Temenos AG

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You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use only hands as well as connect questions. Please hold the line. The conference will begin shortly. Thank you. Please note, anyone who wishes to ask a question during the conference may press star and 1 on the touch-tone telephone. You will hear a tone to confirm that you've answered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to choose only hands as well as any questions. Please hold the line. The conference will begin shortly. Thank you. Please note, anyone who wishes to ask a question during the conference may press star and 1 on the touch-tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Please hold the line. The conference will begin shortly. Thank you. Please note, anyone who wishes to ask a question during the conference may press star and 1 on the touch-tone telephone. You will hear a tone to confirm that you've answered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only hands as well as any questions. Please hold the line. The conference will begin shortly. Thank you. Please note, anyone who wishes to ask a question during the conference may press star and 1 on the touch-tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use only hands as well as connect questions. Please hold the line. The conference will begin shortly. Thank you. Please note, anyone who wishes to ask a question during the conference may press star and 1 on the touch-tone telephone. You will hear a tone to confirm that you've answered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only hands as well as in a question. Please hold the line. The conference will begin shortly. Thank you. Please note, anyone who wishes to ask a question during the conference may press star and 1 on the touch-tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use only hands as well as connect questions. Please hold the line. The conference will begin shortly. Thank you.

Ladies and gentlemen, welcome to the Temenos Q1 2026 results conference call and live webcast. I am Sandra, the course call operator. I would like to remind you that all participants have been listened only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Takis Spiliopoulos, CEO and Interim CFO. Please go ahead, sir.

