concoct revenue with almost zero
substance. A former regional leader from Temenos said that fake partner deals were common
practice:
“… they’re quite common. You just have to read the news. Whenever a partner
announces, or Temenos announce that a partner bought a license, all of that is fake,
in my opinion. It’s borderline accounting fraud, in my opinion.”
One former senior executive from Temenos told us that Temenos’ volatile share price is due to
CEO Andreas Andreades being a “master” at leaking information and manipulating analysts:
“That’s why the stock, one of the reasons the stock is so volatile, is because Andreas is
a master of leaking, you know, having his CFO leak this information to the press, ok,
so that’ll bump the stock. He’ll do a big trade, and then it levels out or, you know,
decreases. And so, they really are the masters of kind of manipulating the analysts,
the market, the press, and they do a lot of these, well I call them shady deals…”
In October 2021, Temenos Announced A Strategic

Partnership With Fintech Mbanq To “Accelerate BaaS
[Banking-As-A-Service] Adoption Across The US”
A Former Temenos Executive Told Us Mbanq Purchased $20

Million In Software And Services From Temenos As Part Of
The Deal, But That Temenos Funded The Purchase Of Its
Own Software Through An Undisclosed “Investment” Into
Mbanq
Former Temenos Executive: “The Convertible Note Was

Signed The Same Day, The Same Hour As The Deal Was
Signed For Mbanq”
The Executive Told Us, “If That Was In The US And That Was
With The SEC, Everyone Would Be Out”
In October 2021, Temenos announced a partnership

(https://www.temenos.com/news/2021/10/11/mbanq-signs-with-temenos-to-launch-worlds-
first-credit-union-as-a-service-and-accelerate-banking-as-a-service-in-us-market/) with Mbanq,
which it said was “one of the world’s fastest growing FinTechs,” whereby the two companies
would work together to deliver accelerated BaaS (Banking-as-a-Service) adoption across the US,
specifically for US-based credit unions.
According to a former Temenos executive familiar with the deal, it was agreed to months
earlier in June, but not announced at the time.[7] Mbanq committed to ~$20 million in software
licenses and maintenance contracts from Temenos, with the stated aim of reselling the
software to its US clients.
“In June of 2021, stretching for making the quarter target … they struck a deal where
Mbanq bought $10 million worth of license[s] from Temenos … and with the
commitment of 5 years of maintenance, so you basically got a $20 million dollar
commitment from Mbanq, and for that, they can use the Temenos software for their
growing customer base…”
Temenos’ press release (https://www.temenos.com/news/2021/10/11/mbanq-signs-with-

temenos-to-launch-worlds-first-credit-union-as-a-service-and-accelerate-banking-as-a-service-
in-us-market/) didn’t mention anything about an investment into Mbanq, but the former
Temenos executive said that, concurrent with the partnership announcement, Temenos
invested in Mbanq through a convertible note, effectively funding the purchase of its own
software.
“The convertible note was signed the same day, the same hour as the deal was signed
for Mbanq … because they [Mbanq] couldn’t have signed it if they didn’t have the
money.”
The former executive’s comments are supported by a footnote in Temenos’ 2021 semi-annual
report, where it disclosed the purchase of a $19.9 million convertible note, without naming the
party, in June 2021. [Pg. 186 (https://www.temenos.com/wp-content/uploads/2022/03/2021-
Annual-Report-t01ki2zy2.pdf#page=188)]
“In June 2021, the Group entered into an agreement to purchase a convertible note
for USD 19.9 million, with an option to convert into equity subject to certain
conditions.”
A separate former Temenos executive confirmed the circular nature of the Mbanq deal, calling
it just one of many of Temenos’ “games” to boost quarterly earnings.
“Temenos will play games. For example, Mbanq … they’ll say, ok [Mbanq], if you sign a
$10 million contract with Temenos so we can recognize in our quarterly earnings, we’ll
give you $15 million to invest in your company, right. So, they do a lot of these
artificial, just on the edge of, what could potentially be, yeah, just on the edge of the
line…”
Temenos disclosed that it purchased two “additional” convertible notes for $10 million and
$12.8 million, in June and September 2022, putting its total investment at $42.7m.[8] [Pg. 218
(https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=218)]
When we asked the former senior executive about these additional investments, we were told
that they were made to smooth things over with Mbanq, which was allegedly so frustrated with
Temenos’ inaction on the initial partnership that it threatened to sue:
“With Mbanq, again, they [Temenos] sold that, and then they did nothing with it. And
then Mbanq threatened to sue them, and then they [Temenos] came back and threw
more money at them…”
While both former Temenos executives said that Temenos purchased the convertible notes
from Mbanq, Temenos doesn’t actually name Mbanq in its filings.
However, litigation (https://www.slideshare.net/secret/It9dWjkOxG4ZJ3) between the founders

of Mbanq (formerly Finlink) corroborate that Temenos purchased at least two convertible notes
from Mbanq, referencing a first “2021 Temenos KISS” and a second KISS from Temenos in June
2022. [Pg. 23-24 (https://www.slideshare.net/secret/It9dWjkOxG4ZJ3)]
(Source: Email exhibit in lawsuit regarding Finlink, Inc. D/B/A/ Mbanq

referencing Temenos’ Mbanq investments [Pg. 24
(https://www.slideshare.net/secret/It9dWjkOxG4ZJ3)])
In October 2022, over a year after it announced the partnership with Mbanq, Temenos for the
first time disclosed an investment in Mbanq, per its Q3 company presentation
(https://www.temenos.com/wp-content/uploads/2022/10/Temenos-Q3-2022-Results-
Presentation-707x85nn.pdf#page=13). It chose not to specify the amount, the terms or even
when it had invested.
In short, evidence suggests Temenos had obfuscated its funding of and license sale to Mbanq
in a revenue roundtripping scheme. A former executive we spoke to was unequivocal in their
assessment of the Mbanq dealings:
“If that was in the US and that was with the SEC, everyone would be out.”
A Former Temenos Executive Called The Deal A

“Misrepresentation To The Market Of The Reality Of
Where The Revenue Was” And Said “I Would Question
Whether It Really Was A[n] Above The Board Transaction or
Not”
A Second Former Temenos Executive Confirmed That

Mbanq Still Isn’t Live With Temenos Software 2 Years After
The Deal Was Announced
In December 2022, over a year after the initial partnership announcement with Mbanq,
Temenos announced an expanded agreement and mentioned a “minority investment
(https://www.temenos.com/news/2022/12/01/temenos-expands-agreement-with-mbanq-to-
accelerate-banking-as-a-service-in-the-us/)” in Mbanq. The former executive we spoke with said
that this announcement misleadingly implied that the investment occurred around the time of
the announcement:
“… I think that then they got a lot of pressure on this relationship… so last year around
a bit in the fall, there was some type of press release saying, we’re now announcing
that we’re investing in Mbanq. It wasn’t then. They invested in them in June 2021.”
“I think it was a misrepresentation to the market of the reality of where the revenue
was… I would question whether it really was a[n] above the board transaction or not.
And if you put this up for debate with a panel of software experts, I think that they
would say that this is appalling. And I don’t know whether it’s in breach of any
regulatory or legal business practice. They obviously looked into it and thought it’s
okay, but in the US I don’t think that that would fly.”
Today, Mbanq is listed as a “Success Story (https://www.temenos.com/community/success-

stories/mbanq-success-story/)” on Temenos’ website and was included as a core element of the
North America strategy in Temenos’ 2022 annual report (https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=14) and 2023 capital markets day
presentation (https://www.temenos.com/wp-content/uploads/2023/02/2023-CMD-
MASTER_DECK_DESIGN_19-2-23-V8.pdf#page=61).
(Source: Temenos 2022 Annual Report [Pg. 14

summary/download_file/annual_report_2022.pdf#page=14)])
A different former Temenos executive told us they were unaware of Mbanq ever going live with
the software.
“… two years, coming up two years in. Two years in a month or two. They [Mbanq] still
are not live with the software… I never saw any effort to get to know the software, or
any drive or any urgency to deploy it, which makes you question what is happening.”
In February 2021, Temenos Announced A Partnership With

DXC Technology, Involving Around $8-10 Million Of
License Sales From Temenos, Per Former Executives
A Former DXC Executive Told Us The Deal Was Actually

Signed On The Last Day of 2020 And Was “Rushed Through”
“To Help Temenos Make Their Yearly Number”
In Absence Of A Deal, We Believe Temenos Would Have

Missed The Lowest Revenue Estimate For The Quarter
On February 17, 2021, just one day prior to its annual Capital Markets Day
(https://www.temenos.com/wp-content/uploads/2021/02/cmd-2021-presentation-
a22cx7l2r.pdf#page=2), Temenos announced
(https://www.temenos.com/news/2021/02/17/dxc-technology-signs-agreement-with-temenos-
enabling-its-large-bank-customers-to-reimagine-core-banking-transformation-br3a5rbkk/) a
“strategic agreement” with DXC Technology, a Virginia-based banking software company whose
products are used by many top US banks, including Wells Fargo
(https://discovery.hgdata.com/product/dxc-hogan-systems).
The partnership would allow DXC to offer Temenos’ software to its US customer base, a
significant milestone for Temenos’ “partner-first strategy
(https://www.temenos.com/news/2022/01/19/temenos-launches-impact-partner-program-to-
foster-open-collaboration-and-innovation-in-the-financial-services-industry/)” in North America.
As part of the deal, Temenos sold $8-10 million worth of licenses to DXC, per a former DXC
executive. A former Temenos executive also told us:
“He [a Temenos Executive] got them to sign up to buy [approximately] $10 million
worth of licenses. DXC thought they were reselling those to customers when in fact the
contract was structured for DXC to use and consume them internally”.
A former DXC executive told us that despite the announcement in February 2021, the deal was
signed earlier, on December 31st, 2020, and was simply a ruse to boost Temenos’ yearly
earnings in 2020.
“This was December 31st, we signed this contract, obviously we did that to help
Temenos make their yearly number, it was rushed through… They talked a good game
about it, but when January 1st hit, there was very little movement on that.”
Ostensibly thanks to this deal, Temenos met its estimates that quarter.
(Source: Bloomberg)
Without this deal, we believe Temenos would have reported results well below market
estimates for Q4 2020, a major “earnings miss”. The range of revenue estimates by sell side
analysts for the quarter was $273-$286 million, per Bloomberg.
Assuming $8 million was booked in Q4 2020, this would have meant that revenue for the
quarter would have been ~$269 million, below even the lowest sell side estimate of $273
million.
In February 2021, Temenos’ CEO Called The DXC Deal

“Game-Changing”. Temenos Said It Would “Accelerate Our
Penetration” With Large Banks In North America
In November 2021 and Again In June 2022, Temenos Re-

Assured Investors On Earnings Calls That Its DXC
Partnership Was Progressing Well
Reality Check: A Former DXC Executive Told Us The Entire

Deal Was Terminated In Early 2021, Resulting In An
Estimated $8 Million Write-Off For DXC
“They [Temenos] Left Us At The Altar … We Gave Them A

Bunch Of Money And Then They Literally Walked Away” –
Former DXC Executive
On February 18, 2021, one day after announcing the DXC deal, Temenos’ CEO described the
relationship with DXC as “game-changing” at its Capital Markets Day. [24:40
(https://www.temenos.com/insights/videos/2021-capital-markets-day-webcast/)] [9]
Responding to questions on the same day, the CFO added “I think this opportunity could be
huge”. [19:05 (https://www.temenos.com/insights/videos/2021-capital-markets-day-webcast/)]
[10]
In November 2021, Temenos’ then-CEO provided an update on the partnership, saying it was
going well:
“Then secondly, on the partnership with DXC, which continues to progress well. We are
engaging with a number of DXC’s customers on core banking replacement, and this is
supporting the acceleration of our Tier 1 and Tier 2 pipeline in the US, as I mentioned
before.” [Pg. 3 (https://www.slideshare.net/secret/xIT2KEtzOQXzsQ)]
In June 2022, Temenos doubled down (https://www.temenos.com/wp-

content/uploads/2022/07/TemenosGroup_20220721_1830_FullRWTranscript.pdf#page=24) on
its assurances around the DXC partnership, claiming deals were on the way:
“We continue discussion with DXC and it has not changed. We are engaged in quite a
few discussions…but I do want to see, a deal with DXC in the year. There are a few that
are on the way. So I’m hopeful we’ll get there.”
Stock market analysts have regularly asked Temenos for more detail on the DXC relationship,
clearly trying to assess whether the company has an opportunity to win mega deals from Tier 1
banks in the US to fulfil its mid-term targets for the US region.[11]
We interviewed a former DXC executive to determine how the partnership was going. They
confirmed that DXC cancelled the partnership roughly 1-1.5 years after signing due to a lack of
effort on Temenos’ part to make the deal successful:
“They got their $8 million or $10 million or whatever it was, and they ran away. And
[DXC] actually cancelled the contract about a year later, a year and a half maybe…
This isn’t a partnership. You used us for a license sale. You got to make your quarterly
number or your yearly number off us, but then you did nothing to propagate or help
us move in that direction…”
“I always use the phrase they left us at the altar, right? We were going to get married
together. We were going to go to the market. We gave them a bunch of money and
then they literally walked away… When I left, I left in [redacted], we had not sold a
single license… it was a write-off.”
A former Temenos executive described the deal as having “no strategic thought” that was just
about “selling and quick hits”:
“Of course, there’s no follow through. Nobody owns that DXC relationship. Nobody
created the strategy or an execution, a joint execution [to] go to market… [DXC] had to
write that off [their] books. Because, you know, this is just typical Temenos, oh we got
a deal, that money hit the bank, and there’s no strategic thought of, where could we
push this now, right? If we just created a team, we sold with DXC… There’s no long-
term thinking around how do we turn something into a strategy. It’s just about selling
and quick hits.”
In short, Temenos appears to have done very little to develop the relationship with DXC, and
then tried to convince investors that it was on solid footing. Temenos has never disclosed any
failure of this partnership to date.
4 Former Executives Described Temenos’ “Pulling

