Ladies and gentlemen, thank you for standing by, and welcome to the Temenos Q4 2018 Results Conference 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 keypad. I must also advise you that today's conference is being recorded, Tuesday, 12th of February, 2019. I would now like to hand the conference over to your first speaker for today, David Arnott. Thank you. Please go ahead.
Thank you, operator. Good afternoon, everybody, and thank you for taking the time to join today's call. I hope you've all been able to get hold of our results presentation, which is on our website, and that we'll be using as the basis for the call we're having now. Before we run through our outstanding fourth quarter and full-year results, I'd first like to comment on the announcement that we made as part of that press release regarding the changes in management.
I'll be stepping down as CEO on the 28th of February. It was a very tough decision for me to make. I've been with Temenos since before our IPO back in 2001, first as CFO and then as CEO since 2012. I've seen the business fundamentally transformed over this time, and I'm incredibly proud of the company as it stands today.
It's never been in better shape than we are today, and we're getting stronger every day. I'm absolutely certain that Temenos will continue to be the leader in our sector and will be one of the leading software companies globally over the next few years. After discussions with my family and after 18 years with Temenos, I've decided now is the best time for me to step down to spend more time with my new family and my new baby.
In fact, it's been playing on my mind since the end of last year when my family expanded. With countless Temenos colleagues who've become such close friends, I have to say, I've worked very closely with Max Chuard for many years and have absolute confidence that he'll continue to deliver outstanding success for the company and to all of our stakeholders.
I wish the new management team all the best for the future. I'd like to hand over now to our Executive Chairman, Andreas Andreades, to say a few words.
Thank you, David. On behalf of the board, I would like first to thank David for his commitment and dedication to Temenos. He has been a key part of the growth and success of the company and leaves Temenos in the strongest strategic, financial, and operational position it has ever been. I hired David myself 18 years ago, and actually Max, 17 years ago.
Everything we have achieved with Temenos over the past 17 years, we did together. I know David has been thinking about his position since he started his new family several months ago, which brings me to the announcement we made today. On behalf of the board, I am also pleased to announce that Max Chuard will become CEO effective March 1, 2019. Max is the natural successor to David and has been so for several years, given his extensive experience in the business and the strength of his leadership.
The board is confident he is the best person to continue executing our winning strategy and to drive the next phase of growth in the business. As I said, Max has been with Temenos for 17 years with responsibility for strategy, M&A, finance operations. He became CFO in 2012 and also COO in 2016. He is integral to our client engagement, both selling and delivery, and was instrumental in our expansion in the U.S. surrounding the acquisition and integration of both Akcelerant and Avoka, as well as Multifonds, which has been a very successful business.
I am also pleased to announce that Panagiotis Spiliopoulos is joining as CFO from March 31, 2019. He joins us from Vontobel, which is a leading Swiss bank, where he headed research and was a member of the investment bank's executive management team. He brings a unique skill set across technology, finance operations, and strategy.
He followed Temenos since IPO in 2001 and has always believed in our strategy and potential, and the board is confident he is a strong cultural fit for the organization. I have been working with David and Max for nearly two decades, and together we have built Temenos into the global leader that it is today.
With our new leadership team in place, I am confident we will continue to successfully execute our strategic plan. We have a massive CHF 50 billion market opportunity to capture, and I am fully committed, personally committed to the business for at least the next five years as we enter this next phase of growth. And with that, I would like to hand back to David to run through the Q4 results.
Thank you, Andreas. Turning now to the fourth quarter results presentation. I am going to start with some comments on our fourth quarter performance, and then I will hand over to Max for an overview of the financials and to give us some concluding remarks. I will start on slide seven. On slide seven, the business has delivered another outstanding set of results in both the fourth quarter and the full year 2018.
Our end market continued to expand as banks increasingly understand the urgency with which they have to address their IT deficit, and Temenos is capitalizing on this increase in demand as the leader in our market. We grew total software licensing by 15%, total revenue by 12%, and EBIT by 16% in the fourth quarter.
For the full year, we grew total software licensing by 21%, total revenue by 14%, and EBIT and EPS by 21%. We continue to hear from banks every day that IT spend is not strategic. It's strategic, but not discretionary, and they will continue to increase spending on IT irrespective of the economic environment. Fundamentally, banks no longer have a choice. If they want to do more than just survive the next decade, then they have to invest in IT renovation.
