Swiss banking systems vendor Temenos has posted third quarter net profit of US$9.9 million, compared to US$0.5 million in the same period last year, and has raised its full year guidance for the third time this year.
The vendor says the rise in Q3 income reflected a favourable change in the sales mix, good cost control and continued improvement in services margins.
Gains from forward foreign exchange contracts gave an additional boost to net income, says Temenos, as well as moves by banks to invest in new core banking projects due to regulations like Sepa.
Temenos CEO Andreas Andreades, says: "The desire to grow revenue, improve business agility and enhance customer service - coupled with changes in competition and regulation, such as Sepa - are causing banks to replace their core banking systems."
The vendor says it signed nine new core banking clients in the quarter, including investment bank Dresdner Kleinwort which is rolling out the T24 core banking platform across 16 subsidiaries and branches in Europe, Asia and the US to help meet upcoming requirements such as Sepa.
Temenos has also signed seven new clients to its front office CRM technology ARC during the quarter, bringing the total to 16.
Andreades says so far the company has not been impacted by the sub-prime crisis in the US and the business pipeline remains strong into Q4 and 2008.
"We believe that the momentum we have built up in terms of new signings will be sustained through 2008 and beyond as the many growth initiatives we have put in place, such as the partnership with Metavante in the US and the launch of ARC (our front-end product), start to gain traction," he adds.
Looking ahead the vendor has revised its full year guidance for the third time this year and now expects revenue in the range of US$310-315 million - up 43%-46% on 2006 - and EBIT of US$59 million, up 77% on last year.