Thank you. Good afternoon. Good evening. Thank you for joining our Q126 results call. As usual, I will talk you through our key performance and operational highlights before updating you on our financial performance. Starting on slide 6, we delivered a strong performance in Q126 across all our key metrics and our product revenue continues to grow above market. This follows on from the strong performance in 2025 where we delivered above market growth in product revenue in the first year of our strategic plan. The sales environment remained stable through the quarter, and in fact, we had a particularly good performance in the Middle East and Africa, signing a number of deals with new and existing customers. Importantly, we also saw good momentum in the US. As we discussed at our Capital Markets Day, we have a strong pipeline of deals in the US, And several of these are progressing nicely through the sales process. And we fully expect to sign some of them this year. Of course, it is hard to give precise timings given the complexity of the deal process, but I'm confident we will convert the US pipeline into revenue. And this is one of our key measures of success for the business this year. We also delivered another strong quarter of growth from maintenance again largely driven by premium maintenance signings as we continue to upsell across our customer base. We have a well-funded investment plan in place for the year with planned incremental investments of $28 to $35 million, partially offset by around $10 million of cost efficiencies. One quarter into the year, we are on track with our investment plan, and I would like to highlight that we made several senior hires in sales and product. I'm also pleased to announce the hiring of a new CFO, Daniel Schmucki, who will join us on August 3rd this year. Daniel brings a wealth of experience, most recently as CFO of SIX Group and before that as CFO of publicly listed Zurich Airport. Daniel has a strong track record in building and leading high performance teams in complex international businesses. and he will be an excellent addition and strong partner for executive committee and senior management. Turning back to the business, we delivered good operational leverage in the quarter with a cost-based growth from investments we made last year, offset by strong revenue growth in Q126. And lastly, we have reconfirmed our 2026 guidance and 2028 targets. Moving to slide seven, I'd like to highlight some of the key deals with clients in the quarter across different geographies and tiers. We had a number of expansion deals with existing clients, including a Tier 1 bank in Japan for new core and payment solution, and a leading Swiss private bank expanding their payment suite across several geographies. In SaaS, we extended our partnership with a digital arm of a leading bank in GCC. And we signed with a leading bank in APAC for call payments and FCM to support their launch of a new digital bank serving retail, corporate, and wealth clients. The diversity of deals across customer tiers, geographies, business models, products, and delivery types demonstrates the breadth and depth of our banking domain knowledge, customer trust, and product capabilities. Turning to slide eight, I'd like to highlight the value we are delivering to our customers. Given all the focus on the Middle East, I'd like to show one success story from the region this quarter with Al-Salam Bank in Bahrain going live on our core banking platform. They selected Temenos to future-proof their business as we were able to demonstrate our platform's scalability and support their future growth. They wanted a platform that could enable market-leading digital services, support their AI initiatives, and help them meet their regulatory compliance requirements. In the implementation, we replaced multiple siloed legacy systems with two acquired banks migrating to our single platform, delivering a significant increase in capacity and throughput and enabling the bank to launch a new digital app for real-time integrated services, thus creating new revenue opportunities. This is a great example of what our platform can do for banks looking to scale with confidence and reflects the kind of partnership and execution that sets Temenos apart. Moving to slide nine, we show this slide at our Capital Markets Day in February, But I want to reiterate our positioning in the AI era. AI is clearly reshaping technology markets. But banking is not a typical technology environment, and that distinction matters. Banks operate at the intersection of two of the highest thresholds in technology, product complexity and customer risk aversion. This is not an environment where generic AI solutions can simply be dropped in. The requirements are fundamentally different and that is where Temenos competitive mode is strongest. On the product side, banks demand trusted domain expertise that handle highly complex workflows, proprietary data, and platforms that can be extensively audited. These obligations do not shrink with AI. As banks automate more, these obligations become more concentrated in critical systems. From a customer risk perspective, our solutions are mission critical. Banks operate in one of the most highly regulated sectors and have zero tolerance for errors or hallucinations. Every decision must be deterministic. The cost of getting it wrong is existentially high. That's why we sit in the upper right quadrant of this matrix, where both product complexity and customer risk aversion are highest, as is the threshold for AI adoption. But the benefits of AI are real, and adoption will increase over time, and Temenos provides the regulated backbone for banks globally. By embedding AI into our platform, it allows customers to automate, scale, and innovate without compromising on compliance or reliability. We are not only protected from AI innovation from peers, incumbents, and customers. It is increasingly foundational to our right to win. Turning to the next slide, we have a well-defined AI strategy to capitalize on our advantage across our products, our process, and our people. Our strategy will lower total cost of ownership for our customers to embedding AI across our products, and it will speed up our software development lifecycle and support customers who generate assistance. And lastly, it will empower our people to leverage AI and enable greater productivity. As I mentioned before, the adoption threshold for AI in the banking sector is very high. where there is high product complexity and significant risk aversion. This, combined with deep customer trust and domain knowledge, creates a strong competitive mode for Temenos and gives us the right to win in the AI era. Moving to slide 11, I'd like to give you