This is reflected in our outstanding growth in 2018 and the robust outlook for 2019. On slide eight, I'd like to stand back from the quarter and look a little bit at the momentum in our business over a few years. We've now grown our total software licensing at a CAGR of 27% for the last four years, and EBIT and EPS at 20%.
We're only able to achieve this by having the right strategy, the best talent, and the world's leading banking software products. The company has demonstrated it can execute at a consistently high standard over many years, delivering strong growth and returns for our shareholders. On slide nine, I'd like to give a little bit more insight into our sales performance for the fourth quarter and for the full year.
We saw broad-based demand across all segments, tiers, and geographies, with principal and regulatory pressures continuing to be top of mind for banks, as is the inevitable adoption and disruption from open banking. We have great momentum in the U.S. as we signed a strategically very important deal with a top-tier U.S. bank for Temenos Infinity, our independent digital front-end product.
We also signed a deal with PayPal for loan management in the cloud, demonstrating that we can beat the domestic U.S. competition and are gaining recognition rapidly in this market. We had a very strong performance in the Middle East and Africa in 2018, with demand from top-tier banks across both sub-regions. We won a significant number of new name clients, as well as having strong sales into our existing client base.
There's been a significant increase in demand for SaaS and cloud adoption in 2018, with total contract value increasing by over 6x in 2018 to reach $59 million of order book signed in the year, very little of which, of course, has flowed through our P&L. This demand is incremental, bringing new banks to market and driving incremental growth for Temenos.
We're continuing to see very good demand from Tier 1 and Tier 2 banks, which contributed 53% of the mix in the full year, and an even higher 66% in the fourth quarter. These banks are undertaking multi-year projects with Temenos as their trusted partner and are a key part of our revenue visibility and pipeline growth going forward.
We have robust growth both across our tool base and with new clients, with 28 new client wins in the fourth quarter, giving us a total of 76 new customer wins for the full year. Lastly, we've consistently invested in sales and marketing over the last few years to ensure we've got the right team and individuals in place to capture the market opportunity, and this investment accelerated in 2018. On slide 10, I'd like to give some color on the growth of our SaaS and cloud adoption.
We're seeing strong incremental growth in demand for SaaS and cloud, which has exceeded thankfully our expectations. By deploying in the cloud, banks benefit from cost savings through elasticity as the infrastructure automatically scales up and down to meet their high end-of-day and end-of-month batch demands.
We also benefit from world-class security as provided by our multiple cloud partners, as well as unlimited scalability, enabling banks to deal with the exponential growth in transaction volumes that they forecast in an area like payments.
By consuming software as a service, banks also benefit from significant reductions in operating costs and also a reduced implementation time frame, as they tend to stick to more standardized out-of-the-box solutions in the SaaS world, making them easier to deploy, as we've been demonstrating.
Of course, SaaS allows you to more easily take current, as we automatically upgrade them as soon as new versions and modules become available. We're seeing growing appetite across all geographies and tiers, with even Tier 1 and Tier 2 institutions looking to optimize their implementation projects by leveraging not just cloud-based implementations and testing, but real cloud-based ongoing deployment.
We're a highly differentiated offering with the launch of our new products, which combine market-leading banking functionality with true cloud-native technology, compared to our traditional competition, who lacks the depth of cloud expertise. Compared to the newer cloud-based vendors, who've got more limited banking functionality and certainly nothing like our pedigree of packaging country models after over 25 years of endpoints. Moving to slide 11. We had very strong success with implementations in the year.
Our products are packaged, upgradable, and contain 25 years' worth of innovation and functionality that enable seamless deployment from day one. None of our competitors have anything close to this. They also benefit from our extensive network of partner consultants. We've now got over 5,000 third-party Temenos consultants, and our clients can leverage the support of experts across all aspects of delivery, from implementation right through to testing and training.
Our partner network is critical to ensuring client success as well as enabling Temenos to continue accelerating its growth. This implementation track record means you've got the best references in the market, with a number of key go-lives and milestones in the year across some of our largest implementations, as well as very rapid six-month deployments for two digital neo banks in the U.S. and another one in Australia.
