Thank you for standing by. Welcome to the Temenos Q1 2019 results call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star one on your telephone. I must advise you this conference is being recorded today, Tuesday the 16th of April, 2019. I would now like to hand the conference over to your speaker today, Max Chuard, CEO. Please go ahead, sir.
Good afternoon. Thank you for joining today's call. I hope you've been able to access our results presentation on our website, which we will be talking through on this call. I will start with some comments on our Q1 performance. I will hand over to Takis for an overview of the financials before giving some concluding remarks. Takis joined us at the start of this month as our new CFO. I am delighted to be doing our first of many quarterly results together. Starting on slide seven. I am pleased to say, as my first quarter as the new CEO of Temenos, that we had a very strong start to the year. The urgency for banks to change their IT has never been greater. Digital, regulatory, and cost pressure are intensifying and forcing banks to adapt and modernize.
It is only through an end-to-end transformation that banks can become truly digital. We are capitalizing on this momentum and demand as the leader in our market, driving significant growth in revenue and profit. In Q1, we delivered total software licensing growth of 28%, which is a very strong performance given we grew total software licensing by 35% in Q1 2018. Total revenue grew 23% and EBIT grew 27% this quarter. We also had very strong cash generation. We continued to bring our DSO down by another six days. We also announced some very exciting deals with ABN AMRO for Temenos Continuous Deployment, and with Al Rajhi Bank for its digital transformation to enhance its Islamic lending and financing product capabilities. Al Rajhi is a Tier 1 bank and the largest Islamic bank in the world.
Our view on the market dynamics is supported by leading industry analysts like Jost Hoppermann from Forrester Research, who shares this sense of urgency. Jost recently commented that if banks don't modernize with an end-to-end solution in the next five to seven years at the latest, they will face huge challenges. IT spend for banks is strategic and not discretionary. If they want to do more than just survive the next decade, they have to invest in IT renovation. On slide eight, I would like to give you some color on our sales performance in the quarter. The demand in Q1 was broad-based across regions, tiers, and products. We see similar pressure on our clients across all the geographies we operate in.
The challenges of open banking are particularly concerning for our clients, with diverse competitors, increasing regulation, cost pressures, and greater demand for personalized experience, forcing banks to look at the IT and consider how to adapt to a rapidly changing market. We had a strong contribution in the quarter from our installed base as we continue to focus on growing our share of wallet in our existing clients. We continue to see very good demand from tier 1 and tier 2 banks, which contributed 53% of the mix over the last 12 months. We also continued to take market share and win the majority of new competitive deals that came to market. We are able to do this as we are the only vendor with the winning combination of complete package functionality, localized Country Model Banks, and advanced and agnostic technology.
We won 22 new customers in the first quarter, and a number of these were for our SaaS offering. Lastly, we continue to invest in sales and marketing to ensure we have the right teams in place in order to capture the market opportunity in front of us. Turning to slide nine. We are seeing strong incremental growth in demand for SaaS and cloud adoption. Our Total Contract Value over the last 12 months had reached CHF 66 million by the end of Q1, an increase of over 6 times, and SaaS revenue grew by 71% in the quarter. Banks see multiple benefits from using the cloud, including de-risking and accelerating the implementation process, saving costs through elasticity as infrastructure automatically scales up and down to meet the demand, and benefiting from the highest level of security and multi-cloud resilience.
We see demand for cloud adoption across all geographies and tiers, with some very large institutions looking to optimize delivery by using the cloud, as well as ultimately deploying and running in the cloud. We have a highly differentiated offering with the launch of our new product, Temenos T24 Transact and Temenos Infinity. These products combine market-leading banking functionality with cloud-native and cloud-agnostic technology. We are the only vendor with the winning combination of complete package functionality, localized Country Model Banks, and advanced and agnostic technology. Our traditional competition lacks the modern technology platform, and the newer cloud-based vendors have more limited banking functionality. On slide ten, I'm pleased to report that the integration of Avoka is progressing very well. Avoka specializes in customer acquisition and onboarding and has been integrated as part of Temenos Infinity, our independent digital front office product.
We have already won some key deals with Avoka in Q1, including with a Tier 1 European retail bank that is an existing Temenos client, and a major U.S. regional bank. We are successfully cross-selling the Avoka product into the Temenos client base, in particular on the back of the Temenos Community Forum, and this is opening up opportunities in many geographies. On slide eleven, we continue driving growth in the number of third-party consultants available to implement Temenos software, having already reached over 5,000 by the end of last year. Our industrialized training platform, that we call the Temenos Learning Community, has been a key part of this and is seeing great traction with partners and clients.