an update on the progress we made in the first quarter on executing our strategy. Our product teams have made good progress on the product roadmap, and we are on track for several new product launches in the second quarter across core, digital, AI, and composability, while also increasing the range of AI capabilities embedded in our product. We have continued investing in the business, in particular with several senior hires in our global sales organization. These individuals bring significant expertise to Temenos to further support and drive our core banking sales pipeline, as well as expanding our team responsible for delivering large complex deals with tier one banks in particular, which requires a specific skill set and the ability to manage highly complex negotiation to a successful closing event. We also launched our new pricing and packaging in the first quarter, which will drive better value for our clients and for Temenos by simplifying our approach, especially for deals involving multiple modules or products. And lastly, we continue to roll out AI tools across the company, most notably including the rollout of Anthropic in our product teams to enhance our software development lifecycle. I will now run through our Q126 financial highlights, focusing on constant currency, non-IFRS financials. On slide 13, we delivered strong ARR growth of 13%, despite the headwind from the BNPL client that moved off our platform at the end of last year. For those interested, we have shown the underlying growth rates for all our key metrics this quarter in the appendix. excluding the impact of the BNPL client. We had good growth this quarter across all our recurring revenue lines, both subscription and SaaS, as well as maintenance. And this was also reflected in the strong product revenue growth of 14%, well above the market run rate growth. Turning to slide 14, subscription and SaaS grew 12% in Q1 26, continuing the strong performance from the previous year. As I mentioned earlier, there has been so far no visible impact from events in the Middle East, with the region having a strong quarter in terms of deal signings, with a good performance in SaaS in particular. Outside of MIA, we also saw broad-based growth across client tiers and products. This was complemented by strong growth in maintenance, and also decent services growth, which together drove total revenue growth of 13% in the quarter. Moving to slide 15, both non-IFRS EBIT and BPS grew 20% in the quarter. The year-on-year increase in our cost base is reflecting the significant investments we made throughout 2025 in product, go-to-market, and operations. However, This is more than offset by the strong revenue growth and benefits from efficiency gains in the quarter. Proforma non-IFRS R&D costs were up 14% year-on-year in constant currency as we are accelerating our investments into product as communicated in February. All this together demonstrates the strong operational leverage in our business. Premium maintenance in particular attracts a high margin and continues to help drive the growth in profit. Let me highlight a few items on slide 16. ARR stands at $860 million, despite the headwind from BNPL, giving us excellent visibility on future recurring revenue and cash flow. The 15% growth in maintenance revenue was largely linked to strong premium maintenance signings as our sales teams continue upselling to our existing client base. We continue to guide for maintenance growth of 7% to 8% for the full year, as we are taking a prudent view on the remaining demand for premium maintenance across our customer base. On profitability, EBIT margin improved by 190 basis points to 32.7% year on year, reflecting strong operating leverage and some benefit from cost efficiencies. Moving to non-operating items on slide 17, net profit was up 19% in 2-1-26 and EPS grew 20%. Our EPS continues to benefit from the strong growth in profit and a lower share count from the shares canceled at last year's AGM from prior buybacks. We saw an increase in net finance charges and taxes in Q1, partially offset by FX. We had a slightly higher tax rate this quarter, with the expected full-year tax rate unchanged at 19% to 21%. On slide 18, free cash flow for the quarter came in at $60 million, growing 22% year on year. Driven by strong ARR growth, good EBIT to cash conversion, and our disciplined approach to capital allocation, which we outlined at our capital markets day in February. Our strong growth in free cash flow is a key metric for us and is in line with our expectations given we are now in the fourth year since introducing subscription contracts in 2022. We raised our 2028 target for free cash flow in February this year, reflecting our confidence in the strength of our operating model, balance sheet, and cash generation. On slide 19, we set out our changes in group liquidity in the quarter. We generated $204 million of operating cash and bought back $104 million worth of shares as part of the buyback launched in December. We ended the quarter with leverage at 1.3 times, comfortably within our target range of 1.0 to 1.5 times. Turning to slide 20, a few comments on our debt, leverage, and capital allocation. We completed our share buyback program for a total of 100 million Swissy in April, 2026. With shares representing 1.9% of registered capital purchase to be used for general corporate purposes. This was the second share buyback we launched in 2025. with the first 250 million Suisse completed in August 2025. The shares purchased in that larger buyback are to be canceled at the AGM in May this year. A reported net deficit at 609 million at quarter end. We reiterated our disciplined approach to capital allocation at our Capital Markets Day in February. Our priority is to invest in our business in particular to accelerate our R&D roadmap and using share buybacks to ensure capital efficiency and enhance shareholder returns while maintaining flexibility to support our growth levers through bolt-on acquisitions. We also have a progressive dividend policy which reflects the recurring nature of our business model. Next, we have reconfirmed our 2026 guidance which is non-IFRS and in constant currencies, except for EPS and free cash flow, which are reported. The guidance reflects the strong performance in 2025 and the investments we made last year, which we are now starting to benefit from. The guidance includes the headwind from the termination of a BNPL client in 2025, which we have given on the slide. There will be no further headwind from this beyond 2026. And lastly, we have reconfirmed our 2028 targets based on a strong first year of execution, confidence in our strategic positioning and good visibility. Operator, please can we open for questions?