In 2018, we had 95 clients going live on our software for the first time and 233 go-lives across all implementations, including clients taking new modules and upgrading their software. This is equivalent to approximately one go live every day and a half. We continue to make significant investments in training our partners and clients through the Temenos Learning Community to ensure consistently high quality implementations globally. With that, I'd like to hand you over to Max to talk about the financials.
Thank you, David. Before I start on the slides, I would like to thank David for all he has done for Temenos. I've really enjoyed working with him over the years. We've delivered so many of these quarters together. We will all miss him. I hope he enjoys his time with his new family and new baby. Hopefully he will not get bored too quickly changing nappies.
I'm very honored and excited to be taking on the role of CEO. In my current role, I've been heavily involved in the day-to-day operation of the company, as well as leading client engagement, both from a sales and delivery perspective. We have a highly successful strategy that, there, David and I have put in place, that has delivered very strong performance.
With Taki Spiliopoulos joining as CFO, the strengthening of our Executive Committee with Jean-Michel Hilsenkopf appointed as COO, Alexa Guenoun, our Chief Customer Officer, joining the Executive Committee as well, I am confident we have the right team in place to ensure continuity of strategy and execution. Taki as well is inheriting a very mature world-class finance organization that I've built over the last few years.
The company has a massive opportunity in front of it. I am determined to capture this as we enter the next phase of growth with our new product set we announced in January. Starting with slide 13, I'd like to run through our performance in 2018 versus our guidance for the year.
We increased our guidance at the time of the Q3 results. I am very pleased that we were able to exceed the top end of our revised guidance. We grew total software licensing at 21%, which is a revised guidance range of 15%-20%, and total revenues grew over 14%, exceeding the revised guidance range of 12%-14%.
Finally, we exceeded the top end of our EBIT guidance, achieving an EBIT of $266 million for the full year, with our business model enabling us to deliver strong revenue growth and expanding margins. This is an outstanding set of results and continues our very strong execution track record over the past few years. On slide 14, I will highlight the key numbers for the quarter and the full year. I will focus on the constant currency growth rates.
Our total software licensing grew 15% in the quarter and 21% for the full year 2018. The demand in 2018 was broad-based across all segments, tiers, and geographies. We were able to deliver this level of growth with no contribution from mega large transformational deals. We are confident we can continue delivering very strong growth without the large one of these, given our leadership position and the broad-based structural growth in our market.
Our maintenance has benefited from our strong license growth, with maintenance up 13% in the quarter and 12% for the full year. As you know, maintenance is a very high margin and key to growing our future profitability. Total revenue grew 12% in the quarter and 14% for the full year, approaching the top end of our medium-term target of 10%-15%.
Lastly, we grew our EBIT by an impressive 21% in 2018 to reach an EBIT margin of 31.5% for the full year, an expansion of 1.1 percentage points. On slide 15, I summarize our other key financial metrics for the quarter and for the year. We had strong growth in earnings and achieved an EPS of $2.96 a share for the full year, an increase of 21%.
We generated $365 million of operating cash in the full year 2018, up 22% on 2017. This represents a cash conversion of 1.17%, well above our target of 1% for the first half of the year. Days sales outstanding ended the quarter down nine days organically. The acquisition of Avoka added four days of days sales outstanding.
Overall, we ended the year at 140 days as we had the impact of Avoka on our balance sheet at the year-end, without any revenue contribution in the P&L. Going forward, we expect days sales outstanding to continue declining around five to 10 days per annum to reach 100 days in the medium term.
The strength of our cash flows enabled us to launch a buyback, to acquire Avoka, to make a minority investment in NuoDB, and pay a dividend in 2018, and still end the year with our leverage at 1.6x . This leaves significant room to pursue growth opportunities if they arise. Lastly, I'm pleased to announce a dividend of CHF 0.75 for the full year 2018, an increase of 15% from last year. This is obviously subject to shareholder approval at our AGM in May. Moving to slide 17.
We had a very strong start to 2019 with several very exciting announcements. In January, we launched our two new cloud-native, cloud-agnostic products, Temenos T24 Transact and Temenos Infinity. These are the next generation of Temenos products, and I'll give some more details on this on the next slide. We recently announced the acquisition of Avoka, a U.S.-based company specializing in customer onboarding and customer acquisition.