Forward” Of Contract Renewals To Boost Quarterly
Earnings At The Expense Of Future Revenue and Earnings
“If There’s A Renewal That They Can Pull Forward, They’re

Going To Go And Be Very Aggressive About Doing That, And
That’s What Happened” – Former Temenos Executive
Former Temenos senior executives and frontline salespeople described a practice of “pulling
forward” contract renewals with customers, sometimes at significant discounts. Such renewals
were often at the expense of long-term deal value in order to recognize upfront revenue.[12]
One former executive noted that this practice was primarily driven by Temenos’ current and
former CEOs, Andreas Andreades and Max Chuard:
“Here’s the thing, you know if Andreas and Max had actually made a call-out for a
quarter, and they’ve got an earnings call coming up, and they’re missing out on $10
million dollars, they’re going to do everything they can to try and get that $10 million
put it up front and if there’s a renewal that they can pull forward, they’re going to go
and be very aggressive about doing that, and that’s what happened.”
The executive cited Temenos’ record 2019 revenue, which he said was largely based on pull
forwards that disguised how new customer growth was slowing:
“When outside investors were looking at this, they thought ah, the licensing is growing
and we’re getting new customers. The reality is the new customer sales were coming
down… they basically forward mortgaged the baseline.”
According to the executive, the excessive pull forwards cannibalized future revenues.
“Revenue streams that they should have had in 2022, ‘23, ‘24 had already been spent”,
the former executive told us.
The former executive’s comments are partially corroborated by Temenos’ revenue trajectory,
which hit a historical high of $971.97 million in 2019, only to flatline in the years after, despite
other former Temenos employees confirming that pull forwards are still prevalent at Temenos.
(*Preliminary results. Source: Temenos Annual Reports)
We spoke with a former sales leader from Temenos who spent over a decade at the company.
They confirmed that Temenos pressured its sales teams to do early renewals at “too low a
value.”
“If you can control it, it can be a very, very good thing to do an early renewal to tie the
client closer to the company for a longer period of time. But if you give it away for a
very low price, if you are too much under pressure to get to your numbers—we saw
that in the Middle East and Africa for some period of time that, in my view, the
software, the contracts were renewed for too low a value…”
“The company does not need to recognize it up front, all of it. They could split it up
into some buckets and take it later, but the company decided to, for a long period of
time at least, to recognize everything immediately.”
Another former salesperson described the focus on underpriced renewals—an incentive that
wouldn’t exist if Temenos didn’t recognize significant upfront revenue under its Term and
Subscription models.
“I just thought, you know what, I just don’t trust this process… there’s going to
be some accounting scandal at some point…”
A former regional executive from Temenos told us that these accounting decisions are
controlled at the corporate level:
“The accounting practices are completely controlled at the corporate level. They
determine what gets booked and when. The regions don’t really have any say on what
those final numbers could or should be. If they want to bring something forward,
book early, they will.”
“Don’t Trust Any Of The Public Information”, “…They

Would Do Anything To Make The Quarter”: Former
Temenos Executives And Sales Leaders Told Us Backdating
Contracts To Manipulate Earnings Was Common Practice
“Legal Teams Would Give Power Of Attorney To The Sales

Teams To Backdate A Deal That Had Come In, You Know,
After The End Of The Quarter” – Former Senior Executive
During our interviews with former Temenos executives, we were told several times that
backdating contracts to boost earnings was standard practice at Temenos. One former
executive from Europe explained the practice in detail.
“… the standard practice, which was known completely and condoned by Andreas and
Max [current and former CEOs], but denied in public, was that the legal teams would
give power of attorney to the sales teams to backdate a deal that had come in, you
know, after the end of the quarter.”
“I mentioned they would do anything to make the quarter … what would happen, they
were sort of playing in a plausible deniability, with the finance and the legal teams…
So as soon as power of attorney contracts were given to salespeople in the field, you
knew something dodgy was going on.”
A former sales leader from Temenos went as far as to say that we shouldn’t trust any public-
facing information from Temenos.
“Don’t trust any of the public information… including the analyst call, okay? Its, again,
I’ve never seen any business driven like that… I’ve seen deals closed in January that
they were pulled back to the previous quarter, okay? They do that.”
Temenos Has Almost Double The Days Sales Outstanding

(DSO) Of Its Closest Peers At 124 Days, Suggesting Difficulty
Collecting On Reported Revenue
Temenos’ financial metrics support the claims by former employees.
Days sales outstanding (DSO (https://www.investopedia.com/terms/d/dso.asp)) is a well tracked

financial metric that shows the average number of days it takes for a company’s credit sales to
be converted into cash. A persistently high DSO can suggest that a company has aggressive
revenue recognition policies (https://medium.com/@jan_5421/how-to-identify-fraud-on-wall-
street-
840d3fc584a2#:~:text=more%20aggressive%20revenue%20recognition%20in%20addition%20t
o%20simply%20poor%20cash%20management).
Temenos has had a persistently high DSO, at 110+ days for the last 5 years.
(Source: Temenos Financial Statements 1

(https://www.temenos.com/wp-content/uploads/2023/10/Temenos-Q3-
2023-Results-Press-Release-d0173va20.pdf),2
(https://www.temenos.com/wp-content/uploads/2023/03/2022-Annual-
Report-t01ki2zg10.pdf#page=132),3 (https://www.temenos.com/wp-
content/uploads/2023/03/2022-Annual-Report-
t01ki2zg10.pdf#page=132),4 (https://www.temenos.com/wp-
7u42lsu22.pdf#page=43),5 (https://www.temenos.com/wp-
7u42lsu22.pdf#page=43),6 (https://www.temenos.com/wp-
content/uploads/2019/07/2018-annual-report-2019-mar-
26.pdf#page=41))
The DSO count is almost double its peers like Fiserv, which reports DSO in the 60s and almost 3
times Jack Henry which reports DSO in the 40s. [13]
Temenos recently said its DSO may increase further. In the Q3 2023 analyst call, the CFO
stated, “we expect DSOs to step up in Q4 with the subscription growth we are forecasting.” [Pg.
6 (https://www.temenos.com/wp-
content/uploads/2023/10/TemenosGroup_20231024_1830_FullRWTranscription.pdf)]
Temenos Claims That It Invests 20% Of Its Revenue Back

Into R&D, “More Than Twice The Level” Of Its Closest
Competitors
Former Executives Told Us The R&D Spend Was “Non-

Existent” And A “Mystery”
Former Executives Also Said Temenos Booked Customer

Implementation Costs As R&D, Resulting In Inflated Gross
Margins And Reported Earnings While Exaggerating
Product Investment
“All You’re Doing Is Just Taking Something That Was

Custom For A Customer And Saying It’s R&D. It’s Not. That’s
The Majority Of It” – Former Temenos Executive
While Temenos claims it has industry leading R&D investment, our conversations with 4 former
executives and employees indicate that it instead misclassifies customer implementation
expenses as R&D, thereby boosting its reported margins and earnings through more
accounting trickery.
Temenos states (https://www.temenos.com/about-us/research-development/) that it spends

20% of its revenue on R&D, or “more than twice the level” of its closest competitors. In 2022
alone, it invested a total of $279.8 million in R&D, “inclusive of overhead allocations.” [Pg. 46
(https://www.temenos.com/wp-content/uploads/2023/03/2022-Annual-Report-
t01ki2zg10.pdf#page=46)]
Temenos’ principal R&D centers (https://www.temenos.com/wp-

content/uploads/2023/03/2022-Annual-Report-t01ki2zg10.pdf#page=151) are in India, but its
primary Indian subsidiary reported (https://www.slideshare.net/secret/DKoZiVvYn69uRd) just
INR 6.33 billion (~$76 million USD) in total expenses in 2022, according to Indian corporate
records, raising the question of where the remainder of Temenos’ annual R&D budget was
spent. [Pg. 30 (https://www.slideshare.net/secret/DKoZiVvYn69uRd)][14]
Temenos’ website features a page dedicated to R&D, which offers some clues about what
Temenos counts as R&D. Specifically, Temenos suggests (https://www.temenos.com/about-
us/research-development/#:~:text=Temenos%20consistently%20spends,from%20our%20labs.)
that some of its client-facing work is counted as R&D, “as well as” innovations from its R&D
centers.
(Source: Temenos Website (https://www.temenos.com/about-

us/research-development/))
Temenos’ R&D page also states (https://www.temenos.com/about-us/research-

development/#:~:text=Temenos%20sticks%20to,technology%20and%20functionality.) that “all
developments are made available to all clients” and its “About Us
(https://www.temenos.com/about-us/)” page says that “every dollar we invest benefits all our
customers.”
Both statements indicate that Temenos may be justifying categorization of customer-specific

costs as general R&D.
A former Temenos senior executive claimed that custom development work for one client is
not the same thing as R&D, but that these types of customer-specific costs make up the
majority of Temenos’ claimed R&D spend:
“You ain’t improving the product. All you’re doing is just taking something that
was custom for a customer and saying it’s R&D. It’s not. That’s the majority of
it.”
We asked about Temenos’ cloud offering, and any associated R&D expenses:
“That R&D spend, they’re not really putting a whole lot of R&D spend in it. They’re just
kind of developing it and putting it out to the customer base, and that’s why people
are saying ‘this cloud stuff’s not ready’, ‘cause that R&D spend is non-existent.”
According to another former senior executive, the claimed 20% R&D investment was a mystery
even among Temenos’ leadership, who were largely unable to probe Temenos India’s activities
and expenses:
“It’s a mystery to many of us who were there as well. I have no idea what they base
those [R&D] numbers on, because, you know, it is not reflected in the front office of
what the client sees, at all… There’s zero interaction [with] India, Andreas completely
puts, I say bubble wraps, right? He puts a bubble wrap around India. Nobody is
allowed to interact, engage, criticize, suggest…”
Another former Temenos executive echoed this sentiment, saying “nobody really knew” what
the R&D money was being used for:
“I’ve never seen anybody with such a lack of business honesty… Whenever they say,
well we have 20% [R&D investment], nobody really knew, understood, right, what the
resources were doing. And if anybody good kind of questioned… you’d get in trouble,
okay? That was the story… Again, there’s a big black box in there, in India.”
Another executive echoed these comments, saying Temenos develops its products “on the
client’s dime” but then capitalizes the cost as R&D instead of expenses. The executive said this
go-to market strategy was driven by Temenos’ longtime former Chairman and now CEO,
Andreas Andreades.
“… Andreas is all about, ‘sell your way out of everything,’ right? Not innovation, not
product development, sell sell sell. Get a customer to pay for it. And then we’ll use
that money to go build whatever it is they want.”
One former executive said that Temenos lives in “escalation” mode due to the company failing
to invest even basic amounts into its products.
“There were some strategic investments that were needed for the products in the
Americas, North America … and it wasn’t a crazy amount at all, but unless you do
that, and fix certain things to make it available out of the box to every client, unless
we fix it, the next sale is your next escalation… So yes, they overpromise. It’s
because the product is not being completely finished…”
In 2022, Temenos’s R&D Capitalization Rate Was 62% Higher

Than Peers, Resulting In $86 Million In Excess Claimed R&D
Being Shifted To The Balance Sheet
Compared With The Peer Average, Temenos’ Excessive R&D

Capitalization Led To An Estimated 29.5% Boost To Its 2022 Pre-
Tax Profits
If Capitalization Was In Line With Peers, 2022 EBIT Margins

Would Have Fallen From 17.2% to 13.7% Under IFRS
When companies account for R&D costs, they may “capitalize

