Ladies and gentlemen, welcome to the Temenos Q3 2024 Results Conference Call and live webcast. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register a question 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's my pleasure to hand over to Jean-Pierre Brulard, CEO. Please go ahead. Thank you, operator, and good evening, good afternoon. Thank you all for joining us today for our Q3 2024 results call. And I would like first talk through our key performance and operational highlights for the quarter before handing over to Takis. So starting with the highlight of Q3, I was pleased that we saw continued engagement from customers through the quarter. Sales cycles already normalized in Q2, and the sales environment was stable across all our regions. We saw strong demand from our install base in Q3, as well as signing a good number of new clients. However, we did have some sales execution issue in our Middle East, Africa region, which resulted in Total Software Licensing revenue of $96 million, a bit below consensus expectation. We have carried out a deep review of our sales pipeline and addressed the sales leadership issue with our CRO, stepping in to support the Middle East, Africa region through Q4, as we look to strengthen our sales team. This issue was limited to Middle East, Africa region, and we have already taken the necessary action to address it. On the point of leadership, I am pleased on the good progress we are making to attract talent. In particular, I am pleased Barb Morgan has joined our Chief Product and Technology Officer, and we will continue to invest on new talent across the business as we execute our investment plan. Looking at other KPIs, ARR reached $761 million in Q3, up 9% year over year. Free cash flow was down 21%. However, adjusting one-off payments we made relative to the independent investigation, free cash flow grew a very healthy 26% in the quarter. We have issued slightly revised guidance for FY 2024 and guidance for Q4, taking a conservative view on our Q4 pipeline. However, importantly, our EBIT and EPS guidance are unchanged. So, as customer success, we are very focused on our customer success. In Q3, we had another 61 go-lives across our products and now reach 224 go-lives in the first three quarters of the year. Combining the effort made our professional services team and partners, we continue our strong success in helping our customer modernize. To demonstrate our customer-centric approach, I'd like to focus on one particular customer case study from Q3. MidwestOne Bank is a regional bank in the U.S. with operation across four states. They went live in Q3 with Temenos Digital Onboarding, consuming it as a SaaS on AWS. And MidwestOne wanted to improve and streamline their customer digital experience and enhance their own operation efficiency. Having a highly scalable platform was really important for them, so they chose Temenos to achieve their operation and business goal. And using Temenos for onboarding and origination, our client has already seen a significant improvement in speed, performance, and customer engagement through their digital channels, with customers completing an application in an average of two minutes. We are very proud to work with MidwestOne as we look to expand our presence in the U.S. banking market. I also like to share a deal with this quarter from the Middle East, Africa region. Boubyan Bank is the second largest Islamic bank in Kuwait. They have selected Temenos to modernize their core banking, and they will migrate to Temenos Core Banking across their retail, corporate, and wealth operation. And Boubyan has a vision to become one of the top Islamic banks in the world, with innovative product and services. It's a testimony of the strength of our core banking product that they have chose to work with Temenos. And I'm confident we have a strong competitive position in the Middle East and Africa region, where we will continue to invest to capture this fast-growing market. I will give more details on how we will continue to increase our market share across geographies in the strategic plan we will present at our Capital Markets Day in November 12. This market leading position and competitive strength is also recognized by the latest industry analyst reports. We were once again ranked first in the IBS Sales League T ables for core banking, as well as being ranked first in many other categories, including digital channel, neo and challenger banks, and retail payments. IDC also published their review of core banking vendors across North America, EMEA, and APAC, and Temenos continues to be a leader in every single market. We have continued to reinforce the strength of our leadership team this quarter with the hiring of Barb Morgan as our new Chief Product and Technology Officer. Barb is a fantastic hire for Temenos, bringing twenty-five years of experience leading global product development organization, with particular expertise in banking and financial services. She joined us from London Stock Exchange Group, and prior to this, she served as Chief Technology Development Officer at FIS, leading their global payments and banking product engineering. Barb has a strong background in integrating AI technology, building high-performance team, and launching transformative products, working closely with sales operation in to deliver growth. I'm delighted to have her already on board and look forward to introduce her at the CMD on next November twelve. Lastly, I would like to give an update on our priorities going forward. We have defined our senior leadership team with which is the 40 top leaders below Executive Committee, and they