This has strengthened our digital products as well as given us further momentum in the U.S. market. We also announced a minority investment in NuoDB in Q4, which provides a cloud-native distributed database, enabling our clients to maximize the benefit of running in the cloud by allowing significant scalability. Lastly, we announced a very exciting deal with Bloomberg, who we have partnered with to offer contingency net asset value calculation to the buy side through Bloomberg's global partner network.
This allows asset managers to generate net asset value estimates independent of the fund administrators to facilitate daily oversight and ensure continuity of operation in case of an outage. This opened up a whole new market for Temenos and has the potential to be a significant revenue stream in the future. On slide 18, I'd like to introduce our new products and technology.
These new products combine the most complete banking functionality in the market, leveraging 25 years of functionality from 3,000 banks, with the most advanced cloud-native, cloud-agnostic, API-first technology, and design-led thinking. This technology is cloud native, enabling our clients to take full advantage of elastic scalability, active-active resilience across multi-cloud. This on-demand model means that banks only pay for the resources they use, which we estimate could save them up to 10x on their infrastructure costs.
Our technology is also cloud agnostic, continuing Temenos' traditional strength of offering our clients a choice of platforms upon which to run our software. Temenos was the first mainstream provider to launch core banking in the cloud back in 2011, and we've continued to show innovation, last year launching the first payment hub in the cloud.
We've put more banks in the cloud than any other vendor, with real success stories, from challenger banks to large incumbent banks like Itaú. Our new products are revolutionary in our market and will open up significant incremental demand as a faster, cheaper, and lower-risk route to digital transformation. It will bring banks to market that were previously reluctant to embark on IT renovation. Moving to slide 19.
I'm pleased to introduce our next-generation independent cloud-native digital banking solution, Temenos Infinity. Temenos Infinity is a comprehensive omnichannel digital banking product with best-of-breed customer acquisition and onboarding, ready to be deployed independently or integrated with Temenos T24 Transact. This is the next major step in an award-winning Temenos digital front office product, which has over 20 banking clients.
Temenos Infinity is powered by APIs, enabling banks to easily connect Temenos Infinity to any core banking system. APIs enable banks to plug and play quickly to other systems, partners, developers, and fintechs to innovate on top of our software and extend the functionality. Temenos Infinity is designed around the bank's customer using design-led thinking, user journeys, and single currency view to support banks across all the customer touchpoints.
Today, digital front office is almost entirely in-house, with banks building up layers of legacy code in an attempt to respond to the customer demand. The competition is a mix of channels and UX vendors and platform toolkits. With Temenos Infinity, we have a highly differentiated product, and we are confident we will get a significant demand to release. Moving on to slide 20, I'd like to introduce Temenos T24 Transact, our next-generation core banking product.
Temenos T24 Transact takes the deep and extensive banking capabilities of Temenos T24 core banking, and we platform them onto a new cloud-native and cloud-agnostic platform. Temenos T24 Transact gives banks continuous deployment, meaning they are able to test and deploy changes like new product and ideas in a matter of minutes. This currently takes banks with legacy solutions months or years to do that.
It allows us either to build in the morning and deploy in the afternoon, giving them freedom to create and to experiment. Temenos T24 Transact share the same API technology with Temenos Infinity, so it also can plug and play quickly to other systems, partners, and fintechs, including other front-office digital solutions. Existing clients can upgrade to Temenos Infinity and Temenos T24 Transact seamlessly using the same upgrade technology they used for previous upgrades.
Temenos T24 Transact is a product that allows banks to transform faster, innovate quicker, and reduce costs. On slide 21, I'd like to give an update on our U.S. strategy. We signed a number of key deals in 2018, including PayPal for a loan management system in the cloud, as well as a strategically important deal with a top-tier U.S. bank for Temenos Infinity, which we will integrate it with a third-party banking system.
After the acquisition of Avoka, we now have a total of 150 employees in the U.S., giving us critical mass and traction on the ground. The U.S. contributed 15% of our total software licensing in 2018, and with the addition of Avoka, we expect our growth in the U.S. to accelerate to reach 25% of total software licensing in the medium term. Avoka is a U.S. headquartered leader in customer acquisition and onboarding, which we acquired in December 2018.