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questions on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Please limit yourself to one question per person. Anyone who has a question may press star and one at this time. Our first question comes from Charlie Brennan from Jefferies. Please go ahead.

Hi, thanks, Takis. Thanks for taking the question. Congratulations on the good results. Maybe I'll start just with a geographic question if I can. If I've done the numbers right, it looks like most of the growth in the quarters come from Middle East and Africa. That's maybe not what I would have expected given some of the news flow that we've seen. Can you give us a sense of whether you felt any disruption in March and could the numbers have been better? And I guess aligned to that, it looks like the U.S. was broadly flat in the quarter. Was there any sense of disappointment for you in the U.S.? Thank you.

Hi, Charlie. You know, thanks for the question. So maybe first on, I think, the situation in the Middle East. And clearly when, you know, this started at the end of February, Like everyone else, we're worried about the safety of our people. So we went into this prepared from past events like COVID. So the company handled this really well, and especially locally. So thanks to everyone. Now, from a business perspective, I think it's worth taking a step back and you know, Middle East and Africa. These are two, let's say, large regions, you know, broadly balanced in terms of contributions to both the Middle East and Africa, with Africa having seen, you know, in the past, you know, quite strong growth, stronger than the Middle East. We have, you know, throughout the month and actually also into April, seen overall a stable sales environment and also specifically to the Middle East and Africa region or Middle East, no change. So I think this is important to note. And while, you know, there was some limited disruption of travel at times, you know, we should note, and if you look at the situation on the ground, governments are putting, you know, significant resources and everything they can, you know, to keep, business operating as normal. This is what we saw throughout March. So yeah, no impact seen in terms of, no negative impact seen so far, either on pipeline generation or conversion rates. And this is what we have seen also in the first few weeks in April. Now looking at the other regions, I think on specifically the Americas. The U.S. developed, actually, as planned, LATAM as well. Europe, you know, was probably also in line where we saw, you know, some, I think, because we had a top comparison base with Asia-Pacific, but overall, I think the performance was pretty much in line with what we expected. I think we didn't save deals or anything for Q2, so nothing actually specifically to call out in terms of the regional performance.

Great. Thanks very much.

The next question comes from Frederic Boulan from Bank of America. Please go ahead.

Thank you. Good evening, Takis. If I can ask a question on the revenue guidance. So we have subscriptions in the South, growth of 12% in Q1. You've kept full year guidance and change at around 9%. It would be good to, you know, discuss any specific paving we should expect or specific points. And maybe we can also extend that question to the EBIT guidance, 20% in Q1, a guidance of 9% for the full year. So here as well, I mean, any specific items we should have in mind or just a guidance framework at this stage. Thank you.

Hi, Fred. So, on guidance, I mean, we've never raised guidance after a Q1. You know, Q1 is like every year, the smallest quarter. There are still quite a number of uncertainties out there on the macro side. You know, we don't know what's going to happen. So, I think we, having a good start is really helping with the full year guidance. visibility, but at this point in time, I think it's the right approach to stay prudent. Also, if you look at the details, clearly we had good performance in subscription and SaaS and maintenance and services. So across the board, we invested as planned. So the upside ultimately on the growth came really from a stronger top line demonstrating the operating leverage. Yes, we're tracking I had them on all KPIs. Q2 is a bit more difficult comparison base. Let's see where we end up then. So for now, I think it's the right prudent approach. Thank you.

The next question comes from Toby Ogg from JP Morgan. Please go ahead.

Yeah, hi. Good evening, and thanks for the question. Maybe just bigger picture one. We've obviously seen, you know, over the last couple quarters, you know, better momentum, and that's obviously been translating into upward revisions to expectations. You know, when you take a step back, what do you think are the key drivers that have been yielding that upward momentum? Thank you.

Hi, Toby. Good question. Overall, if you look at the track record over the last few quarters where we put a lot of effort into transforming Temenos across the organization, clearly accelerating on the product roadmap, putting a lot of investments into the company across go-to-market and also product and operations, all this on the back of let's say, you know, stable sales environment. You know, we have seen an environment where banks were printing good results. And I think that's also the expectation going forward. It's also, so that's, you know, if you want the stable sales environment coupled with, you know, a more determined, more focused organization is clearly something that's helping us. On top, and this is, you know, where we always believe it's worth. And the first time we do up from the investments, we're reaping now the benefits of that. Yeah, we, if you go back early 2025, we said it's going to be an investment year. We've done the investments. We said in February, we're accelerating the investment because there is a very, very large revenue opportunity. And this is what we're seeing the benefit from. And the one element, what I mentioned, expanding what we call the large deal team, this is also driven because we see, as we've seen in the past years, more and more large deals coming into pipeline, where we need, where we want to have dedicated resources driving those deals end-to-end. And this is across the regions and globally. This is across, you know, the tiers, not just tier ones. So this is, again, you need to invest ahead and reap then the benefits, and this is what we're seeing, and obviously striving for more. Thank you.

The next question comes from Gregor Herman from Barclays. Please go ahead.

Hello, Takis. Thank you for taking my question. Maybe just, I think, You had clearly a good start into the year, but I think Q2 is maybe a very difficult comp. Can you tell us maybe how is the pipeline coverage looking like next quarter? Can you provide any indications on the level of growth we should expect for the second quarter, please? Thank you.