are already actively contributing to our strategic plan, and they will be key to driving cultural change across the organization. We have been attracted new talent, in particular in sales. We have started to execute our investment plan with hire in the U.S. and continue to recruit sales in both U.S. and Western Europe in particular. In terms of go-to-market, in addition to push ahead with new hire, we are laser focused on our operational excellence, and we are starting our efficiency program to reduce management layers across the organization. For product and technology, with our new leadership on board, we are reviewing our product and technology roadmap to simplify it and define the key areas of innovation we want to focus on. Even more importantly, we have defined our strategic and operational plan and the roadmap for executing this. We will share that at the Capital Markets Day on November 12. Now, I would like to hand over to Takis to take through the other business and financial highlights of the quarter. Thank you, Jean-Pierre. On slide 14, I'll start with an overview of the quarterly financials. All figures are non-IFRS and in constant currency, unless otherwise stated. While our software licensing revenue was impacted by sales execution issues, our ARR continued to grow, reaching $761 million at the end of Q3 2024, up 9% year on year. ARR is now equal to 85% of our product revenue, or 75% of total revenue over the last twelve months. It shows the amount of progress we have made in moving to a recurring revenue business model. Despite the quarterly P&L volatility, we have very good visibility on our cash flow growth over the coming twelve months from our strong ARR. SaaS ACV this quarter was $9.4 million and included two new logo wins. We expect sizable deals to sign soon and therefore to drive strong growth in Q4 SaaS ACV. Maintenance continued its strong growth trajectory, again up 10% in Q3 2024. I expect maintenance growth of around 8%-9% in Q4 2024 as we start to lap strong comparatives. Total revenue grew 4% for the quarter, and EBIT was particularly strong, up 19%, again, benefiting from lower variable costs across commissions and bonuses, some of which will revert in Q4 2024. We have been expanding our sales coverage since July, with a particular focus on sales in the U.S. and Western Europe, but these new hires from Q3 and Q4 will only have a limited impact on costs this year. We generated $22 million of free cash flow this quarter, which was down 21% year on year, as we absorbed the full impact of the independent investigation in our Q3 cash flow. However, including this impact, our free cash flow would have grown 26% this quarter and 21% year to date. DSOs were 134 days at quarter end, and I now expect DSOs to be slightly higher by year end than in 2023, due to the change in revenue mix we have seen this year, with greater contribution from subscription licenses and lower contribution from sales. Looking at capital allocation and the balance sheet, we completed our Swiss CHF 200 million share buyback in September, purchasing 4.3% of the registered shares. These shares will be canceled next year post our AGM. We ended the quarter with $775 million of net debt and leverage at 1.8 times, and this should trend down by year-end towards the lower end of our target range of 1.5-2 times. Moving to slide 15, it is worth noting that subscription grew 17% this quarter, even with the sales execution issues we faced. We sold into our installed base, particularly strong in the quarter. Operating costs were down 1% in the quarter, despite the annual salary increases in July and sales hiring, as we have started to benefit from some of the cost savings we are realizing from our pre-efficiency program and with lower variable costs in the quarter. EBIT grew 19%, with the EBIT margin expanding by four percentage points. On slide sixteen, we have like-for-like revenues and costs, adjusting for the impact of M&A and FX. The figures are all organic and therefore in line with our constant currency growth rate. Our services costs were down another 9%, and our services margin continued to improve. Product costs were up only 1% as we started to benefit from our efficiencies program, while we continued to invest in key areas around sales, product, and technology. We will continue hiring in Q4, and we'll give more details on our investment plan as well as efficiencies at the Capital Markets Day in November. For Q4, as an indication, I'd expect our cost base to increase by more than $30 million sequentially, driven by the usual seasonality and with higher commissions and variable costs in particular, driving the increase. I would also like to flag that our net capitalized development costs have continued to decline, coming down to $1.3 million in Q3 2024. We now expect net capitalized development costs to be around $12 million for the year, down from $18 million from 2023. Looking at FX, there was almost zero impact on EBIT this quarter. On slide 17, net profit was up 24% ahead of EBIT, with higher tax charges offset by net fixed gains. EPS was similarly up 25% in the quarter. On slide 18, our LTM cash conversion was 150%, well above our target, and we expect a strong cash quarter in Q4 as usual. Moving to slide 19, the main impact on liquidity this quarter was the share buyback. We generated $52 million of operating cash and bought back $187 million worth of shares in the quarter. We ended the quarter with $107 million of cash on balance sheet and net borrowings of $798 million. Our leverage is at 1.8 times, and I expect our leverage to be towards the lower end of our target range by year-end. We do