We had 20 implementation go live in the quarter, also announced our new implementation methodology for large and complex institutions, Build and Renovate, which we have developed from our extensive experience of taking thousands of banks live on our software over the years. The majority of implementation costs and complexities come from integrating new software with legacy systems. Build and Renovate enables the largest banks to quickly create a new, fully digital stack and to continuously migrate products and customers across from the legacy systems, removing the need for integration. We can do this through our rich functionality, our package approach, and our Country Model Banks. This will dramatically decrease the cost and complexity of implementation for our largest clients and speed up the time to market.
Moving to slide 12, I'd like to share some of the highlights from the Temenos Community Forum, which we held earlier this month. This is our annual client event, we had nearly 2,000 people from across the Temenos community attending, making it our largest TCF ever. We made a number of very exciting announcements at the event, including formally launching our new products, Temenos T24 Transact and Temenos Infinity. Temenos T24 Transact is our next generation core banking software. It takes the deep and extensive banking capabilities of Temenos T24 core banking and replatforms them onto a new cloud-native and cloud-agnostic platform. Temenos Infinity is a comprehensive omni-channel digital banking product ready to be deployed independently or integrated with Temenos T24 Transact. Temenos Infinity is powered by APIs, enabling banks to easily connect Temenos Infinity to any core banking system, obviously to Temenos T24 Transact.
We also announced the Temenos Data Lake. With this product, banks can now store and process all the data from one single source. The data can be both structured and unstructured, as well as blended with any external data source. By using multiple data sources, banks can leverage our technology to gain valuable insights into customer behavior and tailor recommendations using AI. For the last few years, we've been using DevOps capabilities internally to improve the speed of testing and releasing software. We've now made it available to our customers in the form of Temenos Continuous Deployment. This is packaged software that dramatically accelerates testing cycles. Banks can provision a complete new environment in minutes rather than the days or weeks it would typically take.
As I said, no other vendor has a winning combination of both packaged functionality with more than 100 countries of localization, revolutionary cloud-native and cloud-agnostic technology. We are the only clear leader in both functionality and technology. On slide 13, I'd like to spend a minute on one particular deal we announced in April. Three Finnish banks have selected Temenos T24 Transact and the Temenos Payment Hub for their digital transformation. The unique aspect of this deal is that they'll be using a shared banking-as-a-service platform that will be implemented and managed by Cognizant. This provides a very efficient and cost-effective way for banks to modernize their core banking systems. We plan to offer this banking-as-a-service platform in Finland at first, then to roll it out across the Nordic region. We also have the opportunity to replicate this platform model with other partners across other geographies as well.
On slide 14, I'd like to share some thoughts on how our market is developing. We continuously invest in our products and innovation, which means we're able to address an increasing amount of bank IT spend over time. Today, our total addressable market is estimated to be $57 billion. An increasing amount of this is being spent with third-party software vendors like Temenos, as banks are under intense digital, regulatory, and cost pressures. Temenos has a leadership position in the market as the number one vendor of packaged, integrated, and upgradable software that can be run in any environment the bank chooses. We are also benefiting from our broad product portfolio, which give us multiple drivers of growth. We've seen a significant increase in demand for SaaS and cloud adoption. We also have good momentum in the U.S. with multiple wins in the last two quarters.
This is further strengthened by the acquisition of Avoka, which has already generated new deals and leads. We are confident we can deliver sustainable growth in the medium term through the strength of our pipeline and the committed spend we have from existing clients, in particular Tier 1 and Tier 2 banks. With that, I will now hand over to Takis to take us through the financials.
Thank you, Max. Good afternoon, everyone. Before I start, I would like to say that I'm honored and excited to have joined Temenos as CFO at the start of this month, and I look forward to meeting many of you over the coming months on the road. Moving to slide 16, I will walk you through the financial highlights of the quarter. As Max said, it was a very strong start to 2019, with total software licensing growth at 28%, driven by growth-based demand across geographies and tiers. The strength of our license sales drove maintenance growth of 13% in Q1. Total revenue grew 23%, and we delivered very strong EBIT growth of 27%, with an EBIT margin of 24.1 for the quarter. We also delivered strong EPS growth of 24%.