Hi, Greg. So as we said at the start of the year, that was two months ago, when we issued the initial guidance for 2026, we said, the pipeline coverage is there for delivering those numbers, also stating we want to be proven. So two months down the road, as you would expect with more salespeople being onboarded and being now live and generating pipeline, the pipeline evolution has been very pleasant, to put it like this. What we also said is, There are a number of large deals embedded in our full year guidance, and we didn't sign any large deals in Q1. We had a good start in Q2, so we're always taking a risk-weighted approach to large deals. Not all of them need to come, so we're confident that we can We can grow a Southend subscription as well also in Q2 despite the top comparison base.

Very clear. Thank you.

The next question comes from Mark Hyatt from Morgan Stanley. Please go ahead.

Thanks for taking my question. I've just got two, please. Firstly, if we just touch on the maintenance side of things, obviously you call out strong growth there, 15%, and strong premium maintenance signings were a driver of that. Obviously, you've given some guidance and help around how we should think about the full year result. But can you just tell us a little bit more around how sustainable that tailwind is for the rest of the year? How should we think about the phasing? And if you can quantify how much of that upsell opportunity you've already worked through, that'd be really helpful. And then secondly, maybe just a bigger picture question on AI. Could you talk about what you're hearing from bank C-suite members today on the AI priorities? Are they still mainly focused on productivity uplifts and customer-facing use cases, or are they starting to think about AI more deeply being embedded in core banking and operations? How are they engaging with Temenos as a strategic partner for that at this stage?

Thanks. Hi, Mark. So on maintenance, yes, you know, 15% growth was a bit ahead of the full year growth rate we have envisioned. We said, you know, about 7% to 8%. But you need to think about, you know, it's 2.125, which, you know, posed a relatively benign comparison base, which is going to become incrementally more difficult to lap. Clearly, we see we're always positively surprised and continue to see a good uptake of our premium maintenance offerings on the one hand, but it's also we have, we see very little downsell or attrition on that. Yeah, so that helps basically, you know, with on the renewal of this maintenance offerings. Overall, I'm not going to give you that level of detail, you know, how much opportunity there is still there but clearly we're um you know it's still a very small part of our overall maintenance um number and and therefore i think that the growth will continue i think with seven to eight percent for the full year you know clearly growth rates probably coming you know down uh into single digits um you know for for the rest of the quarters I think this is the phrasing we would see. And then longer term, so 27 and beyond, we said about 6%, 5%, 6% is the right number. Again, let's stay prudent because we've been positively surprised before, but I think we're now seeing really the tracking according to what I just said. On AI, there is Basically, there are two areas where we see demand from our banking customers. On the one hand is overall use cases around the core, if you want, whether it's in digital or something like FCM AI. And this is where we're going to launch a number of new ideas, a number of new products this year. What we do with our clients, with our banks, is really develop those use cases in what we call a design partnership. We're trying to find ideas where we can basically take across our installed base. If something is very bank-specific, we're not the ones to basically do the custom development of that. But if we find AI use cases like FCM AI, you know, this is something we can then deliver to our installed base. The other area where I think clients are very keen to get AI expertise is, and this is the main questions they're asking us, and we're developing some ideas, trialing some ideas, both ourselves but also with partners is, can you, with the help of AI, help us accelerate the implementation timeline, the upgrade time, because this is where they would save a lot of money. So far, we don't have discussions on AI in the core, but really those areas, specific use cases around the core in digital, in FCM, and then can you help us accelerate the implementation and the upgrade time, because this is where they spend a lot of money. And we have some ideas, but I think it's still early to talk about.

Thank you very much. Appreciate that.

The next question comes from Pawan Daswani from Citi. Please go ahead.

Hi, Takis. Thanks for taking my question. Could you maybe come back to the EBITDA growth guidance question, given the strong start of the year? Are there any kind of phasing of costs that we should be thinking about for the rest of the year? And particularly, you mentioned some senior hires in the quarter. And are there any further investments needed to drive the pipeline conversion that you kind of aim for for the rest of the year?