not currently plan to launch another share buyback this year, but given our strong cash generation and assuming no acquisitions, we would have scope for further buybacks next year. Lastly, on slide 20, we have given some guidance for Q4 2024 and revised our 2024 guidance, which are non-IFRS and in constant currency. I would note that our EBIT and EPS guidance for the full year has not changed. Given the sales execution issues in Q3, we have taken a more conservative view on our Q4 pipeline. In Q4 twenty-four, specifically, we are expecting total software licensing growth of about 5%. For the full year, we are guiding for ARR growth of 11%-12%, down from about 13%, and now expect flattish total software licensing growth instead of 3%-6%. We still expect EBIT to grow 7%-9%, which gives us plenty of headroom to make our planned investments this year, while also benefiting from our efficiencies program, which we started in Q3. And we still expect EPS to grow 6%-8%. Lastly, we now expect pre-tax sales to grow at least 12%, which takes into account the five percentage points headwinds from the independent investigation payment and the lower forecast total software licensing growth. Our tax rate is expected to remain in the 20%-22% range. As previously stated, we will be revisiting our midterm targets at the Capital Markets Day in November. With that, operator, please can we open the call for questions? We now begin the question and answer session. Anyone wish to ask a question may press star one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. The first question is from Chandra Sriraman with Stifel. Please go ahead. Yeah, great. Thank you. I have a couple of questions. Just wanted to get your thoughts in terms of the conversion rates in geographies other than MEA, where you had some execution issues. Are they back to the pre-Hindenburg levels? That was my first one. The second one, in terms of the guidance for Q4, just trying to get a sense of how conservative you are, given that the SaaS side of the business is growing around mid-single digits. As of now, do you think you're conservative enough for Q4 specifically? Just wanted to get a sense of the various moving parts within the DSL side of things. Thank you. Okay. I will take the first part of the question. So in a way, in the three other geos, in the US for North America, Europe and APAC, our pipeline conversion was in a way more or less the same that we observed the last quarter. No surprise. The surprise came from Middle East, as we mentioned, which was mostly on the execution of the closing of the deals. That in a way we have some last-minute surprises in this conversion of pipeline. But given that, learning lesson from that, and in a way to the second part of your question as well, having analyzed the pipeline in two different lenses. One, all the deals below one million, we apply the conversion rate of the last quarter and Q4 last year and Q4 the year before. And for all the deals more than one million, I'm talking about, in a way, the software licensing outside the SaaS, we review carefully one by one, and this time I was involved personally with the CRO to review deal by deal, in a way, the range and our estimate to be closed in the quarter. So it's a mix between, in a way, conversion rate, to your first part of the question, and one by one on the major deal, and our range is more than one million. And we have reviewed this deal, and we continue to review this deal on a periodic way as well. So it's the reason why, I mean, in a way, it's based on our pipeline, and as you know, in Q4, we cannot create additional pipeline. So it's based on our current assessment of the pipeline and the conversion rate that we are quite conservative. And of course, we have a range of deals that could increase, but it's a balancing act about, in a way, our estimate about the conversion of the pipeline. Hey, Chandra, Great, thank you. Yeah, sorry, go on. Yeah, I think you pointed out the, you know, the main building blocks. So with SaaS being, you know, almost locked in, $57-58 million somewhere there, I think the remaining delta, you know, is what we expect to contract on the licensing side, almost all from coming from subscription. So no change to the evolution there. Okay. Thank you, because that was my... Just a follow-up on the SaaS side of things. You've grown in the first three quarters by around 10%. So, with 57-58, is that locked in and with no overages included, with that could be upside or should be assumed 57-58 is the most reasonable number for Q4 in terms of SaaS? Yeah, this is, I think this is where we should land, as we said back in, you know, after, Q1 results, you know, when we said, full year SaaS revenue would end up at, 9%-10%. That's still valid, and, you are correct, no overages are included in that. Perfect. Thank you. Thank you. The next question is from Frederic Boulan with Bank of America. Please go ahead. Hi, good evening. Two questions, please. First of all, to Jean-Pierre around kind of key priorities. I think last time we discussed, you identified go-to-market as a key focus area initially. Any further thoughts in terms of key investment areas, for you, you know, five months into the job around technology, the breadth of the offering, et cetera? And then keen to understand a bit more what has changed on the software license side. So I get it on MENA, but anything else? I think you guys were pretty confident, back at Q2 about, you know, reaching about 10% growth in H2. Now, we're looking at, you know, in the region of 5% in Q4. So anything else beyond MENA that we should be aware of? Thank you. Okay, so no, basically, Q3 