Temenos AG ($TEMN)

Ladies and gentlemen, welcome to the Temenos Q1 2026 Results Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] 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 Q1 2026 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 Q1 '26 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 U.S. As we discussed at our Capital Markets Day, we have a strong pipeline of deals in the U.S. 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 timing given the complexity of the deal process. But I'm confident we will convert the U.S. 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 for 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 million 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 products. I'm also pleased to announce the hiring of our new CFO, Daniel Schmucki, who will join us on August 3 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 base growth from investments we made last year, offset by strong revenue growth in Q1 2026. And lastly, we have reconfirmed our 2026 guidance and 2028 targets. Moving to Slide 7. I'd like to highlight some of the key deals with clients in the quarter across different geographies and peers. 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 South, we extended our partnership with a digital arm of a leading bank in GCC, and we signed with a leading bank in APAC for core, 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 capability. Turning to Slide 8. 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 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 2 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 as Temenos a Power. Moving to Slide 9. 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 2 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 moat is strong. 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 0 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 life cycle and support customers with AI 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 road map 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 products. 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 1 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 entropic in our product teams to enhance our software development life cycle. I will now run through our Q1 2026 financial highlights, focusing on constant currency, non-IFRS financials. On Slide 13, we delivered strong ARR growth of 13% and despite the headwind from the BNPL client that move of 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 sales 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 sales grew 12% in Q1 '26 and 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 sales in particular. Outside of EMEA, we also saw broad-based growth across client ears 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 EPS 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 was more than offset by the strong revenue growth and benefits from efficiency gains in the quarter. Pro forma 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 and 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 nonoperating items on Slide 17. Net profit was up 19% in Q1 '26 and EPS grew 20%. Our EPS continues to benefit from the strong growth in profit and the lower share count from the shares canceled at last year's AGM from prior buybacks. We saw an increase in net finance charges and exit 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 1.3x and comfortably within our target range of 1.0 to 1.5x. Turning to Slide 20, a few comments on our debt leverage and capital allocation. We completed our share buyback program for a total of CHF 100 million 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 for CHF 250 million completed in August 2025. The shares purchased in that larger buyback are to be canceled at the AGM in May this year. Our reported net debt stood 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 road map and using share buybacks to ensure capital efficiency and enhance shareholder return 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 our strong first year of execution confident in our strategic positioning and good visibility. Operator, please can we open for questions.

[Operator Instructions] Our first question comes from Charlie Brennan from Jefferies.

Congratulations on 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 quarter has come from Middle East and Africa, perhaps 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.

Charlie, thanks for the question. So maybe first on, I think, the situation in the in the Middle East. And clearly, when they started at the end of February, like everyone else, we're worried about the safety of our people. So we went into this like 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 in Middle East and Africa. These are, let's say, large regions broadly balanced in terms of contribution. So both the Middle East and Africa, with Africa having seen in the past, quite strong growth stronger than the Middle East. We have, 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 there was some limited disruption of travel at times, we should note. And if you look at the situation on the ground, governments are putting enough significant resources and everything they can to keep business operating as normal. This is what we saw throughout March. So yes, no impact seen in terms of negative impact in so far, either on pipeline generation or conversion rates, and this is what we have seen also in the first few weeks in in April. Now looking at the other regions. I think on specifically the Americas in U.S. developed actually as planned. Lat Am as well. Europe was probably also in line where we saw some, I think, because we had a tough comparison base with Asia Pacific. But overall, I think the performance was pretty much in line what we expected. We didn't -- I think we didn't save deals or anything for Q2. So nothing actually specifically to call out in terms of the regional performance.

The next question comes from Frederic Boulan from Bank of America.

If I can ask a question on the revenue guidance. we have subscription and SaaS growth of and in Q1. You've kept full year guidance and change at around 9% to discuss any specific phasing we should expect or specific points? And maybe we can also extend that question to the the EBIT guidance, 20% in Q1, guidance of 9% for the full year. So here as well, I mean, any specific items we should have in mind? Or is there a guidance framework prudent at this stage.

Thank you, Fred. So on guidance, I mean, we've never raised guidance after Q1 is like every year, the smallest quarter, there are still quite a number of uncertainties out there on the macro side. 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 sales and maintenance and services. So across the board, we invested as planned. So the upside, ultimately on the growth came really from stronger top line, demonstrating the operating leverage Yes, we're tracking I had on our KPIs, Q2 is a bit of a more difficult comparison base. Let's see where we are up then. So for now, I think it's the right prudent approach.

The next question comes from Toby Ogg from JPMorgan.

Maybe just bigger picture one. we've obviously seen over the last couple of quarters, better momentum, and that's obviously been translating into upward revisions to expectations. When you take a step back what do you think are the key drivers that have been yielding that upward momentum?

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 terminals across the organization, clearly, accelerating on the product road map, 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, stable sales environment, 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 -- if you want the stable sales environment, coupled with a more determined more focused organization is clearly something that's helping us. on top, and this is 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. 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 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, which where we need -- where we want to have dedicated resources driving those deals end to end. And this is across the regions, and this is across the tiers, not just Tier 1s. So this is. Again, you need to invest ahead and read them the benefits, and this is what we are seeing and obviously is driving for more.

The next question comes from Grégoire Hermann from Barclays.

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?

Grég, so as we said at the start of the year, there was 2, 2 months ago when we initiated when we issued the initial guidance for 2026, we set the pipeline coverage is there for delivering those numbers, also stating we want to be proven. So 2 months down the road, as you would expect with more 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, yes, not all of them need to come. So we're confident that we can we can grow our South and subscription as well also in Q2 despite the yes, tougher comparison base.