Hi, Paul. So there is, I think, nothing unusual what we plan in terms of the phasing this year. As you heard, we have an investment budget of 28 to 35 million, which is clearly something we're putting in place, especially, you know, in the first half of the year. There's also the exit cost. You know, we exited 2025 with... with, you know, fully invested cost base. There is clearly, if we continue to see if there is upside on the top line, you know, this will, this shows the operating leverage on this. But again, as with, you know, as with the top line, I think we want to stay prudent. We want to see, so far we see the investments coming through. Nothing extraordinary planned. You know, the bulk of investments really go into product acceleration. So, and this will, you know, this will continue throughout the quarter. So, I think the cost base, you would expect, let's say, normal seasonality. So, let's say Q2 will be maybe, I don't know, 12 to 15 million higher as we had last year. Yeah. And then, you know, also increased cycling Q3. And then in Q4, you have basically all the variable costs coming in. Yeah. So this is overall the $50 million, you know, cost increase year on year.

The next question comes from Muavala from Goldman Sachs. Please go ahead. Your line is open. You may proceed with your questions.

Great. Thank you. Great practice. Congratulations on the quota. I just wanted to concentrate a bit on North America. I know sort of 18 months back, you were about to add more capacity. You've obviously been bringing some of that on. Can you give us a sense of the pipeline? I know you touched on potentially some larger deal with wind to come. How is North America kind of a key part of that? And more importantly, obviously, in terms of the strategy for North America, are you focusing more on that kind of tier two of regional banks and credit unions versus a very long sales cycle kind of tier one deals? Thank you.

Hi, Mo. On the U.S., so we have seen and we continue to see, you know, good progress on a number of, you a lot of deals through the pipeline, as you would expect. Now, given this is all new logos, you know, and new procurement, it's usually difficult to quantify the time until really you have, you know, from being selected until you have the contract signed. But this is what's driving, you know, the pipeline and where those deals stand, which is driving our confidence that they will will get converted in 2026. Now, if I look at the pipeline overall, and we always targeted those 150, 160 banks, we have a very substantial number of these banks is in our pipeline, which shows also the effectiveness of building pipeline. We still have to convert those, and maybe not all will turn into deals. But clearly, that drives confidence in the U.S. Now, what we see is, given we hired a lot of taste people, what we also see is the U.S. innovation hub is really making a difference for the U.S. pipeline because it's something which we didn't have before. It's a different approach, and it's resonating well with prospects. And the other thing which we didn't do before is, you know, investing upfront in, you know, not just go-to-market, but also the support organization and the backbone. And this is something clients want to see there, you know, happening because these are long-term decisions they're taking in the core space. So I think where we still, you know, have opportunities is, as you mentioned, in larger deals, and this is why we're expanding the teams. This is not specifically to the U.S., but clearly also in the U.S. We still haven't, you know, moved away from our target market in the U.S. It's tier, you know, the lower tier two, tier three market. Occasionally, you get also tier one opportunities, but clearly, you know, again, we're taking a very risk-weighted approach on large deals, whether they are in the U.S. or in any other country. So overall, you know, feeling very confident about, you know, execution of the pipeline.

The next question comes from Justin Forshear from UBS. Please go ahead.

Thank you very much, Takis, and congrats on a good start to the year. Just a couple questions from my end, if you don't mind. The first one, I just wanted to unpack that Middle East and Africa number a little bit more. I understood that you said earlier in the Q&A that Africa is contributing a little bit more than the Middle East. I think you talked a little bit about that win in Bahrain as well. Maybe you could just be a little bit more specific on the countries within Africa which you are seeing strength and the type of banks which you're working with and what types of products you're selling them. Is it the Islamic banking solution? I think you've talked about that in the past. Or is it something else? Maybe what degree of continued strength in the Middle East is baked into the guidance versus closing of some of those U.S. deals popping through the pipeline? And then just a broader high-level question for my second one, can we just talk a little bit about the mix within core banking between some of these different factors? So, for instance, retail side of core banking, corporate, LMS, and wealth, clearly it encompasses a lot of different types of products. And what is expected to be the go-forward driver of growth, the most material go-forward driver of growth within those? Thank you very much.