it's mostly focused on Middle East/Africa. Traditionally, we have a significant numbers and new logo coming from Middle East/Africa. As you may know as well, it was driven by our Middle East/Africa leader, I mean, Will Moroney that has been promoted CRO, and basically I asked for Will to come back. Time for us to search our new leaders in Middle East, to review the pipeline, to review the deal one by one, to know, first of all, what's happened, and to make the corrective action as well very quickly. From last board as well, we have made a significant progress on go-to-market operational excellence. One, we have recruited one VP of sales operations that joined us in September. He was working with me in the past as well, based in London, a German VP, and he is in charge to bring the rigor and discipline in our operational excellence. Starting, of course, with forecast and pipeline and larger deal, which is basically absolutely important in regards of what's happened in Q3, but as well, he's working on looking forward on coverage, territory segmentation, pricing, discounting, compensation, et cetera, et cetera, just to bring the right level of standard in our sales execution. And as well, sales to make an assessment about the sales skills and about the sales enablement as well. So a complete assessment and review in a way to elevate the standard of go-to-market. So it's absolutely important. Regarding product and technology, well, we have completed our assessment that we will present in Capital Markets Day. It will be absolutely a good foundation for Barb Morgan as well to start with, and she was part of the final step of this assessment as well to know what kind of incremental investment we need to do to fulfill our twenty twenty-five plan, and more importantly, our three-year plan. So, it's a little bit, it's not the occasion to lay out, of course, what we will discuss in Capital Markets Day, but to your question, Frederic, we have now a good assessment where we are in term of product and technology. Last point as well, in regarding the update, if you remember well, last time I was telling you that we have released some investment for sales coverage in the U.S., and we are middle of the journey. I told you that we would like to complete between 10 and 11 hiring by the end of the year, to be up and running for 2025. We have already hired on the last two months, five reps. They are signing up the working contract with us in the U.S., and we continue the effort as well to be on track for 2025 in term of U.S. coverage. Okay, the next question is from Toby Ogg with J.P. Morgan. Please go ahead. Yeah. Hi, good evening, and thanks for the questions. Just coming back on the Q4 kind of assumptions and the review, just to check: so deals below one million, you're assuming the same conversion as in prior Q4s? Just to check that I heard that right. And if that's the case, what gives you the comfort on that conversion assumption? And then for the deals above one million, gone through one by one, again, what have you assumed here, just in terms of conversion rates, just to give us comfort around that on the Q4? And then just in terms of the MEA shortfall, specifically, what is the current status of those deals that were meant to be closed in Q3? What are you building in for Q4 with respect to the closure of any of those deals that are still in the pipe? Thank you. For your question, so, in a way, as I mentioned, we apply a statistical conversion less than one million, so of course is statistical, but we took into account the dynamic of Q4 last year, the Q4 before, and of course, the dynamic of Q1, Q2, Q3, which is a little bit different. But in a way, I'm pretty confident on the methodology that we have a pretty good conversion rate in regard of the past, and to take a balancing stance as well. For the rest, we cannot apply, to my view, it's my philosophy, a statistical conversion, as we have a couple of binary deal as well, and in a way, we need to go really one by one. The change of methodology here, that we did that very early on the quarter, we mobilize as well of the executive resources to help to close this deal. As well, it was a more bottom-up approach coming from the reps for the sales representatives themselves. I would like to avoid to have all the stacking of management, which is, in a way, believe what the other manager will say and the other manager, and then at the sales account manager, the need really as we are on Q4 as well, is the end of the commission for many of them, as we have annual plan of commission. To know exactly where we are, to go... one by one about the risk and exposure of each deal, and to make our judgment about how many of these deals will be closed, and of course, it's not an exact science, will be closed in the quarter, balancing the risk and the opportunity. Yeah, Toby? Yep. On your last part of the question, clearly we were expecting a lot more than ultimately the miss to the consensus, you know, on the licensing side of $3-$4 million. I think it's fair to assume that a considerable part of those deals have signed in the first few weeks, but clearly we're taking a conservative approach, given what happened and, you know, also listening to, I would say, the new paradigm, the new philosophy we are implementing now. Understood. Thanks a lot. The next question is from Sven Merkt with Barclays. Please go ahead. Great. Good evening. Thank you for taking my questions. Just a few on the efficiency program you launched. Can you speak a bit what is behind the program? My sense was always that Temenos was rather underinvested, at least in some areas, so what layers and what