The next question comes from Mark Hyatt from Morgan Stanley.

I've just got 2, please. Firstly, if we just touch on the maintenance side of things. Obviously, you called 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 would be really helpful. And then secondly, maybe just a picture question on AI. Could you talk about what you're hearing from bank C-suite members today on the AI type priorities? Are they still mainly focused on productivity uplift 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?

Mark, so on maintenance, yes, 15% growth was a bit ahead of the full year growth rate we have envisioned. We said about 7% to 8%. But you need to think about its Q1 '25, which post a relatively benign comparison base, which is going to become incrementally more difficult to lap. And 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, yes. So that helps basically with -- on the renewal of these maintenance offerings. Overall, I'm not going to -- I can't give you that level of detail, how much opportunity there is still there. But clearly, we are -- it's still a very small part of our overall maintenance number. And therefore, I think the growth will continue. I think with 7% to 8% for the full year and not clearly growth rates probably coming down into single digits for the rest of the quarters. I think this is the phasing we would see. And then longer term, to '27 and beyond, we said about 6% -- 5%, 6% is the right number. Again, let's say 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 2 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 Akamai. And this is where we're going to launch a number of new ideas and number of new products this year. What we do with our clients, with our banks, is to 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 specifically, we're not the ones to basically do the custom development of that. But if we find AI use cases like FC and AI, 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 that are asking us, and we're developing some ideas, trialing some ideas, both ourselves but also with partners can you, with the help of AI help us accelerate the implementation time line, 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 that 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 it's still early to talk about.

The next question comes from Pavan Daswani from Citi.

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 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?

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

The next question comes from Mohammed Moawalla from Goldman Sachs.

Congratulations on the quarter. I just wanted to concentrate a bit on North America. I know sort of 18 months back with regard to capacity. We've obviously been bringing some of our own can you give us a sense of sort of the pipeline? I know you touched on potentially some larger deal wins to come. How is in the North America kind of out -- and more importantly, obviously, in terms of the specialty mobility for North America, are you focusing more on that kind of Tier 2 regional docs and credit unions versus a very long sales cycle kind of Tier 1 deals.

On the U.S., so we have seen and we continue to see good progress on a number of a lot of deals through the pipeline, as you would expect. Now given this is all new logos and new procurement, it's usually difficult to quantify the time until really you have from being selected until you have the contract signed. But this is what's driving the pipeline and where those deals stand this is which is driving our confidence that they will get converted in 2026. Now if I look at the pipeline overall, 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 our confidence in the U.S. Now what we see is given we hired a lot of salespeople, 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. The other thing which we didn't do before is investing upfront in not just go-to-market, but also the support organization and the backbone. And this is something clients want to see there happening because this is -- these are long-term decisions they're taking in the core space. So I think where we still have opportunities, 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 moved away from our target market in the U.S. It's still the lower Tier 2, Tier 3 market. As occasionally, you get also Tier 1 opportunities. But clearly, 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, we're feeling very confident about execution of the pipeline.

The next question comes from Justin Forsythe from UBS.

Congrats on a good start to the year. Just a couple of 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 and 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? And 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 you 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.

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 had the -- more recently, the faster growth rates, yes. So if you look back at some of the last few quarters, yes. 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 Middle East and Africa has been a strong performance over the last couple of years, 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 or a deterioration for the rest of -- as we've shown on one slide, we're doing everything in Middle East, yes. It's also picking up in terms of SaaS. We signed this Tier 2 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 would 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 across the products we see for Middle East. On your second question, it's quite an interesting one. So well, I think we see wealth for especially the larger banks. We're especially dominant and playing in the high-end, ultra-high net worth piece. So that's for the wealth opportunity. If you look at pure core, it's mainly retail and corporate. What I would say is the last few years, so post-COVID, you saw a lot of demand for retail because this is where banks felt the pressure from basically the nonincumbents with price pressure. So they needed to lower the cost so their investment was first and foremost in retail because they wanted to protect their offering their profitability. I would say in the last 2 years, because they basically thought of the nonincumbents to a large extent. Now there -- their 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 nonincumbents 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 2 years.

The last question comes from Josh Levin from Autonomous Research.

Just 2 questions for me. Takis, you said there's no visible in -- can you hear me?

Yes, we can, Justin.

Yes, we can.

Yes, you said there's no visible impact so far from the war in the Middle East. But if the low user 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 Temenos is to that? 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 on 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 lessons so far, any successes, anything that's unexpected from that? I know it's a key part of the U.S. strategy.

Josh, yes, unfortunately, we don't have a crystal ball here at Temenos. So we take a prudent view on uncertainty and macro risks coming back to the Q1 performance and the guidance. So what we believe is, and this is the lessons learned from the past, if you see as long as you see only our short-term disruption to anything. So short term being a few months, there is maybe a lower likelihood for a recession. If this keeps going and lasting well into, I don't know, Q3, the second half, then probably you would expect to see an impact on overall GDP growth and maybe a higher risk for global recessions. What we have seen, again, in the past is sometimes countries ticked into like technical recessions without any impact on demand for our software, yes. So we're not -- we have not been benefiting in upward cycles if economies were booming, but also being less affected in, let's say, more recessionary environment as long as there is no massive external event like GFC -- or C (sic) [ GCC ], so for now, the way we look at this is obviously being very alert on what's happening day to day. Again, 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 yes. 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, 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. It's we do a lot of 1 or 2, ultimately, a lot of U.S. product-specific development there, which is obviously also resonating well with clients. We're now about 70-plus people and we'll keep expanding there because, yes, 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 the progress in Orlando.

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 results.