It has over 85 clients across the U.S., Europe, and Australia. It's enabled banks to create simple customer experiences to improve conversion rates. Integration is progressing very well, and the product has already been integrated as part of Temenos Infinity. We bought Avoka for USD $245 million, and we expect it to grow 40% in 2019 to reach $50 million of revenue.
We expect it to be non-IFRS EPS neutral in 2019, accretive in 2020, and to reach group margin in two years. Going to slide 22. We've seen significant incremental demand of SaaS and cloud adoption, which we expect to continue to accelerate going forward, driven by our highly differentiated cloud-native and cloud-agnostic product set.
Our total contract value increased over six times in 2018 to reach $59 million by the end of the year, and we expect SaaS revenue to double in 2019. The growth in SaaS is driven by a combination of new banks, larger institutions looking to renovate for digital front office and banks looking to launch services across multiple countries. We expect this growth to continue accelerating in 2019 and in the medium term. Moving to slide 23. We are starting 2019 with very high product revenue visibility.
We have strong visibility on around 85% of our product revenue, and this slide shows how we build this. You'll see in the appendix, a more detailed definition of our revenue visibility. Our recurring revenues of maintenance and SaaS are paid annually in advance and blocked in for the year. Our software licensing includes subscription under IFRS 15, so there is an element of this that is recurring as well.
It also includes re-licensing as a number of client contracts come up for renewal each year, and we know the expected contribution from this. We also know the level of committed spend from tier 1 and tier 2 banks undergoing progressive innovation. Lastly, we have very good visibility on sales to our existing customers as we have assessed their historical behavior in the context of our pipeline today.
This level of revenue visibility puts us in a very strong position at the start of 2019. Going to slide 24. We had a very strong pipeline growth in 2018. This was broad-based across all tiers, segments, and geographies. We are expecting double-digit growth across all geographies in 2019, with demand driven by our leadership position in core banking with Temenos Transact, as well as with market change digital front office with Temenos Infinity.
Obviously this gives us also a high level of confidence in the outlook of the business. On slide 25, we've given our 2019 non-IFRS guidance. Please note that the guidance is based on IFRS 15, and we've provided the 2018 full year-based numbers under IFRS 15 for your reference. The guidance is in constant currencies, and you can find the FX rates under restated 2018 P&L in the appendix.
We are 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 $310 million-$315 million, which implies a full year margin around 31.7%. We continue to expand our EBIT margin, which is expected to increase by 130 basis points organically, excluding the impact of Avoka.
Finally, we expect conversion of over 1% of our EBITDA into operating cash and a 2019 tax rate of between 15%-16%. With the strength of our pipeline and our very high revenue visibility, we are confident that our guidance for 2019 is very achievable. On slide 26, we are also reconfirming our medium-term targets. We expect total software licensing to grow at a CAGR of at least 15% and total revenue to grow at a CAGR of between 10%-15%.
We expect EBIT margin improvement target of between 100-160 basis points per annum, and EPS growth of at least 15% on a CAGR basis. For DSOs, we are targeting 5-10 days reduction per annum to reach one day in the medium term, and we expect our normalized tax rate to be around 17%-18%.
Lastly, we expect to continue to convert over 1% of our EBITDA into operating cash flow. We've been able to deliver growth at or above this level over the last three years, and we are confident we continue to do so going forward. On slide 28, I'd like to highlight we are holding our annual Temenos Community Forum in The Hague on the 2nd-4th of April.
This is an amazing opportunity to meet our clients and partners, fintechs that work with us, and of course, the executive team. If you like more information or attend, please get in touch with us as this will be a fantastic event. In conclusion, 2018 has been an outstanding year for Temenos. Our clients are under significant digital and regulatory pressure, which, combined with the move to open banking, is driving demand for our products.
We see SaaS and cloud adoption driving incremental demand, and we expect to capture this with the launch of our two new cloud-native and cloud-agnostic products. In 2018, we saw the ongoing investment we've made in sales and marketing paying off, with very strong sales execution across geographies. We've had a strong start to 2019 with the acquisition of Avoka, the announcement of our deal with Bloomberg, and the launch of our new products.