complexity are you trying to address here? Can you also then quantify the size of the program in terms of cost savings, but also the restructuring cost? And then maybe finally, I know we will hear more about this at the CMD, but how should we read the efficiency program regarding how you plan to balance growth and profitability? Yeah, thank you for your question, sir. In a way, we have launched two-step of the program. The first step, what I call a linear organization, and we work on the span of control. I already, I mean, mentioned that last call as well in July, and I'm very pleased with the progress we have made. To give you numbers, we started with 1,157, eleven hundred fifty-seven managers, and as we talk today, we have 760. So we went down close to 400 managers less. That doesn't mean that we lay off the 400 managers. As many managers, they have one or two reportees, and they were mostly individual contributors, and I'm working with our Chief People Officer as well to create two distinguished career paths, one for the people manager, and the other one for the individual contributor, based on expertise in each domain as well. In terms of stacking of layers, we came down from 11 layers, as the worst case, between me and individual contributor to nine. I would like to go further and to go to seven. But I have to say that it has been done without any waves, without any restructuring plan, and we will continue to do that, not only for cost saving, and Takis will take this point, but as well to give to our manager more empowerment and more accountability. I was mentioning what's happened in Middle East is clearly that we have an MD in Middle East, and we have four, five layers between the MD and the sales reps. So at the end of the day, that is not helping with the accountability and empowerment to and it's a clear lesson of what we are doing is going to the right direction. I can say that as well for the product and technology and accountability as well. So I'm pleased with the progress, but not fully satisfied. We need to go a little bit further. Yes, Sven, let me take the rest of the question. So in terms of you know costs, as you have seen with these restructuring costs by seven million, that's due to you know the efficiency program we have started. It's really about going through the entire company, as Jean-Pierre said, you know the complexity in terms of management layers, sometimes you know metrics, organization, overlays. So this is you know across the entire company, whether it's product, sales, GNA. So this we have initiated. We have made some good progress, and clearly there is more to be concluded by the end of the year, when we want to be you know in the the target state. And for this you know these are the the restructuring costs. In terms of savings, so far this year, it's you know mid-single digit number. By the end of the year, we'll probably be quite a bit higher, and as the savings come you know first, and the investment you know, we're not holding back on investments. You know, this is something which clearly is helping the bottom line, as we have seen on the EBIT. Now, going forward, I think the... You know, not wanting to preview what we're gonna talk about in November, but as a principle, and we have started this already you know last year, and even before, there is a lot more entrepreneurial mindset at Temenos, i.e., self-funding is you know the name of the game as a primary approach, and then-... You know, once we have exhausted, you know, all these efficiency savings, and then there is a lot we can still do. Imagine we just started and already found a quite sizable number. So clearly, self-funding is principle number one, and the rest, what is required, is gonna be incremental investment. Yeah, but clearly, you know, we should, we're still targeting a very, a very profitable growth model also in the future, and as we, as we, you know, mentioned in, in July already, there are a lot of areas which so far have been untouched, and we're looking at every single, every single item in the company, no stone unturned, and clearly there is a lot, a lot to do and a lot of potential here in terms of savings. Great. Thank you for the details. The next question is from Laurent Daure with Kepler Cheuvreux. Please go ahead. Yes, thank you. Good evening, Jean-Pierre, good evening, Takis. Also, I have two questions on my side. The first one is on your cost in the third quarter, down 1%. So it's the second quarter in a row where even if you are now targeting lower sales for the year, you manage to keep your EBIT at the same level. Could you try to break down your cost evolution between the underlying cost growth, efficiency program and the variable comps component? So any granularity on this would be very helpful. And the second one is on the SaaS ACV. You briefly alluded to potential deals that were coming. It's true that in recent quarters, your ACV in SaaS was below $10 million. Does it mean that your aspiration is to return to a few quarters with an ACV, let's say, back in the past fifteen or twenty million? Thank you so much. Okay, let me take the ACV question first. You know, let's get Q4 done, but clearly, from today's view, it should be a very strong quarter. Comparison base, relatively easy, so yes, it's gonna be a very healthy double-digit number. We don't wanna look into the future, given the volatility we have seen in the past, but you know, I think there are. This is evidence that you know, there are large deals happening on SaaS ACV as well. Given the you know, the lengthy sales cycle also for this one, you know, it's difficult to time, but you know, we have very