(https://www.investopedia.com/terms/c/capitalization.asp#:~:text=Error%20Code%3A%201000
13)-,What%20Is%20Capitalization%3F,the%20cost%20was%20originally%20incurred.)” costs by
recording them as a balance sheet asset and recognizing them over a period of time.
Temenos consistently capitalizes R&D costs to its balance sheet at a rate higher than its peers.
In 2020, 2021 and 2022, it capitalized approximately 8.6%, 9.36% and 9.09% of its total revenue,
respectively.
(Source: Temenos Annual Reports 1

(https://www.temenos.com/wp-
content/uploads/2019/07/2018-annual-report-2019-mar-
26.pdf#page=152), 2 (https://www.temenos.com/wp-
content/uploads/2020/03/2019-Annual-Report-2020-mar-
25.pdf#page=162), 3 (https://www.temenos.com/wp-
7u42lsu22.pdf#page=180), 4 (https://www.temenos.com/wp-
t01ki2zy2.pdf#page=65), 5 (https://www.temenos.com/wp-
t01ki2zg10.pdf#page=46))
On average, Temenos’ capitalization rate for R&D expenditures is ~62% higher than peers.
(Source: FY 2022 Annual Reports of Companies)
When compared with the peer average, Temenos’ aggressive capitalization rate led to a $33.1
million or 29.5% estimated boost to pre-tax profits in 2022 alone.[15] It would have also caused
reported IFRS EBIT margins to increase from 13.7% to 17.2%.[16]
While this is concerning on its own, we find it especially alarming considering that multiple
former Temenos executives expressed doubts about the validity of virtually all of Temenos’
claimed R&D investments, as outlined in the previous section.
In 2023, Temenos Extended Its Allowable Amortization

Period For “Internally Generated Software Development
Costs” From 5 Years To 7 Years, Allowing It To Recognize Its
Questionable R&D Costs Even More Slowly Than Before
If Fully Utilized, This Extended Amortization Period Would

Lead To An Estimated 8.7%, One-Off Boost To Reported 2023
Profits
Capitalizing normal operating costs and amortizing those costs too slowly is a textbook
mechanism (https://www.investopedia.com/articles/fundamental-analysis/financial-statement-
manipulation.asp#:~:text=Shifting%20Current%20Expenses,off%20impaired%20assets) for
manipulating financials.
Historically, Temenos’ capitalization policies allow it to amortize certain expenses over a 3-5
year period. However, effective January 1st, 2023, Temenos extended the top end of this
amortization window to 7 years, allowing it to spread out its already questionable R&D costs
over an even longer time period.
(Source: Temenos 2023 Semi Annual Report (https://www.temenos.com/wp-

content/uploads/2023/09/temenos-interim-report-2023-x30x401k8.pdf#page=23))
If Temenos utilized this expanded amortization schedule of 7 years, its 2023 profits could have
experienced an 8.7% one-off boost without any additional disclosure of the specific impact of
the change to shareholders. [17]
Temenos Has Also Boosted Its Reported Free Cash Flow

Through “Accrued Expense” Costs That Are 66% Higher
Than The Peer Group As A % Of Cost of Sales
Temenos has repeatedly used another financing tactic to boost its reported free cash flow,
which we suspect is unsustainable.
Accrued expenses (https://www.investopedia.com/terms/a/accruedexpense.asp), sometimes

called accrued liabilities, are costs that a business incurs that have not been paid. Usually these
occur due to terms with suppliers (e.g. supplier credit) or when a company has not received an
invoice. Accrued expenses may involve
(https://www.investopedia.com/terms/a/accruedexpense.asp#:~:text=An%20accrued%20expen
se%20can%20be,necessarily%20when%20they%20are%20paid.) some estimation from
management, given that invoices by suppliers are received at a future date and can differ.
In Temenos’ case, these unbilled costs are 66% higher (as % of cost of sales) than its peer
group, some of which are many times the size of Temenos and would normally be expected to
exert more favorable terms from suppliers.
(Source: 2022 Annual Reports, 1 (https://www.sec.gov/ix?

doc=/Archives/edgar/data/0000779152/000077915222000076/jkhy-20220630.htm),2
(https://www.sec.gov/ix?doc=/Archives/edgar/data/798354/000079835423000004/fisv-
20221231.htm),3 (https://www.silverlakeaxis.com/AR2022/images/SLAxis_AR2022.pdf),4
t01ki2zg10.pdf#page=132))
In 2022, Temenos reported (https://www.temenos.com/wp-content/uploads/2023/03/2022-

Annual-Report-t01ki2zg10.pdf#page=132) free cash flow of $192.9 million. If accrued expenses
were in a similar range to peers, it would mean a $42.5 million reduction in cash flow, or 22%
lower than the reported number in 2022. [18]
Part II – Temenos’ North American Strategy,

The Cornerstone Of Its Growth Story, Is
Littered With Failed Implementations
Temenos Highlights North America As A Key Growth
Driver, Projecting It Will Account For 45-50% Of Mid-Term
Software Revenue Due To “Superior Technology” And
“Leadership Vision”
In Part 1, we detailed how Temenos’ key partnerships with Mbanq and DXC, which were meant
to support a North American expansion, appear to have faltered completely or to simply be
shams
Despite these failures and misrepresentations, Temenos continues to double down on its
North American growth story.
In its 2023 investor day presentation, Temenos highlighted continued momentum in North
America, its key strategic market (https://www.temenos.com/wp-
content/uploads/2023/02/2023-CMD-MASTER_DECK_DESIGN_19-2-23-V8.pdf#page=20),
projecting that North America would account for 45-50% of mid-term licensing revenue.
(Source: Investor Presentation Pg. 91 (https://www.temenos.com/wp-

content/uploads/2023/02/2023-CMD-MASTER_DECK_DESIGN_19-2-23-V8.pdf#page=91))
More recently, in its Q3 2023 earnings call, Temenos highlighted that it had attracted a
seasoned core banking team, stepping-up its sales capabilities in North America with “superior
technology” and “leadership vision.” [Pg. 5 (https://www.temenos.com/wp-
content/uploads/2023/10/TemenosGroup_20231024_1830_FullRWTranscription.pdf#page=5)]
(Source: Temenos Q3 2023 Call Transcript (https://www.temenos.com/wp-

content/uploads/2023/10/TemenosGroup_20231024_1830_FullRWTranscription.pdf#page=5))
Despite Claims Of “Superior Technology” In North America, A

Former Senior Temenos Executive Told Us “Clients Were Falling
Out The Bottom Of The Funnel … As Fast As We Could Fill It At
The Top” Due To “Deficiencies In The Product”
While reflecting on the North American market, a former senior Temenos executive told us that
sales was the only thing Temenos excelled at in North America, but that Temenos was losing
customers just as fast due to deficiencies in its products:
“It became very apparent to me and I think several other leaders, however, that you
know, clients were falling out the bottom of the funnel, so to speak, as fast as we
could fill it at the top of the funnel with sales and new logos…”
“… I’ll tell you that over 18 months, there were… 12 senior leaders [in the US], who left
Temenos, and all of that was motivated by the fact that it became clear that as we sat
in these internal executive committee meetings, it became clear that Andreas was not
willing to look at the deficiencies in the product…”
Our research corroborates the former executive’s comments and shows that Temenos’ North
American strategy is littered with client lawsuits and failed implementations.
A Former Executive Told Us The CEO Would Often Pitch

Non-Existent Products To Prospective Customers
Former Executive: “Andreas Or Max Would Be Going Into A

Meeting And They Didn’t Have A Brochure For The Feature
That Didn’t Exist … And It Had To Be On Their Desk By The
Time They Got To The Client. For A Feature That Hasn’t
Been Thought Of, Not Run By Product, Not Run By Anybody
Sensible”
Throughout our more than two dozen interviews with former Temenos employees, including
senior executives, two recurring themes were (1) a lack of product investment and (2) the
overselling of product capabilities.
For example, one former senior leader from Temenos told us that the company was “single-
handedly” run by Andreas Andreades, who would often request brochures for new product
features that hadn’t yet been developed or even discussed:
“The company is single-handedly run by Andreas and it was Max before that, where
basically you sat back and waited for instructions… Andreas or Max would be going
into a meeting, and they didn’t have a brochure for the feature that didn’t exist. And
they wanted one and it had to be on their desk by the time they got to the client. For a
feature that hasn’t been thought of, not run by product, not run by anybody sensible.
But they were going in, the sales guy told him that’s what they were talking about and
he wanted a brochure…”
The former employee’s comments are supported by our research into several of Temenos’
North American deals.
US-Based Unify Financial Credit Union Signed On With

Temenos In September 2018
In December 2021, Unify Sued Temenos For Fraudulent

Inducement And Negligent Misrepresentation, Claiming
That Temenos Oversold Its Cloud Capabilities And That Its
System Was So Unstable That Unify Had To Revert To Its Old
System 2 Months After Going Live
In September 2018, Unify Financial, a credit union with over 260,000 members
(https://www.linkedin.com/company/unify-financial-credit-union/) and $4.3 billion in assets,
signed on with Temenos for various cloud-banking software applications. [Pg. 4
(https://www.slideshare.net/secret/CBadQZuzOi8hoW)]
According to Unify, it chose Temenos for its cloud-based banking applications, with Temenos’
representing that it “lived in the cloud and that it had customers that lived in the cloud.” [Pg. 3
After two successive delays, Unify finally went live in mid-November 2020 with its cloud
solutions for collections, loan origination and account origination. [Pg. 5
Unify’s lawsuit outlined multiple issues with the Temenos software:
(Source: Unify Complaint, Pg. 6

(https://www.slideshare.net/secret/CBadQZuzOi8hoW))
Unify eventually learned that Temenos didn’t have the cloud experience it claimed to have, per
the same complaint:
“When multiple issues did arise, because Temenos had no prior experience, it had no
explanation for what caused the problem or a solution to remedy the issue. As a
result, Temenos was unable [to] facilitate UNIFY’s successful migration to the
cloud.” [Pg. 4 (https://www.slideshare.net/secret/CBadQZuzOi8hoW)]
After being “plagued” with issues, Unify reverted to its legacy system in January 2021, followed
by the above-referenced December 2021 lawsuit against Temenos. [Pg. 8
The suit was withdrawn (https://www.slideshare.net/secret/180EcK2ZrI5zzU) by Unify in March

2022, indicating that the issue may have been settled out of court.
US-Based First Fidelity Bank Signed On With Temenos In

December 2019
In 2022, First Fidelity Sued Temenos For Breach Of Contract

And Fraudulent Misrepresentation, Saying it Was “Fed Up
With Temenos’ Excuses And Delays”
Effective December 31, 2019, First Fidelity Bank entered into an agreement with Temenos to
provide new loan origination platforms for its US banking clients. [Pg. 2
(https://www.slideshare.net/secret/NWrvTcM22QIpn6)]
One of the key requirements of the deal was that the Temenos-built system would integrate
with First Fidelity’s payment processing software, which Temenos initially said it could achieve
by Q3 2020, before delaying to a “go live” date to an unspecified date in early 2021. [Pg. 4
(https://www.slideshare.net/secret/NWrvTcM22QIpn6), 6
“By the time the project plan was agreed upon in October 2020, First Fidelity had paid
Temenos $571,803.23 in project and ‘support’ fees… Yet, as of October 2020, Temenos
had not completed construction of any processes or software attributable to such
‘support.’” [Pg. 7 (https://www.slideshare.net/secret/NWrvTcM22QIpn6)]
After experiencing additional delays and unexpected costs, First Fidelity cancelled the contract
with Temenos in February 2022, requesting an immediate return of $933,040. [Pg. 10
In May 2022, First Fidelity sued to recover this amount, alleging breach of contract and
fraudulent misrepresentation. [Pg. 12, 14
(https://www.slideshare.net/secret/NWrvTcM22QIpn6)] The bank said it had been “fed up with
Temenos’ excuses and delays”. [Pg. 8 (https://www.slideshare.net/secret/NWrvTcM22QIpn6)]
The dispute was eventually settled via a confidential agreement in October 2022
(https://www.slideshare.net/secret/3qmVDHM7aGZrNr).
US-Based Grasshopper Bank Went Live With Temenos’

Cloud-Based Core Software In 2019, With Temenos
Highlighting The Deal As Part Of Its “Proven Track Record
In Supporting US Banks Growth”
Grasshopper Executive: Grasshopper Had Numerous

Implementation Issues And Abandoned Temenos Just 4
Years After Launch
In June 2019, Temenos announced (https://www.temenos.com/news/2019/06/11/grasshopper-

bank-n-a-goes-live-with-temenos-t24-transact/) that US-based Grasshopper Bank had gone live
with Temenos’ “cloud-native, cloud-agnostic digital banking platform” in what appeared to be a
notable win for Temenos’ North American and SaaS focused strategy.
(Source: Temenos press release