We continue to benefit from multiple structural drivers, The strength of our pipeline and revenue visibility means we are confident in delivering another strong year of growth. We have a very clear strategy that has driven our growth over the years. As CEO, I will continue executing this winning strategy to deliver exceptional shareholder value. Operator, please, we can move on to Q&A.
Thank you, sir. Our first question comes from the line of Josh Levin from Citigroup.
Thank you. Good evening. First, David, I want to wish you the best of luck. I can't think of anyone who deserves it more than you, given how hard you've worked building Temenos. Congratulations to you, Max, as well. Well deserved. My first question, your medium-term guidance is well below your 2018 results and your 2019 guidance. What's holding you back from raising your medium-term guidance?
Thanks, Josh, for a very good question. Listen, the medium-term guidance that we are giving is what we believe we can deliver sustainably. Clearly, we've seen that the last few years we've been growing faster than that. I think you are raising a fair point on the fact that now we see the cloud adoption being faster than we expected.
I think at some stage we are going to see that going through our medium-term targets. I think it's too early to do that today, and I think we'll provide more information during our next capital and market day. Thanks for the question.
Okay. One more, if I might. You've spoken before about this being the part in the cycle where you need to invest in sales and marketing. Your sales and marketing costs, it looks like they increased around 23% in 2018. Should we expect a similar trend in 2019?
Yes, Josh. Clearly, we've been investing in sales and marketing. We've been investing in specialization within our sales and marketing, and we'll continue to do that. Clearly, as you said, we grew sales and marketing 25% in 2018. Clearly, the goal is to continue to invest in 2019 to capture this amazing opportunity which is in front of us.
Thank you.
Our next question comes from the line of Paul Kratz from Jefferies.
Good evening, everyone. Just two questions on my end. Regarding the front office deal in the U.S., I think you mentioned that you were integrating it with a third-party core banking system. Is that a system that was internally developed, or is that from a competitor? Secondly, when it comes to the U.S. deals that you're currently implementing, to what extent are you relying on your own services team to implement those versus third parties?
The strategic deal that we won is on the backend side, as let's call it one of our competitors that we see in the U.S. We're very pleased that they selected us on the front end. See, that's part of having this Temenos Infinity, which is totally independent from the backend.
Secondly, in the U.S., we've been so far delivering our projects mainly ourselves, but clearly internally, we've been building up the same governance and the same partner structure that we've got internationally. You'll see now that we are getting more scale in the U.S., and with that much more activity, we are going to start deploying the same model as we do internationally with partners as well.
Can I just make one quick follow-up on your midterm guidance? When I look at the 100 - 150 basis points, and I look at the margin trajectory of Avoka, is it fair to say that maybe over the next two to three years, you should see your margins expand at a rate that is significantly higher than what you have in your midterm guidance?
I think expanding our margins between 100 and 150 basis points is a very acceptable and reasonable assumption, and I think this is what we are planning to do. Clearly, we want to continue to invest, and we'll be investing heavily in sales. We'll continue to invest in the product as well. At the same time, as you know, we've got a maintenance stream of recurring revenue which is highly profitable, and that will continue to drive margin expansion. For the time being, we'll continue to target the 100 - 150 basis point improvement.
Thank you.
Your next question comes from the line of Charles Brennan from Credit Suisse.
Great. Thanks very much for taking my questions. I've got two quick ones if I can. First, can I just touch on a subscription versus license debate? It's one that we see across the sector. The way in which you describe subscription sounds like it's all incremental business for you. I'm just wondering at the margin, whether there's any cannibalization of traditional licenses moving to subscription, and if that's something that's holding back your revenue growth.
Then secondly, on a completely separate matter, one of your partners, Cognizant, been talking very optimistically about the size of the Santander deal for them. I was just wondering if you can give us any color from your point of view on that deal. Thank you.
If I start with the first one, we don't see a cannibalization. We see that this is opening a new market, things that probably would not have gone the traditional way. I think we don't see a cannibalization, we continue to see our traditional license growing fast and other digital things growing as well.
On the Cognizant one, we've clearly seen what they've disclosed, and we were very obviously pleased with this announcement. As I said, we started well this year. We are very confident in 2019. I will be pleased to update you, during our Q1 results.