We generated $65 million of operating cash flow in the quarter, an increase of 19% year-on-year, and our DSO declined by six days or eight days pro forma, excluding the impact of Avoka, reaching 111 days at the end of the quarter. Lastly, our services business continues to perform very well, benefiting from the growth in our partner strategy with our services margin reaching 9.1% in the quarter. On slide 17, I will highlight some of the most important numbers for the quarter. I would note that with the adoption of IFRS 15 at the start of 2018, we have now moved to showing years to date rather than last 12-month comparisons, as we did not restate our 2017 actuals under IFRS 15. Our total software licensing grew 28% at constant currency in the quarter. Total revenue grew 23%.
We are benefiting from our growth-based range of product offerings across Temenos T24 Transact, Temenos Infinity, Wealth, Payments, Fund Management, and SaaS, meaning we have more levers of growth than ever before. We have strong operational leverage in the business, which drove our EBIT up 27% in constant currency. Our EBIT margin increased by 86 basis points in the quarter, driven by the fast integration of Avoka and by our strong sales execution. On slide 18, we show like-for-like revenues and costs adjusting for the impact of M&A and FX. As a reminder, we bought Avoka in December 2018, which is expected to contribute around $50 million of revenue for the full year 2019. In terms of FX, the weaker EUR was a headwind on revenues, while our cost base benefited from a number of currencies weakening against the dollar.
Taking into account currency movements and hedging, FX was a small tailwind on EBIT this quarter. We delivered very strong like-for-like growth this quarter, with total software licensing up 21% and maintenance up 13%, giving total like-for-like revenue growth of 17%. Total like-for-like cost increased 11% in the quarter, driven by our ongoing investment in sales and marketing as well as R&D. On slide 19, we had very strong growth in net profits, which was up 24% in the quarter. The increase in tax was mainly driven by the stronger earnings this quarter, with some additional impact from the increase of our group tax rate year-over-year. Our Q1 non-IFRS tax rate was 15.7%, which is about the midpoint of our fiscal year 2019 guidance of 15%-16%.
We continue to benefit from unrecognized tax assets in 2019, which is why we are going for a tax rate of 15%-16% for the full year. Our medium-term tax rate is a normalized run rate for the business. EPS onto group 24% in the quarter to reach CHF 0.52. Turning to slide 20, our DSOs continued to decline in Q1, driven by our strong cash collection. DSOs were down six days in the quarter or eight days pro forma to reach 111 days. We remain on track to decrease DSOs by 5-10 days per annum to reach our target of 100 days in the medium term. Turning to slide 21, our cash conversion continues to be very strong and significantly ahead of our target of converting 100% of IFRS EBITDA into operating cash. This quarter, our LTM cash conversion was 115%.
On slide 22, we show the key changes in the group liquidity. We generated $55 million operating cash in the quarter and repaid an outstanding bond in January for somewhat over $100 million, as well as repaying $110 million of our revolving credit facility. We ended the quarter with $97 million of cash on the balance sheet. Our total borrowings at the end of Q1 were $646 million, and our net debt was $549 million, with our leverage standing at 1.6 times. With our strong cash flow generation, we expect to be below one time leverage by end of the year on our current plan. Moving to slide 23. We have given our revised 2019 guidance, all of non-IFRS basis. The guidance is in constant currencies, and you can find FX rates in the appendix.
We are still guiding for full year total software licensing growth of 17.5%-22.5% and total revenue growth of 16%-19%. Our EBIT guidance is in the range of CHF 310 million-CHF 315 million, which implies a full year margin of around 31.9%. We continue to expand our EBIT margin, which is expected to increase 150 basis points organically, excluding the impact of Avoka. Finally, we expect conversion of 100% of EBITDA into operating cash and a 2019 tax rate of 15%-16%, as already mentioned. With the strength of our pipeline and our high revenue visibility, I'm confident that our guidance for 2019 is achievable. With that, I will hand back to Max.
Thank you, Takis. On slide 25, I'd like to highlight our Capital Markets Day, which is in London on the 21st of May. We will be discussing our strategy, product innovation, and financial outlook for the medium term. It is a great opportunity to get a more in-depth understanding of our business as well as meeting our management team. I would highly encourage you to attend it. You can find more details on our website on the investor relations section. Finally, on slide 26, in conclusion, we've had a very strong start to 2019. Banks are under intense pressure from all sides. They are investing in their IT platform to solve these problems. We've seen strong incremental demand for SaaS and cloud adoption as banks are understanding the benefits this can bring in terms of cost savings, efficiency, security, and speed of implementation.