(https://www.temenos.com/news/2019/06/11/grasshopper-
bank-n-a-goes-live-with-temenos-t24-transact/))
The press release quoted Temenos’ CEO at the time, Max Chuard:
“By running Temenos Transact on Temenos Cloud, Grasshopper will be perfectly

positioned to scale as it grows alongside New York’s booming technology ecosystem.”
While the deal appeared successful on the outside, a 2022 Forbes article
(https://www.forbes.com/sites/tomgroenfeldt/2022/03/03/grasshopper-digital-small-business-
bank-relaunches-with-new-ceo/?sh=78353cea7325) reported that Grasshopper had replaced
Temenos entirely, opting instead for a system from competitor FIS:
(Source: Forbes
(https://www.forbes.com/sites/tomgroenfeldt/2022/03/03/grasshopper-
digital-small-business-bank-relaunches-with-new-ceo/?
sh=78353cea7325))
To better understand why Temenos was abandoned, we contacted a former Grasshopper

senior executive who told us Temenos’ implementation strategy was largely to blame:
“When we opened on April 1st, we actually were not ready from a system standpoint,
we were six months away largely because of Temenos’ implementation strategy.”
The executive went on to describe Temenos’ failure to understand the US regulatory

environment:
“The process of mapping everything was excruciating, and we knew more about the
US regulations than they did… we had to constantly be teaching them.”
The executive alluded to a lack of support from Temenos, stating that many issues simply didn’t
get resolved in a timely fashion:
“I think at the end of the day, the final nail in the coffin was problem resolution. There
would be tickets that would be outstanding for months.”
US-Based Varo Bank Went Live With Temenos Cloud-Based

Core Banking In September 2020, And Is Currently
Highlighted As A “Success Story” On Temenos’ Website
With Varo’s CEO Calling Temenos A “Great Partner”
Former Varo Employee: “I Think It Would Be A Stretch To

Call It Successful By Any Means”
Former Varo Executive: “I Don’t Think Anyone Would Pick

Temenos If We Went Back In Time. I Mean We Lost Years Of
Our Lives To Temenos”
In September 2018, US FinTech company Varo Bank (then known as Varo Money) chose
Temenos (https://www.temenos.com/news/2018/09/12/varo-money-selects-temenos-digital-
banking-for-new-bank-in-the-us/) for cloud-based core banking, and 2 years later, Temenos
announced (https://www.temenos.com/news/2020/09/01/varo-first-consumer-fintech-granted-
national-bank-charter-in-the-us-goes-live-with-temenos-cloud-technology/) that Varo had “gone
live.”
Today, Varo is listed as a success story (https://www.temenos.com/community/success-

stories/varo-bank/) on Temenos’ website, which features a quote from Varo CEO Colin Walsh
saying Temenos has been a “great partner” for Varo.
(Source: Temenos Website

(https://www.temenos.com/community/success-stories/varo-bank/))
Varo Bank appeared to have been a notable win for Temenos’ North American cloud-solutions
approach, yet a former Temenos executive told us that Varo executives were privately “very
frustrated” with Temenos.
When asked about the implementation, the former Varo executive told us:
“I am very close and familiar with that experience, I think forever, forever scarred to
be honest… it was incredibly painful.”
The former executive described numerous issues with the Temenos implementation.
“For us, nothing was out of the box, even though everything was sold as out of the
box.”
“One of the issues was, we had to wait at least like 5 days to process an ACH
transaction when it takes typically 2 to 3 days… that was terribly problematic. They
couldn’t do returns properly… we took a bunch of losses against it, and I mean
millions of dollars in losses against it… From a card transaction processing, same
thing… we would go into, kind of the calls with Visa for the integration and it’s like
nothing worked. Literally nothing worked…”
“I can say with great certainty though, that if Varo was able to replay… Temenos
would not be our choice… but at this point it’s the devil we know… but I don’t think
anyone would pick Temenos if we went back in time. I mean we lost years of our lives
to Temenos.”
We also contacted a former Varo employee who said that Temenos “missed the mark” and
couldn’t deliver what it promised, calling the implementation a “horrible experience.”
“They just missed the mark. They just, they weren’t able to deliver. And it had some
impact to our customers, you know. The cost associated with downtime, [the] platform
is, for whatever reason, the transactions aren’t coming through. You know, it’s just, a
number of things… it’s just been, I would say, a horrible experience overall…”
The former Varo employee said that Varo is still using Temenos, but that it would be a “stretch”
to call the project a success:
“Yeah, we’re still using it, but I think it would be a stretch to call it successful, by any
means. I think the biggest challenge has been the fact that Temenos didn’t have any
experience with US-based banking financial regulations and the requirements of that.
And then the servicing of those requirements were just off the mark. [It] caused a lot of
pain in both the installation and ongoing maintenance… I think they’re just
inexperienced.”
The former employee said that Varo had an opportunity to extend its contract with Temenos,
but chose to reduce its contract length to keep its options open:
“There was an opportunity to extend the contract … I think it might have been 7 or
maybe even 10 years was a consideration for the extension, but I think they opted for
a shorter horizon to transition off of Temenos, and Varo is working on looking to do
that eventually.”
Based on former employee comments, Varo Bank serves as another example of Temenos over-
promising and under-delivering, especially when it comes to its cloud-based offering, the
linchpin of its growth story.
While Unify Financial, First Fidelity, Grasshopper Bank, and Varo Bank serve as examples of
Temenos struggles with its core offering in its key strategic North American market, our
research also found its digital front-end product has been a failure across regions.
Part III – Temenos Infinity: A Failed $840

Million Roll-Up Of Digital Banking Products
In 2019, Temenos Formally Announced “Temenos Infinity,”
An Attempt To Diversify Beyond Core Banking Software By
Rolling $840+ Million Of Acquisitions Into A Suite Of
Digital Banking Products
Temenos has been selling core banking software since the 1990s. While it has recently
attempted to shift this offering from on-premises installations to the cloud, core banking
remains the company’s bread and butter.[19]
However, in January 2019, Temenos announced

launch-of-two-new-products/) the launch of Temenos Infinity – an attempt to diversify away
from the “Transact” core banking product with a series of “Digital Front End” products
(https://www.temenos.com/news/2019/02/14/tcf-2019-digital-banking-reloaded/).
(Source: Temenos (https://www.temenos.com/wp-content/uploads/2019/07/products-infinity-

omnichannel-factsheet-2019-Jul-02.pdf))
A former Temenos executive explained the Infinity strategy to us:
“The whole thought was, okay, Transact is the back office, right? It is the core of
nervous center of a bank. It’s deposits. It’s loan origination. It’s payment processing.
So, it’s all of that very complex, technical back-end…
So, the holy grail for all of these companies… is what if we could take the power of all of that
data on the back-end in the core and use it to instruct the digital front-end experience to create
this highly customized, high-touch, very personalized experience for the end user?”
Temenos’ pursuit of this “holy grail” was fueled by a series of acquisitions to expand and
strengthen the Infinity product line.
Acquisition #1 – In 2015, Temenos acquired (https://www.temenos.com/wp-

content/uploads/2019/07/2015-annual-report-2016-mar-21.pdf#page=108) Akcelerant for
~$53.8 million, which would later be rebranded
(https://www.temenos.com/news/2016/02/16/akcelerant-is-now-temenos/) as part of
Temenos’ Infinity offering.

content/uploads/2019/07/2018-annual-report-2019-mar-26.pdf#page=155) Avoka for
$254 million, which it said would be “integrated with the Temenos Infinity product.”

content/uploads/2020/03/2019-Annual-Report-2020-mar-25.pdf#page=167) Kony for
$532.7 million, saying it would “further strengthen the Temenos Infinity product.”
Altogether, Temenos spent at least ~$840 million on acquisitions to diversify beyond core
banking and build Temenos Infinity, which was touted as a success in Temenos’ 2021 Capital
Markets Day presentation, claiming 650 customers for the new division.
(Source: 2021 Capital Markets Day Presentation

(https://www.temenos.com/wp-content/uploads/2021/02/cmd-2021-
presentation-a22cx7l2r.pdf#page=82))
Two years later, by Temenos’ 2023 Capital Markets Day presentation, it displayed a breakdown
of its SAM, or Serviceable Addressable Market, with Infinity representing the single largest
category.
(Source: Temenos 2022 Annual Report

summary/download_file/annual_report_2022.pdf#page=12))
Despite Temenos’ posturing on the success and multi-billion-dollar potential of Infinity,

commentary on the new division has been notably sparse from recent investor presentations.
The term “Infinity” showed up 23 times on Temenos’ 2020 (https://www.temenos.com/wp-
content/uploads/2020/02/cmd-presentation-2020-feb-13.pdf) Capital Markets Day
presentation, but just 5 times on its 2023 (https://www.temenos.com/wp-
content/uploads/2023/02/2023-CMD-MASTER_DECK_DESIGN_19-2-23-V8.pdf) Capital Markets
Day presentation.
Former Temenos Executives, Partners, And Customers

Confirmed Dozens Of Failed Infinity Implementations.
One Former Temenos Executive Called The Entire Division
A “Huge Destruction In Value”
Another Former Executive Said, “Let’s See, In 2021, We Had

19 Clients In North America… That Were Supposed To Go
Live [On Infinity], And 2 Of Those 19 Went Live… Tons Of
Client Cancellations, Frustrated, Angry Clients”
According To A Former Senior Executive, Temenos CEO

Andreades Admitted In A Closed Door Meeting That
Infinity Had Failed, “He [Andreades] Literally Said… We’ve
Gotten Nowhere With Infinity In 3 Years, We Need To Just,
You Know, Toss It Overboard [And] Be Done With It”
Our interviews with dozens of former Temenos executives, implementation partners, and
customers paint a picture of an expensive roll-up of digital banking products that Temenos has
simply failed to bring to market successfully.
When we asked a former Temenos executive about Infinity, we were told it had been
abandoned:
“It always amuses me that nobody really goes back, and the analysts don’t hold
Temenos accountable because there was so much talk about Infinity… they just simply
couldn’t do it. The last meeting that I sat in with Andreas, he literally said…we’ve
gotten nowhere with Infinity in 3 years, we need to just, you know, toss it overboard
[and] be done with it.”
“So, for the past 18 months almost 24 months, if anybody went back, they would see,
there’s very little talk, you don’t ever hear them talk about Infinity… all that, they’ve
kind of just abandoned it.”
Another former Temenos executive told us that Temenos’ Infinity products, specifically those
acquired from Kony, simply don’t work in the cloud alongside Temenos’ core software:
“They bought Kony to help get the customer base, and they just made a hash of that.
So, in terms of the US market, I think they couldn’t have done it worse … it wasn’t
accretive in any way, it didn’t buy the market share, it didn’t buy them a customer
base, it didn’t buy them anything. It bought them a significant headache, which they
still haven’t sorted out.”
“So, for instance, their front-end and back-end don’t run in the cloud together at all
and won’t for the foreseeable future, and they have wasted more money in the US”
The same executive said that Infinity, specifically the Kony product suite, didn’t receive
investment from Temenos after the acquisition:
“It hasn’t really received the investments since the acquisition, so, it was a great hope
and they had a whole Infinity team of 20 or 30 salespeople, and that got canned… The
writing was on the wall for it, and I think a huge destruction of value in terms of what
they paid for it…”
One former employee told us Temenos “axed pretty much everybody in Infinity” over the last
year, while another said, “the top talent that supported that product [Infinity] left.”
We asked several former executives why Infinity was struggling, and one individual with
familiarity of the North American market said they were unable to implement the technology
on most the deals that were sold:
“Let’s see, in 2021, we had 19 clients in North America… that were supposed to go
live [on Infinity], and 2 of those 19 went live. They could not, we could not get
Infinity implemented and working properly, so they’ve basically just kind of
abandoned it. You know, tons of client cancellations, frustrated, angry clients…”
We also spoke with a former manager from NDC Tech (now Systems Limited), one of Temenos’
implementation partners (https://www.temenos.com/community/partners/ndctech/?
gad_source=1&gclid=Cj0KCQiAj_CrBhD-ARIsAIiMxT-
9tVxrAuM0Ofu_IirGDQf6DLa6xy3t_4LYGUqbGBwKe9d98Bokn4kaAvHdEALw_wcB) in the Middle

East & Africa, who told us that Temenos’s Infinity strategy largely failed in the region due to
implementation challenges:
“Temenos acquired it [Kony], and then it spoiled it. Sorry to say that. Okay, so what
happened is that NDC started selling it in the MENA [Middle East and North Africa]
region … so around 20+ banks in 3 years onboarded with Infinity… but honestly,
out of those 20+ banks, only 2 or 3 banks were able to go live.”
In 2022, Pakistan’s largest bank, Habib Bank, was included as a “success story
(https://www.temenos.com/news/2022/02/17/pakistans-largest-bank-hbl-selects-
temenos-to-transform-its-banking-services/)” on the Temenos’ website for the core
banking platform.[20] We were told by former Temenos executives and
implementation partners that Habib Bank cancelled its Infinity project. Per a former
manager at Temenos:
“Habib Bank cancelled Infinity because of the effort that it would have taken for us to
deliver their requirements on top of Infinity. The CIO [Chief Information Officer] just
decided that for that amount of mandates, he can just extend on their current
solution and it’ll just cost them less,”
We have found no disclosure from Temenos about Habib’s Infinity project being cancelled.
We Found Other Failed Or Stalled Infinity Projects