Hi, Justin. Thanks for the question. Let me start with Middle East and Africa. What I said is it's broadly balanced in terms of size, but Africa... at the more recently the faster growth rates. Yeah. So if you look back, you know, some of the, you know, the last few quarters, yeah. We don't, I think if I look at the pipeline across both the Middle East and Africa, it's very strong. It's very healthy. And, you know, Middle East and Africa has been a strong performer over the last couple of years, you know, a lot of structural reasons. So we don't expect any change or we don't assume any change in conversion rates, neither an improvement nor a deterioration for the rest of 2026. As we've shown on one slide, you know, we're doing everything in Middle East, yeah. It's also picking up in terms of SAS. We signed, you know, this tier two bank. where basically they expanded the core banking partnership with their basically digital subsidiary in GCC. So that's just one example. In terms of products, it's really front to back for many banks, but also core, also digital. I think wealth, we've seen quite some pickup as well. Islamic banking, that remains a key pillar. So it's really, you know, across the products we see for Middle East. On your second question, it's quite interesting one. So wealth, I think we see wealth for especially the larger banks. You know, we're especially dominant and playing, you know, in the high-end, ultra-high net worth piece. So that's, you know, for the wealth sector. opportunity. If you look at pure core, it's mainly retail and corporate. What I would say is the last few years of post COVID, you saw a lot of demand for retail, because this is where banks felt the pressure from you know, basically the non-incumbents, yeah, with price pressure. So they needed to lower the cost. So their investment was first and foremost in retail because they wanted to protect, you know, they were offering their profitability. I would say in the last two years, because they basically, you know, fought off the non-incumbents to a large extent. Now they're the focus has turned more towards corporate. There is still very good profitability and banks want to protect and even expand profitability. And there is much less competition on the corporate side from non-incumbents, whether it's trade finance, treasury, and so on. So this is where we see clearly from a pipeline perspective and from a demand perspective, this is clearly where we have seen the pickup in the last two years.

Thank you so much. Appreciate that, Takis.

The last question comes from Josh Levin from Autonomous Research. Please go ahead.

Good evening. Just two questions for me. Takis, you said there's no visible impact. Can you hear me?

Yeah, we can hear you, Josh. Yes, we can.

Yeah, you said there's no visible impact so far from the war in the Middle East. But if the war resumes or oil prices stay high and we're heading towards sort of a global recession that some people are talking about, how do we think about how exposed 10 minutes is to that? You know, how do bank executives think about sort of this is – are they going to push through this because this is really a long-term project versus actually retrenching and spending on software because they are concerned about the recession – And then secondly, the Orlando Investment Hub, I think it's been open since June, so it's maybe a bit early, but any last- A prudent view on uncertainty and macro risks, you know, coming back to the Q1 performance and the guidance.

So what we believe is, and this is, you know, the- lessons learned from the past. If you see, as long as you see only a short-term disruption to anything, so short-term being a few months, there is, you know, maybe a lower likelihood for a recession. If this, you know, keeps going and lasts into well into, I don't know, two, three, the second half, then probably you would expect to see an impact on, you know, overall, you know, GDP growth and, you know, maybe a higher risk for global recessions. What we have seen, you know, again, in the past is, you know, sometimes countries tipped into like technical recessions without any impact on demand for our software. Yeah, so we're not, We have not been benefiting, you know, in upward cycles, you know, if economies were booming, but also being less affected in, you know, let's say more recessionary environments, as long as there is no, you know, a massive external event like GFC or COVID. So for now, the way we look at this is obviously being very alert on what's happening day to day. The countries there and we have most exposure is obviously Saudi and UAE, much less on the other ones. Clearly, the governments are doing everything to keep operating normally. They're open for business. And I think this is how we see the banks behaving so far. So this is as much as we can say, again, taking an overall prudent view on what can happen and will happen. On Orlando, it's really a success story from different angles. It's on the one hand, we're getting very good, highly skilled people there. It's something we see resonating well also for our prospects. We have a lot of banks coming in, ideizing, looking at what can be done. We have very interesting demos there, and it's really the hub where we keep investing and keep hiring, as we do in India as well. We do a lot of, one or two, ultimately a lot of US product-specific development there, which is obviously also resonating well with clients there. We're now about, you know, 70-plus people, and we'll keep expanding there because, yeah, we have demand for U.S.-specific product, and we want to deliver, but clearly also have a strong pipeline in the U.S. So this will – I'm very happy about, you know, the progress in Orlando.

Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Takis Spiliopoulos for any closing remarks.

Yes, thanks everyone for joining us for this Q1 update. Looking forward to update you in July with our Q2 26 results.