Our sales execution in Q1 was strong across all geographies and segments. We continue to invest in our sales and marketing teams to capture that market opportunity. We are the only vendor with the winning combination of complete package functionality, localized Country Model Banks, and advanced and agnostic technology. We have very high revenue visibility driven by the pipeline growth and committed spend, which give us confidence in delivering 2019 and the medium term. Finally, I'm very pleased we already had a strong start to Q2, particularly in Europe. With that, operator, I'd like to open the call for Q&A.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Our first question comes from the line of Josh Levin from Citi. Please go ahead.
Thank you and good evening. I have two questions. On your last point about the strong start to Q2 in Europe, can you elaborate a bit on that? What countries are you talking about and what tier banks are you talking about?
Yes, sure. Listen, I think I've been quite explicit on developing an opportunity that we signed in April. I think it's obvious it is Nordics, as you can imagine. It's a very exciting development for us of what we are doing in Europe. As we said, we are starting in Finland, and hopefully we'll be able to develop that on a broader data.
Okay. A separate question. It looks like on slide 32, it looks like there's been a pronounced shift towards sales coming from add-ons to install base versus competitive deals. Can you talk a bit about the dynamic here?
I will not look at it too much on the quarter as such, because clearly that I look at it over the trend. Clearly, one of the opportunity for us is to increase our wallet share within our existing customer base, and secondly, with the largest one, where, as I mentioned, we do less than 5% of what we could do with them. Clearly this is one part of the strategy. On the other hand, as I mentioned as well, we won 20 new names this quarter and since we continue to gain market share. Clearly our strategy is both focused on extending our lead with our existing customers, but at the same time, because of our winning combination of five-star functionality and advanced technology, gaining the new customers. I wouldn't read too much into it.
As I said in the medium term, because of today we've got 3,000 banks, obviously the trend will be more that in the future, I think we'll be trending towards probably a 60% coming from existing customers and 40% coming from new customers.
Thank you.
Thank you. Our next question comes from Adam Wood from Morgan Stanley. Please go ahead.
Hi. Good evening, everyone, and thanks for taking the question. I wonder if I could just dig in a little bit on the SaaS business and the shift there that you see. Could you maybe just talk a little bit in more detail around whether you see that being more of an additive opportunity for you versus your existing customers switching towards subscription payments? It just seems a little bit unlikely that a bank that's going to be making a minimum kind of 10-year decision, but probably more likely a 15- to 20-year decision, if they can afford it, would choose to subscribe rather than paying licenses. Then maybe just a little more detail about the contract value. That's obviously a very impressive improvement in total contract value.
Would that be also representative if we look at the annual contract value, that's coming from an improvement rather than just a kind of increase in length of the contracts that you're signing? That was first of all maybe around the SaaS business. Maybe just on the data analytics and data lake side, as in some of the other areas that brings you maybe more into competition with general software vendors who are providing data services. Could you just talk a little bit about the differentiation you bring, focusing purely on banking technology and banking data versus those providers that are going to be competing more generally in the data space? Thank you.
Adam, let me take the first and the last one, I'll leave our new CFO to respond to the TCV one. On the SaaS and on cloud, as I mentioned a few times, it is incremental. Why is it incremental? Because those are customers that would not have taken our software on-premise. What is different, the cloud proposition makes it much more attractive to them financially. Hence the flexibility gives them the ability to, as I said, to elastically scale up and down the times market. Those are elements that a bank would not have gone the traditional way on-premise. Clearly we see that as incremental and not starting to cannibalize our more traditional on-premise business. That's if you want on your SaaS question.
On the analytics, I think our full proposition, I think why we are successful is because we offer integrated package, prepackaged products. Again, this data lake is totally integrated within the platform, both on the Temenos Infinity, on the Transact. It takes the ability to take data, which are, as I said, structured and unstructured from within our own platform, but as well from different sources. This is what is quite unique because it is prepackaged, it's very easy to deploy, time to market is key, and it is as part of their own infrastructure. I think this is how we differentiate ourselves. Obviously, this is for customers that will take it as part of the Temenos platform as well.