Including A Leading Cambodian Bank, Pakistan’s Largest
Microfinance Bank And A Listed Australian Bank
During our conversations with Temenos clients they described more examples of failed Infinity
deals, including 3 below:
#1 Failed Infinity Deal: Hattha Bank
Hattha Bank describes itself as a one of the leading banks

(https://www.hatthabank.com/about/about-hattha-
bank#:~:text=Hattha%20Bank%20Plc.%20is%20one,officially%20from%2026th%20August%202
020.) in Cambodia. In 2021, Temenos announced
(https://www.temenos.com/news/2021/11/02/cambodian-bank-hattha-bank-selects-temenos-
cloud-native-digital-banking-platform-to-speed-up-lending-to-100000-smes/) a deal to
implement Infinity for Hattha Bank and boasted it would “enable the bank to quickly launch” its
products to small businesses. An executive at the bank told us despite only wanting a basic
internet banking solution, Infinity was littered with bugs and a poor user interface:
“Delay…again and again. Very frustrated. And they [Temenos Infinity] have many bugs.
“The UI, the user experience, and the user interface is, is very poor, actually”.
“We decided to terminate with them, I think, in October 2022.”
#2: Failed Infinity Deal: Khushhali Microfinance Bank
Khushhali Microfinance Bank is Pakistan’s largest microfinance bank with over 195 branches,
serving over 5 million customers (https://khushhalibank.com.pk/press-releases/khushhali-
microfinance-bank-celebrates-20-years-excellence-
microfinance#:~:text=Having%20serviced%20over%205%20million%20customers%20to%20dat
e) since its founding in 2000. [1 (https://www.khushhalibank.com.pk/sites/default/files/2022-
04/KMBL%20Annual-Report%202021.pdf#page=6), 2 (https://khushhalibank.com.pk/press-
releases/khushhali-microfinance-bank-celebrates-20-years-excellence-
microfinance#:~:text=Having%20serviced%20over%205%20million,and%20realize%20their%20
economic%20potential)] Khushhali was already a core banking
(https://khushhalibank.com.pk/press-releases/khushhali-microfinance-bank-overhaul-core-
banking-and-digital-platform-temenos-ndc) (Transact) customer and then signed a deal for
Temenos Infinity in October 2021, according to an update from Temenos’ implementation
partner (https://www.ndctech.net/newsroom/khushali-microfinance-bank-supercharges/) and
Temenos’ Twitter handle (https://twitter.com/Temenos/status/1473237850619535362).[21]
“Halfway through the implementation, we realized that the microservices is not

compatible with the earlier versions of Transact [Temenos Core banking software],
and it won’t work”, a former Temenos employee told us.”[22]
Two years later, the bank is still not live with Infinity:
“The project is on hold, you know. So the project is on hold. We don’t want to come to
the market with a compromised solution,” an executive at Khushhali told us.
#3: Failed Infinity Deal: MyState Bank
MyState Bank is a challenger bank headquartered in Tasmania with over 150,000 customers
(https://www.temenos.com/news/2021/11/04/mystate-bank-selects-temenos-for-its-digital-
banking-expansion-in-australia/). In November 2021, as part of its strategy to expand into the
Australian market, it selected Temenos “Infinity”, upgrading from an old Temenos platform, per
a Temenos’ announcement (https://www.temenos.com/news/2021/11/04/mystate-bank-
selects-temenos-for-its-digital-banking-expansion-in-australia/).
A current employee with the bank aware of the Infinity transformation project told us:
“Their UX [user experience] and core logic needed a lot of customization as their ‘Out
of the box’ product is built for American clients and it wouldn’t work directly for
Oceanic clients.”
“The contract was signed for the work to start last year and 3 months into it we’ve
ditched their product,” they told us.
While investors were sold on Infinity being an exciting new platform with the promise
launch-of-two-new-products/) of making Temenos a leader in digital banking software, the
actual execution seems to have fallen apart.
To date, Temenos has not disclosed any failed Infinity launches or impairments of the $840
million of acquired assets that live under the Infinity umbrella. Instead, Temenos seems to
hope that Infinity – perhaps the largest destruction of shareholder value in the company’s
history – will simply fade from shareholders’ minds.
Part IV – Many Of Temenos’ Most Highlighted

Deals In Europe And Australia Have Been
Plagued With Delays, Cost Overruns, And
Regulatory Issues
Europe has been a key growth driver and a core market for Temenos, currently accounting for
29% of total revenue, per Temenos’s 2022 annual report. [Pg. 6 (https://www.temenos.com/wp-
content/uploads/2023/03/2022-Annual-Report-t01ki2zg10.pdf#page=6)] Europe is where
Temenos has historically won its largest deals, including Nordea
(https://www.temenos.com/news/2015/09/11/nordea-selects-temenos-for-its-new-core-
banking-platform/) and Bank of Ireland (https://www.google.com/aclk?
sa=l&ai=DChcSEwi1_pO7o8aDAxV3kmgJHbo2A6QYABAAGgJ3Zg&ase=2&gclid=CjwKCAiA7t6sBh
AiEiwAsaieYj-
YOk14F4Xii5inhhvOEjsExzZU_uzjrOlLaxIBOOne13JH5LEE6BoCiEoQAvD_BwE&sig=AOD64_2MB5
yfzMCJkHdExwPsT93pXzh6LA&q&nis=4&adurl&ved=2ahUKEwiv_Y27o8aDAxWsywIHHZiKCogQ0
Qx6BAgNEAE).
(Source: Temenos Annual Report 2022 [Pg. 6 (https://www.temenos.com/wp-

content/uploads/2023/03/2022-Annual-Report-t01ki2zg10.pdf#page=6)])
Australia is a smaller but still significant region for Temenos, accounting for 3.2% of total
revenue in 2022, per its annual report. [Pg. 227 (https://www.temenos.com/wp-
content/uploads/2023/03/2022-Annual-Report-t01ki2zg10.pdf#page=227)]
Some of Temenos’ key deals in the region include Volt, Judo Bank and BNK.
Yet many of the highlighted deals in Europe and Australia, which together account for nearly a
third of Temenos’ revenue, have been plagued with delays, cost overruns, regulatory issues,
and outright failures.
In 2015, Nordea Signed On For A 5-Year On-Premises Core

Banking Transformation With Temenos, Representing The
Largest Deal In Temenos’ History
Today, The Deal Is Touted As A Success Story By Temenos
Reality: Nordea Reportedly Experienced Cost Overruns,

Delays, And According To A Former Temenos Executive
Who Called The Implementation “Absolutely Terrible,”
Still Hasn’t Gone Live Across All Modules And Regions
In 2015, Temenos won (https://www.temenos.com/news/2015/09/11/nordea-selects-temenos-

for-its-new-core-banking-platform/) an on-premises core banking transformation project with
Nordea, one of the largest banks
(https://www.worldbenchmarkingalliance.org/publication/financial-system/companies/nordea-
group/) in the Nordic region with 9.3 million private customers, whereby Temenos software
would handle loans, deposits, and transaction accounts.
As reported (https://www.forbes.com/sites/tomgroenfeldt/2015/09/28/nordea-replaces-
banking-core-with-temenos/?sh=198e506606b0) by Forbes at the time, the deal represented
the “biggest deal Temenos has ever had”, and would take four to five years to complete:
In 2019, FinTech Futures reported (https://www.fintechfutures.com/2019/10/nordea-writes-off-

millions-in-it-impairment-charges/) that costs for the Temenos-led project seemed to be
running much higher than anticipated:
“Since 2015, with the help of its main supplier Temenos which won its largest ever deal
with the bank, the firm is in the process of updating its old legacy systems from the
likes of Finastra and Tieto. Initially, Nordea said it would invest just over €1 billion in
its technology overhaul, but it seems the costs are climbing much higher.”
According to the article (https://www.fintechfutures.com/2019/10/nordea-writes-off-millions-in-

it-impairment-charges/), the cost overruns led Nordea to “introduce a new business plan” that
included a €735 million impairment to IT charges, although it was unclear how much of the
impairments were related to Nordea’s investments in Temenos software.
(Source: Fintech Futures

(https://www.fintechfutures.com/2019/10/nordea-writes-off-
millions-in-it-impairment-charges/))
In May 2021, nearly 6 years after Nordea kicked off its “four to five” year transformation, its
Chief Banking Officer resigned amidst industry reports
(https://www.fintechfutures.com/2021/05/nordea-core-banking-chief-joseph-edwin-leaves-
after-six-years/) that the bank’s core transformation project had slowed.
Today, Nordea is touted as a success story (https://www.temenos.com/insights/videos/nordea-

journey/) on Temenos’ website. A former senior executive from Temenos Europe told us that
the implementation still hasn’t been completed:
“They [Nordea] were supposed to be live about 2 years ago on all product lines, and
now they’re like live in one geography with like one product line, and they got there in
the end on one of these things, but the journey to get there has been absolutely
terrible.”
The former executives’ comments are supported by Temenos’ own disclosures from its Capital
Markets Day presentation which state that as of February 2023, nearly 8 years after the Nordea
deal was announced, it has only gone live with one module (deposits) in two out of its four
regions. [Pg. 71 (https://www.temenos.com/wp-content/uploads/2023/02/2023-CMD-
MASTER_DECK_DESIGN_19-2-23-V8.pdf#page=71)]
In 2016, Bank of Ireland Selected Temenos Core Banking To

Be “At The Heart” Of Its €500 Million Technological
Transformation
The Project Budget Reportedly Tripled Over 5 Years, Led To

Wide-Ranging IT Failures, A $139 Million Impairment For
The Bank And Shook Public Confidence In The Irish
Banking System
“I Mean, It Cost A Billion Euro To Make The Transition, And

Even Then, It Didn’t Work” – Former Temenos Executive
In 2016, Bank of Ireland selected (https://www.temenos.com/news/2016/10/03/bank-of-ireland-

selects-temenos-universalsuite/) Temenos for a core banking transformation which Temenos’
then-CEO claimed “further demonstrates that Temenos is the established technology partner
for the digitization of the financial services industry.”
The CEO of Bank of Ireland stated that Temenos had a “proven track record globally in
delivering best-practice core banking systems.”
Despite the favorable outlook, the project has since been plagued with cost overruns, delays,
business disruptions, and other operational challenges.
For example, the project was reportedly (https://www.fintechfutures.com/2021/05/bank-of-

ireland-coo-inside-every-bank-theres-a-tech-
company/#:~:text=%E2%80%98Project%20Omega%E2%80%99%2C%20its%20modernisation%2
0plan%2C%C2%A0kicked%20off%20in%202016.%20Originally%20planned%20to%20last%20fiv
e%20years%20and%20cost%20around%20%E2%82%AC500%20million%2C%20its%20budget%
20was%20extended%20to%20%E2%82%AC900%20million%20in%202018.) slated to cost €500
million, but by 2019, industry publications reported
(https://www.fintechfutures.com/2021/05/bank-of-ireland-coo-inside-every-bank-theres-a-tech-
company/) that the costs had risen to €900 million, and could go as high
(https://www.fintechfutures.com/2019/03/fears-over-bank-of-ireland-e2bn-tech-revamp-cost/)
as €2 billion.
(Source: FinTech Futures

(https://www.fintechfutures.com/2019/03/fears-over-bank-
of-ireland-e2bn-tech-revamp-cost/))
At the end of 2020, Bank of Ireland took a €139 million impairment on its software assets, citing
the immature capabilities of its “transformation investment asset product set.” [Pg. 281
(https://investorrelations.bankofireland.com/app/uploads/BOI-Annual-Report-
2020.pdf#page=281)]
As recently as August 2023, Bank of Ireland has experienced service disruptions

(https://www.rte.ie/news/business/2023/0815/1399929-boi-app-down/) and wide ranging IT
failures (https://www.rte.ie/news/business/2023/0819/1400505-boi-reputation/), according to
local publications.
(Source: RTE
(https://www.rte.ie/news/business/2023/0819/1400505-boi-
reputation/))
On August 17, 2023, the Irish Times reported