good visibility on larger deals now. For on the cost evolution, the year-on-year cost evolution, minus 1%, I think what you should still you know consider, and it's a good part you know of keeping costs flat and still be able to do investments is you know our services costs, which have come down quite a bit. You know, we we delivered what we said, getting all those red projects live in over the last months and moving to a different implementation model, yeah, much less you know externals to be used. So that clearly helped. Now, on the costs, I think it's probably helpful to look at it on a LTM basis. We have, you know, the cost base growing 2% there, and when you exclude services, which clearly was, substantially down, you know, sales and marketing costs were up, 7%. You know, overall, product costs grew 4%. So there is growth, you know, in those areas which we, have been targeting. Yeah. So there is nothing holding back, in terms of, you know, investment, as Jean-Pierre, explained. But, you know, cost efficiencies, you know, kick in immediately. Clearly given also there, you know, that there was, you know, not hitting our targets, you know, there were, a bit less, variable accruals on, commissions and bonuses. But overall, you know, I mentioned the cost savings impact, from the efficiency program. You know, you add services costs, you add the investment, and you still arrive, you know, at this current cost base, and we haven't changed, you know, the cost base for the full year, yeah. So, you know, from Q3 to Q4, we're gonna see, you know, substantial investment as we have seen a substantial cost growth, as we have seen, you know, in the past always. You know, variable is gonna be 20 million higher quarter over quarter. You know, investment, you know, 5 plus million, clearly travel and so on. So we're not holding back, it's definitely really the efficiencies providing room for maneuver. If I may add something, Laurent, that second part of the efficiency is about being fit. We need to keep our muscle intact and to limit, to eliminate fatness. Maybe to give you a concrete example- ... we have, if I take the sales cost, we have only 20% of our cost, which is individual quota carriers, and the 80% is overhead, manager, I mean, helper, et cetera. So it's not the question for us to reduce the overall cost, but to rebalance as well between quota carriers and helpers. And if I take a parallel with the product organization, to have, in a way, more developers, more architects, and less helpers, at either perimeter, more or less. So it's basically the second part of the program. I think we touch base the easier one, which is the stacking of layers. The second part is to have a fit organization, in a way to reinvest in the key contributors of the growth of the company, which is no rocket science in the software industry, which are developers and architects in one side and sellers in the other side. Jean-Pierre, the point I was getting to, to be clear, is when you look at 2024 as a whole and the variable remuneration, I was just checking if there was no specific headwind for next year, if you were not holding back a bit, bonuses and things like this, and that to protect your earnings and that you have the negative impact next year. We're not holding back, you know, anything in that respect. You know, for in our cost projection, which is part of the guidance underlying, we have, you know, the normal bonus accruals for staff in there. So, no, we won't, you know, from that perspective, we won't have, you know, any specific headwind from next year. Thank you so much. The next question is from Adam Wood with Morgan Stanley. Please go ahead. Hi. Good evening. Thanks for taking the question. I've got two, please. Just coming back onto the ACV number, that's obviously been running weak for, I think, five quarters it's been down. Is the suggestion here that this is just very significant lumpiness, and these are bigger deals, and they kind of come in when they come in, or, or is there something that's changed, either in your kind of go-to-market approach or in the market? I think in the past, you've talked a little bit about the fintech exposure in that space, that's maybe hurt you. Is that recovering? If you just give us a little bit more insight into what's been going on there and what's changed to drive that expectation of a much better fourth quarter, that would be helpful. And then maybe just coming out bigger picture, the IBS league table obviously suggests that there's not a competition issue here, but the growth, I imagine, has not been where you would have liked it to have been over the last few years. Is the issue, you know, where would you say the biggest change is that you can make? I mean, is it getting the message out to the target banks that core banking is the right way to transform the business? Is it expanding the available market, whether it's North America or Tier 1s or whatever? You know, is there one particular area that you think you can address that kind of issue of the disconnect between a product that seems to be leading in its field, but growth, I imagine, not where you would want it to be? Thank you. You take ACV? Yeah. Let me take... Hi, Adam. Let me take the ACV question, and then hand over to Jean-Pierre. So, yes, fifth quarter in a row, which we, you know, have. We're not getting where we wanted to be. However, there were various impacts on over the last, let's say, twelve or eighteen months. One, as you correctly pointed out, you know, the funding environment for fintechs, you know, neobanks, clearly it was quite difficult second half last year. It continued this year. It's looking