Perfect. Thank you very much.
On your more figure question, we have reported the TCV increased six times over Q1 LTM for 2019. We have started giving this one quarter ago. Now we are currently looking into what we are going to communicate going forward in terms of sales metrics. As you know, there is a Capital Markets Day scheduled 21st of May, so we are looking into what is best practice. Is it going to be ARR, ACV, bookings? What is basically best going to reflect our business of the going forward. What we can say so far is, in terms of the sales revenue, we still expect it to double in 2019, definitely with organic growth plus the acquisition of Avoka.
Cool. Thank you very much.
Thank you. Your next question comes from the line of Chandramouli Sriraman from MainFirst. Please go ahead.
Yeah. Hi. Thanks a lot for taking my question, and congrats on a solid start to the year, both to Max and Takis. Just a couple of questions from my side. Obviously, Max, you alluded to the opportunity to sell more into your existing install base. Can you comment a bit more in the context of some of your large deals that have been signed a few years ago, particularly the largest one you signed? Can you see more opportunities to sell into this install base? Also, can you comment on this revenue visibility in the same context? That's my first question. The second one is, in terms of services growth, it has accelerated quite a bit in Q4. Any concerns in terms of or any specific reasons for this?
number 2 is, should we be worried about services profitability if there's a drop in terms of services growth sometime in the future? Thanks.
Hi, Chandram. Let me take the first one. I think, I'm very pleased to say that we've really created a very strong partnership with those larger banks. When you come to the TCF, you can see that committee, obviously you can imagine that as part of my new role, I went and met with most of them, I can see how close the relationship is with Temenos and those Tier 1 banks, how strategic we are in the relation. I think with all of them, we have discussion on how to extend the use of the software, because as soon as they get to use our software, very quickly they see the benefit. It is the first pitch, the first time we implement, we demonstrate the benefit. Once it is there, very quickly we are able to increase the scope of work.
A very good example has been ABN AMRO, who was on stage with me at TCF. With ABN, over the years, we consistently increase and continuously, if you want, renovate the bank. That's really our goal with those Tier 1s. How do we continuously renovate part of that bank? It's very strategic discussions, usually at the top of the organization with the CEO, and so on. I'm very confident that angle of this part of the strategy, which is to grow more and to be able to support our largest customer, is clearly working extremely well. It is part of why we are confident that we can grow sustainably in the medium term. That's on your point. I will leave the services question to Takis.
Yes. Hi, Chandran. Maybe first on the visibility. You know, we still have very strong revenue visibility on around 85% of our product revenue, that still remains valid. You look at the medium term there, our revenue visibility is driven by our growth in recurring revenue in the committed spend and also from clients and our sales into the installed base. There we're still actually very confident. To your services question, yes, services revenue grew pretty fast. It was 34% in constant currency in Q1. A couple of reasons for that. Q1 '18 was a low comparator for service revenues, I wouldn't read too much into that or draw any trends from this. We still expect for the full year services to be around 20%, that's unchanged. You look at the services margin here, obviously, we do more involve our partners in implementations.
Our services organization is also maturing. We have more rigorous implementation methodologies, as we just heard before. We're pretty confident that profitability in the medium term for all this will move towards a 15% services margin. Great. Thank you.
Thank you. Our next question comes from Andreas Venditti from Vontobel. Please go ahead.
Yes. Hi, gentlemen. I have a question on the Americas region. You report pretty strong growth for licenses of around 60% in the Americas, and I was wondering if you could give us a sense for the underlying trend, if we exclude the acquisition, how this is developing. Thank you.
Hi, Andreas. Listen. Yes, the Americas, we continue to have very strong performance, to say I'm very pleased with that. I think what is interesting in the Americas and, let's say, specifically in the U.S., over the last few quarters, is that we are starting really to sell our different products in the U.S. We are selling core, we are selling payments, we are selling now the Infinity platform. I have to say that is working extremely well. Also, the traction that we've seen with Avoka and the opportunity that it brings to cross-sell Infinity is very strong. I have to say, I'm very pleased with that development. Now, on the underlying growth that we've seen in the U.S., we've seen so that 35% was the underlying growth, which ultimately is in line.
You remember we said that in the medium term, we do expect that part of the world to be growing faster than the other regions. We've been growing at a bit more than 30% on the line, if you want, when you remove the impact of Avoka.
Great. Thank you.