(https://www.irishtimes.com/business/2023/08/17/confidence-in-banking-eroded-by-bank-of-
ireland-glitches-says-consumer-advocate/) that Bank of Ireland’s “glitches” had shaken
confidence in the Irish banking system. In one highly publicized example, a technology glitch in
Bank of Ireland’s software led to free cash being available for customers, per the New York
Times. (https://www.nytimes.com/2023/08/16/world/europe/bank-ireland-technical-
glitch.html)
(Source: NY Times (https://www.nytimes.com/2023/08/16/world/europe/bank-

ireland-technical-glitch.html))
While we couldn’t confirm which of the bank’s many high profile technology issues were
directly related to Temenos’ software, a former technology head at the Bank of Ireland told us
that Temenos over-promised and under-delivered with respect to its core software, then
known (https://www.temenos.com/news/2020/03/06/t24-is-now-temenos-transact/) as T24,
saying that it simply “couldn’t handle” the bank’s needs:
“When you started to get into trying to actually make that work right, so you know,
multiple application servers at the T24 level… T24 couldn’t handle it.”
“They [Temenos] oscillated between just trying to sell more software, and, you know,
tell us that, oh yeah, this has been done somewhere else before. And then when you
poked at it a little bit, it was, it wasn’t quite what they had said.”
We also spoke with a former Temenos product director with knowledge of the deal, who said
that the technology simply didn’t work:
“So, Bank of Ireland is, it’s kind of known in the industry. It’s quoted by, you know, by
competitors, by banks and so on… I mean, it cost a billion euro to make the transition,
and even then, it didn’t work.”
In 2019, 3 Nordic Banks Chose Temenos For Cloud-Based

Core Banking, Only To Abandon The Project Less Than 2
Years Later, According To Industry Reporting
A Former Temenos Sales Leader Said The Deal Was

“Basically Terminated” Because Temenos’s
Implementation Partner “Didn’t Understand The Way Of
Banking In The Nordics”
In April 2019, Temenos announced (https://www.temenos.com/news/2019/04/03/temenos-

cognizant-power-digital-transformation-for-leading-banks/) a new core banking deal with three
Finnish banks – Savings Banks Group, Oma Savings Bank, and POP Bank Group.
According to Temenos, the “cloud-native” banking platform would yield “exceptional

operational efficiencies” and “dramatically reduced cost of deployment,” representing what
Temenos’ then-CEO called (https://www.temenos.com/news/2019/04/03/temenos-cognizant-
power-digital-transformation-for-leading-banks/) a “strategically important” deal for the region:
“This is a strategically important signing for Temenos as it highlights our continued

momentum in the Nordics market, where we support flagship banks such as Nordea
with their core transformation projects.”
According to Temenos, the software implementation would be carried out by a subsidiary of

Cognizant, one of Temenos’ longstanding (https://www.cognizant.com/us/en/about-
cognizant/partners/temenos) implementation partners. In February 2021, Cognizant
announced (https://cognizant.q4cdn.com/123993165/files/doc_financials/2020/q4/CORRECTED-
TRANSCRIPT_-Cognizant-Technology-Solutions-Corp.(CTSH-US),-Q4-2020-Earnings-Call,-3-
February-2021-5_00-PM-ET.pdf#page=3) it had exited the project, with its CEO telling
shareholders:
“Over time, both parties realized that the transformation aspect of the project, as
initially conceived, was unlikely to achieve our shared expectations.”
In June 2021, one of the banks, POP Bank Group, announced

(https://www.poppankki.fi/en/bonum-stockpressreleases/positiivinen-tulosvaroitus-pop-
pankki-ryhm%C3%A4-tarkentaa-vuoden-2020-tulosohjeistusta-pop-pankki-ryhm%C3%A4-ja-oy-
samlink-ab-purkavat-sopimuk-1624426570861) it wouldn’t be renewing its core banking

contract, initially signed in 2019, with the same Cognizant subsidiary. Cognizant sold
(https://www.kyndryl.com/us/en/about-us/news/2021/11/2021-11-18-kyndryl-plans-to-acquire-
finnish-financial-it-service) its Nordic subsidiary in November 2021.
According to a former Temenos executive, the implementation failed because Cognizant, a key
partner highlighted (https://www.temenos.com/wp-content/uploads/2022/09/Temenos-
Interim-Report-2022-0c2p2ni8i.pdf#page=7) in Temenos’ “Partner-First” strategy, didn’t
understand the basics of Nordic banking:
“In principle, the core banking system from Temenos was a very good fit, but one of
the main system integrators of Temenos, Cognizant… they didn’t understand the way
of banking in the Nordics. So without making a very long story, they have to explain
[to] them what is an IBAN [International Bank Account Number], things like that. So it
became very, very difficult and after more than a year, I think almost 18 months, the
project was basically terminated…”
In May 2018, Australia-Based BNK Banking Announced It

Had Gone Live With Temenos’ “Cloud Enabled” Core
Banking Software, With BNK’s CEO Noting There Had Been
“Some Disruption” To Customers During The Launch
The Disruptions Have Continued, With BNK Getting Hit

With 18 Infringement Notices From Australia’s Banking
Regulator In July 2023 Due To Flaws In Temenos Products,
Per Media Reports
BNK Is Now Leaving Temenos Mid-Contract According To

An Australian Banking Consultant Who Told Us, “Honestly,
An Excel Sheet Would Work Better Than Temenos, And
That’s Being Gentle. It Is Horrendous” And “They Have Cost
[BNK] What We Believe To Be Over $100 Million Worth Of
Lost Opportunity”
In May 2018, BNK Banking Corporation (formerly

(https://www.goldfieldsmoney.com.au/making-a-
change/#:~:text=From%20May%202021%2C%20we%20will,well%20as%20our%20mobile%20ap
p.) Goldfields Money) announced (https://media.abnnewswire.net/media/en/docs/ASX-GMY-

6A883994.pdf) that it had gone live on Temenos’ “cloud enabled” core banking software.
BNK’s CEO called the project a “significant investment,” but publicly noted that there were some
“disruptions” with the launch:
“Whilst most systems are performing as expected, there has been some disruption to
some of our customers and we apologise for this inconvenience.”
Disruptions appear to have continued for BNK, which was the subject of a “compliance
headache” in April 2023 that was reportedly due to flaws in the Temenos software, according to
industry publication Banking Day (https://www.bankingday.com/technical-error-creates-
compliance-headache-for-bnk):
“BNK Banking Corporation has confirmed it has been trying to resolve a ‘technical
error’ affecting its core banking platform since February… A spokesperson for the
company attributed the reporting failure to an issue with its Temenos banking
platform that is still not fixed.”
According to Banking Day (https://www.bankingday.com/article/bnk-hit-with-18-infringement-

notices-by-apra), 2 months later, BNK was hit with 18 infringement notices and a fine from
APRA, Australia’s banking regulator.
“Loss-making Perth bank BNK Banking Corporation has copped a six-figure penalty
from the prudential regulator after it was hit with 18 infringement notices for late
submission of financial data.”
“The March edition of APRA’s monthly banking statistics did not include any
disclosures regarding the deposits and loans of BNK because the bank’s Temenos
banking system was unable to generate the data for submission to the regulator.”
According to an Australian banking consultant familiar with the relationship, the Temenos
issues reported in the media were just the tip of the iceberg:
“They have cost [BNK] what we believe to be over $100 million worth of lost
opportunity because their system can’t do anything what we think it was supposed to
do. It can’t even calculate interest correctly. [BNK is] constantly having to change, or
recalculate and compensate customers for interest calculations…”
“Honestly, an Excel sheet would work better than Temenos, and that’s being gentle. It
is horrendous.”
The consultant confirmed that BNK is looking to transition away from Temenos due to these
mounting issues:
“[BNK] are looking to move away from them. What they [Temenos] say they’ll do, they
never do. I mean they give you promises and deadlines and they never deliver.”
The consultant told us that BNK has submitted complaints about Temenos to Australia’s
banking regulator, along with other Temenos customers in the region:
“[BNK is] not the only one who complained to our regulator about Temenos either.”
We interviewed a senior executive from another Australian bank, who asked that their bank not
be identified, who corroborated that many Australian banks have submitted complaints to
APRA regarding Temenos:
“APRA continually asks how Temenos is going, because a number of the Temenos
customers down here have either blamed or reported to the regulator that there’s
issues with Temenos…”
The senior executive said he was unaware of a single Australian bank that hasn’t had significant
operational issues with Temenos’ software:
“I don’t know of any banks in Australia that haven’t had the issues we’ve had… So, I
think my story is consistent with all Australian banks… I know Judo had the same
issues. I know Challenger Bank had the same issues. I think MyState in Tasmania on
Temenos had issues.”
“The CTOs of all these banks talk together and have a WhatsApp group where they,
you know, share their frustrations and challenges around it [Temenos].”
Volt Bank, Described As Australia’s First Cloud-Only Bank,

Went Live With Temenos Core In 2018
A Former Volt Executive Said Working With Temenos Was A

“Horrible Experience” And That Temenos’ Software
Couldn’t Process “10 Transactions A Day For People Buying
Coffee” Without Issues
“I’ve Never Seen Such An Overselling Of Capability…

Compared To What They Actually Could Deliver”
According to Fintech Futures (https://www.fintechfutures.com/2018/12/volt-prepares-for-

australian-open-banking-with-temenos/), Australia’s Volt Bank went live on Temenos’ cloud-
based core banking software in December 2018, with the deal being heralded as one of
Temenos’ most “notable deals” of the year by an industry publication. [Pg. 81
(https://www.slideshare.net/secret/4hxaNYSD4L4pTm)]
Temenos’ managing director said (https://www.fintechfutures.com/2018/12/volt-prepares-for-

australian-open-banking-with-temenos/) of the deal:
“By combining our Australian Model Bank functionality with the latest cloud
technology, we were able to rapidly deploy a next generation banking solution for Volt
Bank which will enable the bank to deliver experiences to challenge the status quo.”
A former executive from Volt told us that, despite the “greatest sales pitch” they had ever seen,
the Temenos implementation was a disaster that prevented Volt from scaling its business,
ultimately contributing to the bank’s failure:
“Nothing was getting resolved… We cannot get anything fixed, and you’re holding us
up because we need you to work before we can scale up and raise more capital, and
everything that you promised you’re going to do, you don’t. The mistakes that you
make, you just can’t make up.”
“We couldn’t even get 10 transactions a day for people buying coffee, that were going
through without timeouts and stuff.”
The executive told us Temenos overpromised:
“… it was a horrible experience. I’ve never seen such an overselling of capability…

compared to what they actually could deliver.”
The executive added that if APRA, Australia’s banking regulator, knew the full details of the
implementation, it would hinder Temenos’ ability to operate in the country:
“If I take half of the info that I have got to APRA, the banking regulator in Australia,
you guys can struggle to get a start here again.”
In 2022, Volt Bank ceased operations, per Reuters

(https://www.reuters.com/business/finance/australias-first-neobank-volt-shut-deposit-taking-
business-return-licence-2022-06-29/).
In May 2019, Australia-Based Judo Bank Went Live With

Temenos Core Banking And Temenos Infinity, Which
Temenos’ CEO Said Demonstrated Temenos’ “Momentum”
and “Local Expertise” In Australia
When We Asked About Judo’s Relationship With Temenos,

An Australian Banking Expert Told Us, “They’re Leaving
Temenos” Due To A Series Of Issues
“They Promised Us The World. It Was All Vaporware,

Basically”
Judo Bank Has Now Announced Projects With Two New

Banking Software Providers
In May 2019, Temenos announced (https://www.temenos.com/news/2019/05/09/sme-focused-

bank-goes-live-in-record-time-with-temenos/) that Australia-based Judo Bank had gone live with
Temenos cloud-based core banking, as well as Temenos Infinity. Temenos’ managing director
for the region said (https://www.temenos.com/news/2018/09/07/sme-challenger-bank-selects-
temenos-for-its-digital-banking/) the deal represented Temenos’ “momentum in the Australian
market where Temenos has a strong presence and local expertise.”
Temenos’ then-CEO echoed this bullish outlook, stating

(https://www.temenos.com/news/2019/05/09/sme-focused-bank-goes-live-in-record-time-with-
temenos/) that Temenos’ “transformational” technology would allow for “new business models”
in Australia.
As with many of Temenos’ other deal announcements, the relationship with Judo Bank appears
to have deteriorated rapidly after launch, based on our conversation with an Australian
banking executive familiar with the relationship:
“We’re close to Judo down here… so we know the issues with Judo, and you probably,
you may not have heard if you haven’t spoken direct – they’re leaving Temenos, and
they’re probably a quiet quitter of Temenos. They sort of need Temenos to help them a
little bit, but they’re also moving off there because they feel Temenos hasn’t been able
to support them.”
While we couldn’t verify this directly with Judo, we found multiple announcements in the media
that appear to corroborate Judo’s abandonment of Temenos in favor of other vendors.
For example, in January 2022, Confluent announced