to stabilize. So that's clearly helpful. If I look at the you know, deals signed and also the deal pipeline, it's improving from the fintech perspective. But I would call those business models more established, and I think this is where you still get funding if you have a viable business plan. Yeah. So some of those deals now we're seeing coming in in Q4 are from fintechs. I would still not say, you know, something fundamentally has changed. Clearly, we understand a lot better, you know, the requirements from a client's perspective. DORA, especially in Europe, is better understood, going live in January 2025. So I think we have reached, you know, the trough level in terms of SaaS ACV. Larger deals, yes, there are larger deals in there. One of them, as I said, expected to sign shortly, but I would not take this one as a harbinger of something fundamentally changed. But clearly, I would say need neutral to positive in terms of the fintech world. Let me add one thing on that as well, that the level of confidence, both externally and internally, about our SaaS Foundation, is increasing. As you may remember, we have announced SaaS Foundation in last TCF as well. And we have, for instance, signed our first SaaS Foundation client in North America, and this project took only 6 months from signature to go live. And in a way, we went go live early October, and within 5 days, they opened over 17,000 accounts and capture over $15 million in deposit in less than 5 days. So in a way, that makes me optimistic as well about the fact that we can really, I mean, invest on SaaS Foundation. The market demand is there, as you know, mostly in the U.S. and Western Europe market, like in U.K. The progress we have made in the architecture and the enterprise services on top of that made me confident. And once again, this example of a U.S. customer, which has go live in six months, is encouraging me, but not only me, the internal team as well, and our partner, to invest on SaaS foundation and enterprise services. We are optimistic for Q4 as Takis mentioned, but even more importantly for the next year as well to continue to be bold on SaaS, and to capture the market demand. On the second part of your question about what we can do differently. It's, in a way, it's really basics. The reason why we are here, I mean, a new VP of sales operation, that I've done that for more than 20 years in the software industry, is to put in place the right basics about pipeline forecast, large deal review, to engage our value engineers as well, to deliver value to our customers, to engage partner, to make sure that we have the right implementation services project as well in place, and structurally speaking, to have better sales coverage, territory segmentation. In a way, as I mentioned earlier, we have 20-80 between quota carrier and the rest of the sales team. So we need to increase significantly our quota carrier. When I say that, in the range of 30-50% of sales capacity, and in a way to reduce the rest of the helper. If we are doing that right, we attract a couple of talent. We have launched a search in Middle East Africa to replace our leaders. We have just appointed a new leader in July, in America as well. So if we are doing only basic things, I'm not worried about the market demand, and our win rate is pretty spectacular. We will, in a way, I liked a couple of win rate in Capital Markets Day, for the publicly won deal of the last 18 months as well. We continue to have a very good competitive position as well, mostly on the best of breed for corporate banking software. It's just a matter of sales execution for the short term. For the midterm, again, we are working on product and technology to have the right pool of investment to sustain our growth for the next three years. It's very helpful. Thank you. The next question is from Knut Woller with Baader Bank. Please go ahead. Yeah. Thank you. Two questions. First, on Europe, which seems to have been down quite noticeably in terms of total software licensing in the third quarter. Can you provide some color here, what's happening, and when you expect Europe to recover? And then lastly, on press reports regarding a large project I think you announced with Julius Baer in twenty fifteen, can you just provide an update here? Is Julius Baer's the project here, harmonizing all software components on the back of Temenos software in all regions? Or has the press reports been wrong with that regards? Thank you. Hi, Knut, let me take those. First on Europe. Actually, the Europe performance was broadly in line as budgeted. You know, I would not read into... I would not read too much into the quarterly volatility. Clearly, we have seen a good evolution from the past, expect a good performance also in Q4. Yes, true, Q3 and Q4 last year were, you know, good comparatives for Europe, so it looks maybe that they're, we're losing anything there. But, you know, the performance in Europe is as expected. As you know, we have a new leader there in the start of the year, who is executing on these things which Jean-Pierre mentioned. So, nothing new or special, or abnormal in Europe. On your second question, what was rumored or was stated in a blog, what we can say, and this is always limited, but clearly, Julius Baer remains a very important client of Temenos, and is using Temenos software across various geographies. So I think the negative part is definitely not true. On the positive angle, I cannot comment. Okay. Thank you very much. I was visiting Julius Baer, I mean, three weeks ago, so I can fully confirm what Takis was telling you. Thank you, Jean-Pierre and Takis, for clarifying that. The next