You've touched on a good start to the year. A couple of investors have been commenting to me on the tough comps that you seem to have in Q1. Is there anything you want to say about the seasonality of this year to help us with our modeling?
Listen, as you know, we look at the business on a daily basis. We gave you a guidance that we believe we can deliver because of the high level of visibility we get in the business, as well as the very high level of pipeline lead flow. On that basis, there's nothing for me to flag. We are confident that we are going to have a very successful 2019.
Great. Thank you.
The next question comes from the line of Hannes Leitner from UBS.
Yes, good evening. Thank you for letting me on. Two questions also. The first one is regarding Julius Baer. Julius Baer announced at their conference call that they will not proceed. They will stick with the in-house solution in Switzerland. May you comment on that? The second one is, in terms of the TCF increase, how much of that is Avoka? A quick follow-up maybe.
On Julius Baer, obviously, I cannot comment on that. Even though I would love to, I cannot. On the current contract value, really there is no contribution on that from Avoka. It's without any contribution of Avoka, and that's why I think we are so excited about the traction we see in cloud and SaaS, and we continue to expect this to continue to grow in the future.
Okay, just a quick follow-up. In regards to the investment in equity and the cash flow, can you specify what those $15 million are for?
We did mention that we've done an investment in NuoDB, which is on this cloud specialized distributed database. That's the only investment we did in 2018.
Thank you.
The next question comes from the line of Jacob Kruse from Autonomous.
Hi. Thank you. I just wanted to ask if you see any additional opportunities or challenges in the U.S. following the Fiserv and First Data deals announced a couple of weeks ago. Thank you.
Listen, we've seen a lot of momentum in the U.S. the last few years. 2018 was by far our best year in the U.S. We are gaining much more credibility in the U.S. The Avoka transaction as well is bringing momentum in the U.S. It's a U.S. company. We've got, as I said, almost 500 people there.
I think that for us, the main point now, when you grow such a major transaction than the one that you mentioned, clearly it can bring some disruption. What will it mean? Difficult to say. What I can say is Temenos is in great position right now to continue to execute extremely well in the U.S., as indeed, the last two to three years momentum. I think we are going to continue to see that in 2019 and onwards.
Thank you.
The next question comes from the line of Chandra Sriraman from MainFirst.
Thanks for taking my question. Good evening, Max. Good evening, David. Congrats on your new roles. Just a couple of questions from my side. I remember you just showing us a slide where large deals led to your beat in the last three years. Obviously, again, has been very strong without any large deals.
Can you give us a sense of how strong your backlog is with regards to the progress of renovation deals to give us a sense of how independent your top-line performance is with respect to the large deals that you would sign in future? That would be very helpful. Secondly, if you can give any sense of how much you have already included in your 2019 guidance from the Bloomberg deal, that would also be quite helpful.
Chandra, thanks for the question. On the large deals, I think the main point here is that we've delivered an outstanding 2018 without any contribution from large deals. I think the point I tried to emphasize is the demand was really broad-based, the momentum broad-based. That growth that we've seen in 2018 is what we see as sustainable in the future and does not require any contribution of those mega deals.
Clearly, everyone like those big deals, but the point is how do you build a business which can sustainably grow at those levels without the contribution of those one-off deals. Clearly, we continue to have a discussion of very strategic deals, but those are very unpredictable and timing is very difficult to predict.
That's why we don't comment on them, and that's why we don't add them as part of our guidance, because we cannot predict, and we cannot guide on a sustainable and predictable basis. That's why we remove them. Bloomberg, this is very, very exciting, and we expect to start to go to market in early Q2. As I said, this opens up a totally new market for us, really the custom market, which we've not been there so far.
We do it as well in a very interesting way with Bloomberg fulfilling or lead the way there. We'll be able to leverage their distribution channel. As you might know, they've got around 2,000 sales people. We are going to train some of them on our products, and I expect to see, starting from Q4, we're going to see contribution from Bloomberg.
We'll update as it goes. It's a new initiative. I think it's a very exciting initiative for the medium term. With that, I think that was the last question. Thank you very much for attending the call and see you soon on the road.
Thank you very much.
Thank you, ladies and gentlemen. That is end of the conference for today. Thank you all for participating. You may now disconnect.
Thank you.