(https://assets.confluent.io/m/5ec1e94f6ba99876/original/20220118-CS-Judo_Bank-EN.pdf?
session_ref=https://www.google.com/&_ga=2.162558458.793446368.1701958752-
1384717996.1701958752&_gl=1*104axtd*_ga*MTM4NDcxNzk5Ni4xNzAxOTU4NzUy*_ga_D2D3
EGKSGD*MTcwMTk1ODc1Mi4xLjAuMTcwMTk1ODc2Ny40NS4wLjA.) it was helping Judo “replace
its core banking system” and in September 2023, FinTech Future reported that Judo had “gone
live” with Backbase (https://www.fintechfutures.com/2023/09/aussie-sme-challenger-judo-
bank-taps-backbase-for-its-engagement-banking-platform/), a banking software provider.
Another Australian banking consultant we spoke with summed up his view of Temenos’
reputation in Australia:
“I’d probably describe Temenos as just a fantastic sales company and just a sales
machine, but honestly can’t back it up with anything… they simply don’t care about
their Australian customers really… the most difficult vendor I’ve ever come across.
They promised us the world. It was all vaporware, basically…”
Conclusion: Running Out Of Room On The

Accounting Treadmill
In its apparent quest to do just about anything to prop up its earnings and boost its stock price,
Temenos faces the classic accelerating accounting treadmill.
The company will eventually run out of accounting tricks, new unwitting customers who believe
its glossy sales pitches and new investors willing to buy as executives keep on selling to them.
As these factors converge, we expect Temenos’ results and guidance will eventually fall off a
cliff and lead to a substantial rerating.
36 Questions For Temenos’ Management
Temenos says in its financial statements that it takes “every step to be as open and
forthcoming as possible with data” and that “when we identify or learn of concerns or improper
conduct, we investigate them fully and take appropriate action to remediate any issues
identified”. [Pgs. 40 (https://www.temenos.com/wp-content/uploads/2023/03/2022-Annual-
Report-t01ki2zg10.pdf#page=40) & 54 (https://www.temenos.com/wp-
With this commitment to transparency in mind, the following 36 questions should be easy to
answer:
1. Litigation between the founders of Mbanq references a June 2021 “KISS” (convertible note)
to Temenos. Temenos first disclosed a partnership with Mbanq in October 2021, and first
disclosed making an investment in Mbanq in October 2022. Did Temenos make an
investment in Mbanq in June 2021? If so, why did it wait over a year to disclose it to
investors? If not, who was the counterparty for the $19.9 million convertible note
referenced in your financial statements from June 2021?
2. A former Temenos executive told us Mbanq agreed to purchase services from Temenos
on the same day in June 2021 that Temenos agreed to invest in Mbanq. Do you confirm
this? If not, on what dates did Temenos agree to invest in Mbanq, and on what dates did
Temenos sign agreements to sell services to Mbanq?
3. If Temenos made a deal with Mbanq as early as June 2021, why was it first announced 3
months later in October 2021?
4. A former Temenos executive told us they were unaware of Mbanq ever actually going live
with the software, even 2+ years since the initial signing. How many licenses have been
resold by Mbanq to date? How many new customers does that comprise and how much
revenue?
5. A former Temenos executive told us that Mbanq threatened to sue Temenos because
Temenos “did nothing with” the partnership. Did Mbanq ever threaten legal action against
Temenos?
6. A former Temenos executive told us that Temenos “threw more money” at Mbanq to
smooth things over after Mbanq threatened legal action. Did you make additional
investments into Mbanq after the initial June 2021 convertible note?
7. A former DXC executive told us its deal with Temenos was signed on the last day of 2020
and was “rushed through” to help Temenos hit its yearly revenue targets, which would
have allowed Temenos to avoid a major earnings miss. The deal was announced by
Temenos months later in February 2021. On what date was the deal signed? How much
revenue was booked as part of the DXC deal and in what quarter(s) was this revenue
booked?
8. In February 2021, Temenos’ CEO called the DXC deal “game-changing” and reassured
investors through June 2022 that the partnership was progressing well. A former DXC
executive told us that DXC had written off its licensing deal with Temenos and cancelled it
roughly 1-1.5 years later. Did DXC cancel, terminate, or otherwise abandon the
partnership? If so, when was Temenos made aware of it? Did DXC provide reasoning for
this? If so, what was it?
9. A former regional leader told us that whenever Temenos announces a partner has bought
a license, “all of that is fake, in my opinion. It’s borderline accounting fraud.” Which of
Temenos’ partners, other than Mbanq and DXC, have contributed to Temenos’ revenue?
Will Temenos disclose how much of its revenue came from partners, including Mbanq and
DXC, for FY17-FY23?
10. Former Temenos executives told us that the company regularly pulls forward contract
renewals, sometimes at a significantly discounted contract value. One executive cited
Temenos’ record 2019 revenue was largely based on pull-forwards. Will Temenos provide
the total amount of revenue from relicensing (renewals) across all its licenses from FY17-
FY23? (i.e. including deals renewed on an annual basis due to contract and non-core
licenses recognized upfront, unlike the calculation in the Q4 2022 results presentation)
11. Multiple former executives told us that backdating of contracts to boost quarterly
earnings was common practice at Temenos. For example, at one point, deals closed in
January were pulled back to the previous quarter, per one former sales leader. Has this
ever taken place?
12. A former executive told us legal teams gave Power of Attorney to sales teams to backdate
deals after quarter end. They said this was standard practice condoned by the current
CEO, Andreas Andreades, to provide plausible deniability to management about contract
backdating. Were there circumstances where sales individuals or those outside of the
executive suite were given Power of Attorney to sign, backdate or otherwise modify
contracts? If so, please describe those circumstances.
13. A former executive told us that customer implementation costs, including custom
development work for individual clients, was being booked as general R&D. Is this true?
How much of your total R&D spend is made up of custom development work for
individual customers – and what makes up the rest?
14. In January 2023, Temenos extended the maximum amortization period for “internally
generated software development costs” from 5 years to 7 years. Will Temenos disclose
the impact this has had on 2023 profits? Why hasn’t the company commented on this
change’s impact on profits thus far?
15. In 2022, Temenos’ accrued expenses stood at 33% of the cost of sales, helping to boost
Temenos’ reported cash flow. Why are Temenos’s accrued expenses as a percentage of
cost of sales significantly higher than even much larger peer companies?
16. A former executive told us that they were instructed to make brochures for product
features that did not exist. According to the executive, the current CEO Andreas
Andreades and former CEO Max Chuard allegedly sold these non-existent features to
customers in meetings. How do you respond?
17. In December 2021, Unify sued Temenos for fraudulent inducement and negligent
misrepresentation after a failed software implementation. Why didn’t Temenos disclose
any details of this litigation? What is the current status of Temenos’ relationship with Unify
as a customer?
18. In May 2022, First Fidelity sued Temenos for breach of contract and fraudulent
misrepresentation after a failed software implementation. Why didn’t Temenos disclose
any details of this litigation? What is the current status of Temenos’ relationship with First
Fidelity as a customer?
19. Grasshopper Bank went live with Temenos software in 2019. A former executive at
Grasshopper told us the bank abandoned Temenos, saying “the final nail in the coffin was
problem resolution” by Temenos. What is the current status of Temenos’ relationship with
Grasshopper as a customer? If they are not still a customer, what led to the failure of the
relationship?
20. Temenos has spent over $840 million on acquisitions related to its digital front-end
software “Infinity”. Despite the large investment, a former executive told us that Temenos
has “axed pretty much everybody” in Infinity over the last few years. How many people
have been laid off from Infinity-focused teams since Infinity launched in 2019? How many
are left?
21. A former executive told us that in 2021, Temenos had 19 clients in North America for
Infinity and only 2 of those went live. How many Infinity implementations were slated for
2021 in North America, and of those, how many were cancelled and how many went live?
22. A former manager from Temenos’ key implementation partner in the Middle East, Africa
and Asia, NDC Tech, told us that around 20 banks had been signed up for Infinity over a 3-
year period, yet only 2 or 3 banks were able to go live. Can Temenos confirm how many
customers signed on for Infinity implementations through NDC Tech, and of those, how
many went live and how many were cancelled?
23. In 2022, Habib Bank was highlighted as a success story for core banking by Temenos.
However, a former Temenos executive and implementation partner told us that Habib
Bank cancelled its Infinity implementation. What is the status of Habib Bank’s Infinity
implementation?
24. In 2021, Temenos signed an Infinity deal with Cambodia-based Hattha Bank. Despite only
wanting a basic internet banking solution, the bank experienced multiple delays with its
Infinity implementation and ultimately cancelled the implementation, according to an
executive from the bank. What is the status of Hattha Bank’s Infinity implementation?
25. In October 2021, Temenos signed an Infinity deal with Khushhali Microfinance Bank,
Pakistan’s largest microfinance bank. An executive at Khushhali told us the project is on
hold and that the bank didn’t want to come to market with a “compromised solution”.
What is the status of Khushhali Microfinance Bank’s Infinity implementation?
26. In November 2021, Temenos signed an Infinity deal with MyState Bank, a challenger bank
headquartered in Tasmania. A current MyState Bank employee told us that 3 months into
the project, the company “ditched their product”. What is the status of MyState Bank’s
Infinity implementation?
27. According to a former senior Temenos executive, CEO Andreas Andreades admitted in a
closed door meeting that Infinity had failed, saying “we’ve gotten nowhere with Infinity in
3 years, we need to just, you know, toss it overboard [and] be done with it.” Did Andreas
Andreades ever say this or something like this to other senior executives at Temenos? Is it
appropriate for a CEO to say something like this to insiders, who are actively selling stock,
while regular shareholders are left in the dark?
28. Temenos carried $1.05 billion of goodwill on its balance sheet as of December 2022. After
$840 million in Infinity-related acquisitions and the subsequent failure of the Infinity
division, which one executive called a “huge destruction in value”, will Temenos impair any
of the goodwill that sits on its balance sheet? If so, when and by how much?
29. In 2016, the Bank of Ireland selected Temenos for a core banking transformation. A
former executive told us, “it cost a billion euro to make the transition and even then, it
didn’t work.” Since then, the bank has had numerous technology issues and glitches,
including the bank giving free cash to customers in one incident in 2023. Was Temenos in
any way connected to, or responsible for, these technology issues? Did Bank of Ireland
ever contact Temenos with concerns related to any of these issues or glitches?
30. In 2019, Temenos announced a core banking deal with 3 Nordic Banks – Savings Bank,
OMA Savings Bank, and POP Bank. A former sales leader said the deal was “basically
terminated” because the implementation partner didn’t understand banking in the
Nordics. What is the status of this deal?
31. According to a senior executive at an Australian Bank, Temenos customers have reported
issues with Temenos to the Australian Banking Regulator (APRA). What is the nature of
these complaints? “What correspondence has Temenos had with the APRA related to
complaints from customers?”
32. BNK Banking Corporation was hit with 18 infringement notices from Australia’s banking
regulator in July 2023 due to flaws in Temenos products around the disclosure of financial
data, per media reports. Why was Temenos’ software unable to meet regulatory
requirements or standards in Australia? In how many other instances has this occurred?
33. A consultant who was familiar with BNK Banking Corporation told us, “honestly an Excel
spreadsheet would work better than Temenos” and that BNK is “looking to move away
from” Temenos. What is the status of the implementation with BNK Banking Corporation?
Are you aware of any issues with BNK that could result in them seeking a new banking
software provider?
34. In May 2019, Australia-based Judo Bank went live with Temenos Core Banking and
Temenos Infinity. A banking expert familiar with the company told us “they’re leaving
Temenos” due to a series of issues. What is the status of Judo Bank’s relationship with
Temenos? What issues have they raised with Temenos?
35. An executive at the now shuttered Volt Bank in Australia told us that due to Temenos’
software, the bank at times couldn’t even do 10 transactions a day for people buying
coffee without time outs and delays. Is this an accurate description of the challenges
faced by Volt Bank? Were you ever made aware of these challenges?
36. Our 4-month investigation, spanning interviews with 25 former employees, including
senior leaders at the company, reveals major accounting irregularities and earnings
manipulation at Temenos. Considering Temenos claims to take “every step to be as open
and forthcoming as possible” and investigate “improper conduct”, how and in what way
will the company address our findings?
Appendix A: Temenos Executives Have Sold Into The