Thank you. Our next question comes from Hannes Scheuermann from UBS. Please go ahead.
Yes. Good evening. Thank you for letting me on. I have also a couple of questions. The first question is on IFRS 16. Can you remind us of the margin uplift in your guidance is coming from IFRS 16 adoption as your depreciation increased or picked up in the quarter? In regards to the Avoka acquisition, what is the contribution of the SaaS TCF to the $66 million coming from Avoka, and also what's the split of Avoka licenses versus the subscription revenues? That's to start with. Thank you.
Okay. On the last two ones, as you know, we give guidance for the full year on total revenues expected from Avoka, which is $50 million. We don't give a split on the individual lines. On the impact of IFRS 16, what we mentioned is the balance sheet impact. The impact on the EBIT is immaterial.
On the TCF?
Okay. On the TCV, again, as I mentioned before, we're collecting now what is going to be best practice going forward. Again, no further disclosure at this point in time.
Okay. Thank you.
Thank you. Our next question comes from Charles Brennan from Credit Suisse. Please go ahead.
Great. Thanks for taking my questions. I've got two, if I can. The first is just on your full year guidance. I know Q1 seasonally small for you. Generally speaking, the growth rates in Q1 are trending ahead of your full year guidance. Arguably that's against some very strong comps in the prior year. You're talking about having decent revenue visibility for the year. You've talked about the second quarter starting well. I was just wondering if you could run us through the puts and takes and what's holding you back from nudging full year guidance higher. The second question is just a small detail question. The FX impact during the period was a little bit stronger than I was expecting. Can you just call out the big FX impacts during the period? Thanks.
Hi, Charles. Listen, as I said, I'm very pleased that we started like that, the year, it's a great start. I always say to my team that the only way to start the year, pleased that this is how we started. Also the fact that, as we mentioned, Q2 is also starting very well. This give us clearly very strong confidence on delivering the year, which you will expect from us. Now, we are only in April, the year is still long. I think we are very confident that we can deliver this year, we'll be obviously giving an update every quarter on how things progress and how our visibility increases. At this stage, I think we feel very pleased with how we started the year Q2 and as well Q1 and as well Q2, and very confident on the full year.
I leave Takis to respond to the FX impact on the quarter.
Hi, Charles, and thanks for the question. As we said, there was a small positive on the details on the revenues. We essentially had some headwind on the EUR that was more than four million, and the other currencies were smaller. A total of around CHF 5.8 million, to be precise. On the cost
We obviously had almost from all currencies, some tailwind also from the EUR, also, the INR and then some other currencies. Slightly above CHF six million positive impact on the cost side. With net tailwind on the headwind of quite a bit below CHF one million, so really not that material.
Okay. Thank you.
Thank you. Our next question comes from Alexander Bowers from Deutsche Bank. Please go ahead.
Yeah. Hi, guys. Thanks for taking the question. Congrats on the good start to the year. Just zooming in on one of the cost lines, G&A spend declined in the quarter, the underlying to see decline in absolute terms. I know it can be a bit lumpy, but as you look to the rest of the year, is that the key line where you would expect to get some leverage on the kind of growth that you're seeing? Can you keep G&A flattish for the year overall, or was that an exceptionally good performance in one Q?
Just secondly, when we think about your targets, is it really the cash conversion target that needs to change most urgently because you're coming in pretty consistently above that, and now you have the rise of the cloud as well, and the deferred revenue building seems that 100% will be quite an easy level to achieve. Thanks.
Okay. Thanks for that. I'll take both of that. First on G&A costs, they were down 1%. That's correct. Again, Q1 is a small quarter, but there were some small impacts from the timing of some variable costs, social charges on stock option exercises and some other small methods. We expect still for the full year, the G&A line to grow around 3%-5%. It should normalize, but definitely it's going to grow less than our total revenues. On the cash conversion, definitely this is something, yeah, we have also acknowledged. However, with all the things we're going to look into in terms of SaaS and providing metrics, we are obviously also going to review our cost conversion and DSO targets. Stay tuned for more on the CMD.
Thank you.
Thank you. Our next question comes from the line of James Goodman from Autonomous. Please go ahead.
Thank you. Just two questions. Can I first ask on the revenues from the new sales or the competitive deals, is that low number a reflection of you doing relatively worse in terms of taking deals in the quarter, or is it just a question of few deals happening in this quarter? The other question I wanted to ask was on the Finnish savings banks. You talked about rolling this out across the other Nordic countries. Could you just explain what you mean there? Is that other banks in the Nordics signing up to the same platform that the savings banks in Finland are building off, or how should I understand this? Thank you.