question is from Justin Forsythe with UBS. Please go ahead. Thank you very much, Jean-Pierre and Takis. Appreciate the question here. I've got a couple, if you don't mind. So- ... I guess the first one relates to more near term, which is, I think we've heard for the last several quarters that there were missed deals in the last few weeks of the quarter, that were then signed in the first few weeks of the next quarter. But we kinda continue to seem to guide down on TSL guidance and miss on TSL guidance, related to, it seems like more deals being pushed than are being signed in those first few weeks. So just kind of trying to square those two comments and the moving pieces there, and what, and what's causing that dynamic to exist? I wanted to also ask secondarily, about how do we think about modeling the subscriptions and licenses line going forward? Because it seems like this is, and it has been driving the majority of the P&L volatility that we've seen over the last several years. Inherently, it's difficult to predict, and we don't have really a KPI, such as sales pipeline or conversion rates to go on. So how would you suggest investors and sell side analysts think about modeling this going forward? Thanks. Okay. Hi, Justin. I think on total software licensing and, you know, appreciate your comment. I mean, you know, we have, in Jean-Pierre coming in, we, specifically also did not mention, you know, any, you know, Hindenburg impact or anything, or lengthening of sales cycle. So I think you need to, differentiate between what, what happened in, in Q1, Q2, and, you know, clearly today, what we announced. And as Jean-Pierre mentioned, you know, this is, nothing about the market, nothing about, competition. Really, basically getting our act together and implementing, you know, best practices, which Jean-Pierre is doing, so that we don't get into this situation, going forward. Yeah. And, you know, we're being transparent, as you know, Middle East and Africa is, is an important region for us. It's a large region. It's, to a large extent, on-prem business, so very little in terms of SaaS revenues. So any deviation there, and this is why we acted very quickly, has an impact on total software licensing, and we're trying everything to, you know, not have this come up again, you know, under the leadership of Jean-Pierre. The modeling of subscription, I think, is a bit unfair, because ultimately the accounting of subscription is the same as term licenses. So, you know, as far as I can remember, there was always volatility even before subscription was introduced in 2022. I think we'll provide, you know, some guidance on, you know, the next few years, and how we see subscription evolving. But clearly, by the end of this year, you will have very little term license left, contributing in our P&L. So, you know, we don't sign. Whatever is left in the pipeline is still a bit off term, but, you know, new deals coming in, this is subscription. So clearly subscription will provide market data, and subscription, which is gonna be, a very important driver in the future, you know, whether it's mid, high, whatever digit, we'll share. But, you know, I think as long as the accounting is unchanged, this will remain like this. Now on the, yeah, on the volatility, clearly there is still a business which is, you know, depending on the last few weeks of every quarter, so nothing has changed there. And if you have larger deals in there, you know, which, you know, can move around, on a 12- or longer sales cycle, I think this is, unfortunately, part of something which, we try to mitigate as good as possible by building in enough cushion in our guidance. I think we can, we can do and will do better. Maybe just to complete the answer, Justin, as you know, we have more or less today 75% of our business, which is predictable through professional services, maintenance, and SaaS. So we have still the remaining 25%, and in a way, in some geographies as well, there is more than 25%, because they are mostly stuck on on-premise as well. And specifically in Middle East and Africa, we are highly dependent on new logo, and as well, which is a process, is more difficult to control, as in many times, it's the first time that the sales team is facing the procurement process as well, and the level of approval for different people. And I do think structurally is the reason why I mentioned as well the new sales operation. And we need to bring more pipeline, because you know when you have a pipeline which is limited, you have a tendency to over predict on a lower pipeline as well. And this pipeline sometimes is lacking of sales cycle as well, coming to the last moment. So in a way, the root causes are more about pipeline and dependency on larger deal on new logo. So how we can avoid that, to have a better, I mean, predictability for better pipeline, more sales on the streets, and better control as well. And structurally, over the next three years, reduce our dependency to software licensing versus the rest. And is the reason- Got it. Why we are, we are bold on SaaS. We don't have this issue in the US, to be honest, because in the US, they are mostly SaaS today. Got it. Thank you both. That's very helpful. Appreciate it. Ladies and gentlemen, that was the last question. Thank you all for joining us. Of course, we will, as we did, as I did last quarter as well, we'll make some one to few or one-to-one meetings, in the next day. We will be happy to welcome you in Capital Markets Day in London on November twelfth, for more long-term view about our business. Ladies and gentlemen, the conference is now over. You may now disconnect your lines. Goodbye.