Company’s Own Debt-Fueled Buybacks
Insider selling has also coincided with Temenos’ buybacks. In the 3 major buybacks in 2017,
2018/2019 and 2021, Temenos bought back ~$554 million of its shares, while insiders sold $702
million during those years, according to our analysis of Bloomberg data.
Buyback Year
2017 (https://www.temenos.com/about-us/investor-relations/share-buyback/#:~:text=2017%20Share%
2018-2019 (https://www.temenos.com/about-us/investor-relations/share-buyback/#:~:text=2018/2019
2021 (https://www.temenos.com/about-us/investor-relations/share-
buyback/#:~:text=This%20share%20buyback%20programme%2C%20initiated%20on%20February,to%
(Source: Hindenburg, Bloomberg)
Traditionally, bought back shares are retired, increasing the stake of existing holders
(https://www.santander.com/en/stories/share-
buyback#:~:text=A%20share%20buyback%20is%20when,higher%20return%20on%20future%2
0dividends.). Instead, Temenos has sometimes given the stock right to back to employees as
part of its compensation plan. [Pg. 259 (https://www.temenos.com/wp-
content/uploads/2023/03/2022-Annual-Report-t01ki2zg10.pdf#page=259)] In 2018, for
example, Temenos bought back 1,342,653 shares (~2% of its market cap) through its buyback.
It then granted 98% of that amount back to management for “shared-based payment
transactions”. [Pg. 173 (https://www.temenos.com/wp-content/uploads/2019/07/2018-annual-
report-2019-mar-26.pdf#page=173)]
In short, not only have insiders cashed out a gargantuan amount of stock, but Temenos has
used company funds to support these sales, and then has created a seemingly circular loop,
whereby stock buybacks support further share allotment to employees.
Disclosure: We Are Short Shares of Temenos AG

(SWX: TEMN)
Legal Disclaimer
Use of Hindenburg Research’s research is at your own risk. In no event should Hindenburg
Research or any affiliated party be liable for any direct or indirect trading losses caused by any
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update or supplement this report or any of the information contained herein.
[1] In June 2023, activist Temenos shareholder Petrus Advisers wrote that Temenos’s share
price decline was partially due to the “SVB/Credit Suisse-driven selloff”. [Pg. 1
(https://petrusadvisers.com/media/20230605_letter_to_chairman_english_vf.pdf)]
[2] In July 2022, Kepler Cheuvreux (https://www.keplercheuvreux.com/en/) – a European

brokerage firm – called Temenos’ stock “rather cheap
(https://petrusadvisers.com/media/20221006_temenos_discussion_materials_vf.pdf#page=10).”
[3] Uses IFRS revenue and IFRS EPS, per the 2022 Annual Report
t01ki2zg10.pdf#page=130). The 4 peer companies are Jack Henry, Fiserv, Silverlake Axis and
Fidelity National Information Services (FIS). These are listed companies that Temenos competes
with in core banking solutions and other software solutions, with multiple market analysts
using these peers for comparison.
[4] Cash flow for 2023 was $242.6 million per Temenos 2023 preliminary release
23-
results/#:~:text=Q4%2D23%20Free%20Cash%20Flow%20of%20USD113.6m%2C%20up%207%2
5%20y%2Do%2Dy%2C%20FY%2D23%20Free%20Cash%20Flow%20of%20USD242.6m%2C%20u
p%2026%25%20y%2Do%2Dy).
[5] This calculation uses non-IFRS numbers. The leverage ratio would be even higher if
calculating using IFRS numbers. For example, in 2022, using IFRS numbers the leverage ratio
would have been ~2.4x versus 2.0x under the non-IFRS metric.
[6] Temenos’ 3 licensing models are disclosed in its 2022 presentation

(https://www.temenos.com/wp-content/uploads/2022/02/cmd-2022-presentation-
wojwg8imr.pdf#page=111). For “Term/Perpetual” licensing, Temenos books revenue upfront
when the deal is signed. “Subscription” licensing is unusual in that revenue is booked up front
even though cash is received from the customer over the lifecycle of the deal. “SAAS” licensing
consists of customers being invoiced annually with Temenos booking revenue over the period,
per its 2022 annual report. [Pg. 208 (https://www.temenos.com/wp-
[7] A 2023 lawsuit in the US involving the founders of Mbanq also highlights the existence of
this “June 2021 KISS” (a type of convertible note). [Pg. 22
(https://www.slideshare.net/secret/It9dWjkOxG4ZJ3)].
[8] Temenos has since marked up its value to $53.1m (https://www.temenos.com/wp-

content/uploads/2023/09/temenos-interim-report-2023-x30x401k8.pdf#page=26) based on
unpaid interest and a fair value adjustment. [Pg. 218 (https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=218), Pg. 26
(https://www.temenos.com/wp-content/uploads/2023/09/temenos-interim-report-2023-
x30x401k8.pdf#page=26)]
[9] On “2021 Capital Markets Day Webcast” webpage

(https://www.temenos.com/insights/videos/2021-capital-markets-day-webcast/), navigate to
“Strategy and Vision” tab to view embedded video.
[10] On “2021 Capital Markets Day Webcast” webpage

(https://www.temenos.com/insights/videos/2021-capital-markets-day-webcast/), navigate to
“Q&A” tab to view embedded video.
[11] For example, on the Q3 2021 (https://www.slideshare.net/secret/v4x0WMDAQOeuJc)

earnings call, a Deutsche Bank analyst asked for “granular detail” on the DXC relationship, and
in Q2 2022 (https://www.slideshare.net/secret/gMSlUrt27425cO)the Stifel analyst asked for
color on deal momentum with DXC. [Pgs. 15
(https://www.slideshare.net/secret/v4x0WMDAQOeuJc), 9
(https://www.slideshare.net/secret/gMSlUrt27425cO)]
[12] These would fall under either the Term or Subscription model. Temenos discloses
(https://www.temenos.com/wp-content/uploads/2023/02/Temenos-Q4-2022-Results-
Presentation-2h9e96fri.pdf#page=29) how much of its software licensing revenue comes from
new customers versus contract renewals from old customers. However, this calculation
excludes deals renewed on an annual basis due to contract and non-core licenses recognized
upfront under IFRS 15 accounting. This breakdown is a key metric asked for by investors and
sell-side analysts who aim to better understand new business growth.
[13] Almost paradoxically, Temenos also has higher deferred revenue (cash collected but not
yet earned) relative to peers. With an inability to collect on reported revenue coupled with high
deferred revenue, the company’s reported cash flow is likely stretched near its accounting
breaking point.
[14] Note that India’s financial year ends March 2022 vs. Temenos’ Swiss parent which reports
December 2022 end. Given that Temenos also spent an equivalent $278 million on R&D in
2021, any difference in the R&D expenses due to non-overlapping fiscal periods are expected
to be minor.
[15] Temenos reported $949.628 million in revenue and $145.963 million in pre-tax profit for
2022. [Pg. 195 (https://www.temenos.com/online-
summary/download_file/annual_report_2022.pdf#page=195)] Temenos capitalized $86.3 m
summary/download_file/annual_report_2022.pdf#page=132)illion, or 9.1% of revenue, in R&D
costs for 2022, but a peer-average capitalization rate of 5.6% would’ve led to just $53 million
being capitalized. The difference of $33.1 million led to an estimated 29.5% boost to Temenos’
pre-tax profits for 2022.
[16] Temenos 2022 IFRS EBIT was $163.4 million, reduced by $33.1 million (as above) = $130.3
million. Revenue for 2022 $949.6 million.
[17] Assuming the amortization charge increased by 20% (i.e. from 5 years to 7 years for all
products) in the previous financial year,this would have meant profit before tax would have
increased by 8.7%, providing a rough estimate of the future accounting benefit to the change.
Depreciation charge for internally-generated software development was $63.411 million in
2022 (https://www.temenos.com/wp-content/uploads/2023/03/2022-Annual-Report-
t01ki2zg10.pdf#page=235) and pre-tax profit was $145.963 million in 2022. [Pgs. 235, 195
summary/download_file/annual_report_2022.pdf#page=195)]. A 20% increase leads to $12.682
million in additional depreciation charges.
[18] The ratio of accrued expenses to cost of sales has ranged from 29% to 66% over the last 5
years: 2018 (https://www.temenos.com/wp-content/uploads/2021/03/2020-Annual-Report-
7u42lsu22.pdf) – 66%; 2019 (https://www.temenos.com/wp-content/uploads/2021/03/2020-
Annual-Report-7u42lsu22.pdf#page=195) – 47%; 2020 (https://www.temenos.com/wp-
content/uploads/2021/03/2020-Annual-Report-7u42lsu22.pdf#page=195) – 29%; 2021
t01ki2zg10.pdf#page=236) – 36%.
[19] During Temenos Q2 2023 earnings call (https://www.temenos.com/wp-

content/uploads/2023/07/TemenosGroup_20230720_1815_FullRWTranscription.pdf#page=11),
CEO & former Chairman Andreas Andreades told shareholders that “front office” solutions
represented 15-20% of revenue while “back office” solutions represented approximately 2/3 of
revenue.
[20] Temenos describes (https://www.temenos.com/news/2022/02/17/pakistans-largest-bank-

hbl-selects-temenos-to-transform-its-banking-services/) Habib Bank (HBL) as the “largest bank”
in Pakistan.
[21] Yes, we still call it Twitter.
[22] Microservices are the essential architecture or the building blocks for software to run large
scale applications (https://basecamp.temenos.com/s/article-
detail/a046N000001a6MbQAI/using-temenos-microservices-for-application-architecture).
“Without microservices there is no point of using Infinity”, a Khushhali employee told us.
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‫تيمينوس‪ :‬مخالفات محاسبية كبيرة‪ ،‬ومنتجات فاشلة‪ ،‬وتحول‬

‫عنوان البريد اإللكتروني‬ ‫يشترك‬

Background & Basics: A $7.5 Billion Swiss-Listed Banking

Temenos offers a range of products and services, but is primarily focused

Temenos’ website (https://www.temenos.com/about-us/) says it is the 3rd largest software

Bull Case: Sticky Core Banking Product, A Modernized Cloud-

Temenos’ forward-looking strategy aims to transition from on-premises core banking

(Source: Temenos Annual Reports, *2023 Numbers Are Preliminary)

Fundamentals: Temenos Trades At A Rich Premium Relative To

Its listed peer group comprises the “big 3”

preliminary numbers (https://www.temenos.com/news/2024/01/19/temenos-pre-announces-

Part I: Hallmarks Of Heavily Manipulated

Former Senior Executive: “They Really Are The Masters Of Kind

In October 2021, Temenos Announced A Strategic

A Former Temenos Executive Told Us Mbanq Purchased $20

Former Temenos Executive: “The Convertible Note Was

In October 2021, Temenos announced a partnership

Temenos’ press release (https://www.temenos.com/news/2021/10/11/mbanq-signs-with-

However, litigation (https://www.slideshare.net/secret/It9dWjkOxG4ZJ3) between the founders

(Source: Email exhibit in lawsuit regarding Finlink, Inc. D/B/A/ Mbanq

A Former Temenos Executive Called The Deal A

A Second Former Temenos Executive Confirmed That

Today, Mbanq is listed as a “Success Story (https://www.temenos.com/community/success-

(Source: Temenos 2022 Annual Report [Pg. 14

In February 2021, Temenos Announced A Partnership With

A Former DXC Executive Told Us The Deal Was Actually

In Absence Of A Deal, We Believe Temenos Would Have

In February 2021, Temenos’ CEO Called The DXC Deal

In November 2021 and Again In June 2022, Temenos Re-

Reality Check: A Former DXC Executive Told Us The Entire

“They [Temenos] Left Us At The Altar … We Gave Them A

In June 2022, Temenos doubled down (https://www.temenos.com/wp-

4 Former Executives Described Temenos’ “Pulling

“If There’s A Renewal That They Can Pull Forward, They’re

(*Preliminary results. Source: Temenos Annual Reports)

“Don’t Trust Any Of The Public Information”, “…They

“Legal Teams Would Give Power Of Attorney To The Sales

Temenos Has Almost Double The Days Sales Outstanding

Temenos’ financial metrics support the claims by former employees.

Days sales outstanding (DSO (https://www.investopedia.com/terms/d/dso.asp)) is a well tracked

(Source: Temenos Financial Statements 1

Temenos Claims That It Invests 20% Of Its Revenue Back

Former Executives Told Us The R&D Spend Was “Non-

Former Executives Also Said Temenos Booked Customer

“All You’re Doing Is Just Taking Something That Was

Temenos states (https://www.temenos.com/about-us/research-development/) that it spends

Temenos’ principal R&D centers (https://www.temenos.com/wp-

(Source: Temenos Website (https://www.temenos.com/about-

Temenos’ R&D page also states (https://www.temenos.com/about-us/research-

Both statements indicate that Temenos may be justifying categorization of customer-specific

In 2022, Temenos’s R&D Capitalization Rate Was 62% Higher

Compared With The Peer Average, Temenos’ Excessive R&D

If Capitalization Was In Line With Peers, 2022 EBIT Margins

When companies account for R&D costs, they may “capitalize

(Source: Temenos Annual Reports 1

(Source: FY 2022 Annual Reports of Companies)

In 2023, Temenos Extended Its Allowable Amortization

If Fully Utilized, This Extended Amortization Period Would

(Source: Temenos 2023 Semi Annual Report (https://www.temenos.com/wp-

Temenos Has Also Boosted Its Reported Free Cash Flow

Accrued expenses (https://www.investopedia.com/terms/a/accruedexpense.asp), sometimes

(Source: 2022 Annual Reports, 1 (https://www.sec.gov/ix?