Hi. Thanks. Listen, on the competitive deals, listen, I wouldn't read into the quarter. Clearly, as I said, we've got a very clear strategy, which is going after, and aggressively after all the new business. With our winning proposition of package functionality and best technology, we are winning most of the deals when we compete. Again, 22 new names were in the quarter. At the same time, we go after, and we want to grow our existing customer base, and we want to extend our wallet share with our largest customers. If you want our strategy and ultimately our sales force is structured that way. I'm pleased that in Q1 we had a very strong start growing 28% of our software licensing and both capturing 20 new names, but at the same time extending what we did with our existing customers.
Very pleased with Q1. On the announcement for Finland with Cognizant, I think what we are saying is we want to replicate the platform from the platform that we are offering for Finland. We could offer that platform for different Nordic countries, which will be still run, let's call it as a BPO by Cognizant, but will give the opportunity for banks that wish to have that type of deployment, the ability to do it on our software if you want. I think that's very exciting. As well, it doesn't mean that we cannot replicate this with other partners in other geographies. I think this is also very exciting.
Okay. Thank you very much.
Thank you. Our next question comes from Deepshikha Agarwal from Goldman Sachs. Please go ahead.
Hi, this is Deepshikha Agarwal from Goldman Sachs. I had two quick questions. First one, you highlight growth in the neobanks being one of the key factors driving group the growth momentum. Are we seeing an inflection point in terms of contribution from such deals, or is there more acceleration in growth to come? Can you give some more color on the kind of opportunity that you see here? The second one being on the U.S. market. Given both FIS and Fiserv have announced acquisitions of large payment processors, do you see any change in the overall competitive landscape in the region from Temenos' perspective?
Let me start with the second one, because the first one, I couldn't understand very well. The second one on the U.S., clearly, yes, we've seen some of the M&A activity there. I think, again, this is what differentiates Temenos. Temenos is very focused on what to do. We only do banking, end-to-end integrated. I think this is the strength of Temenos. Also, I think what is part of our strength is to have a modern platform, and one single platform where all our R&D gets spent on that single platform. We don't believe, if you want, on libraries of platform, of products. That is clearly a key differentiator for us. I think, on our side in the U.S., clearly, it's a newer market for us. We've invested a lot.
We are doing it the same way as we are doing internationally with this single platform, localized for the market, fully integrated, fully packaged. I think this is very appealing for them. I think we'll continue to see lots of success. As you've seen on Q1, the growth on the line has been very strong, very pleased with that. On the second question that you asked, can you maybe repeat it? Because I couldn't understand the question.
Basically, you highlighted some of the growth came from the growth from the neobanks. My question was basically, are we seeing an inflection point, as in, will this be the kind of growth that we're going to see in the near future, or is there still more acceleration to come? What are the main factors driving this particular growth in this particular segment?
Listen, neobanks or challenger banks, I think it's very interesting. I think, again, this is, I would say, one of the drivers coming from technology, because technology allows those neobanks to come up, and with a cloud deployment, very quickly, very effectively, they can be up and running and start to challenge the more established banks. I think this is also, I would say, pressure that we see in the market, which is clearly helping more traditional banks assess the digital transformation. Clearly they see that there are neobanks, challenger banks, that within few months, are up and running on the cloud with a very efficient infrastructure using our software. I think that clearly is very interesting.
We've had quite a lot of success the last 12, 20 months, and I think we'll continue to see those challenger banks coming up with very modern, and I would say, interesting technology. I think we'll continue to monitor that. I think our platform, as you know, is cloud native and cloud agnostic, which because of that, they can get the full benefit of cloud vendors. Which means that they can elastically scale it on demand. It's really interesting the level of resilience. We can even offer multi-cloud resilience or what we call active-active, which we are the only ones who offer that. I think we are extremely well positioned to capture this new market of challenger banks, and we've seen this both in the U.S. and in Europe.
Okay. Thank you. That's really helpful.
Thank you. That was our last question. I would now like to hand back for closing comments.
Thank you very much for joining us today, and look forward to meeting you and seeing you at the Capital Markets Day in London on the 21st of May. Thank you.
Thank you very much. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.