Temenos (VTX:TEMN) Is Achieving High Returns On Its Capital

Simply Wall St

Fri, February 13, 2026 at 1:49 PM GMT+9 3 min read

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What are the early trends we should look for to identify a stock that could multiply in value over the long term? In a perfect world, we’d like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. Speaking of which, we noticed some great changes in Temenos’ (VTX:TEMN) returns on capital, so let’s have a look.

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Understanding Return On Capital Employed (ROCE)

Just to clarify if you’re unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for Temenos:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.24 = US$265m ÷ (US$2.2b - US$1.1b) (Based on the trailing twelve months to September 2025).

So, **Temenos has an ROCE of 24%. ** That’s a fantastic return and not only that, it outpaces the average of 14% earned by companies in a similar industry.

See our latest analysis for Temenos

SWX:TEMN Return on Capital Employed February 13th 2026

In the above chart we have measured Temenos’ prior ROCE against its prior performance, but the future is arguably more important. If you’d like, you can check out the forecasts from the analysts covering Temenos for free.

What Does the ROCE Trend For Temenos Tell Us?

You’d find it hard not to be impressed with the ROCE trend at Temenos. The figures show that over the last five years, returns on capital have grown by 107%. That’s a very favorable trend because this means that the company is earning more per dollar of capital that’s being employed. Interestingly, the business may be becoming more efficient because it’s applying 32% less capital than it was five years ago. Temenos may be selling some assets so it’s worth investigating if the business has plans for future investments to increase returns further still.

For the record though, there was a noticeable increase in the company’s current liabilities over the period, so we would attribute some of the ROCE growth to that. Effectively this means that suppliers or short-term creditors are now funding 50% of the business, which is more than it was five years ago. And with current liabilities at those levels, that’s pretty high.

In Conclusion…

In summary, it’s great to see that Temenos has been able to turn things around and earn higher returns on lower amounts of capital. And since the stock has fallen 46% over the last five years, there might be an opportunity here. With that in mind, we believe the promising trends warrant this stock for further investigation.

Story Continues  

If you’d like to know more about Temenos, we’ve spotted ** 3 warning signs,** and 1 of them is potentially serious.

Temenos is not the only stock earning high returns. If you’d like to see more, check out our free list of companies earning high returns on equity with solid fundamentals.

Have feedback on this article? Concerned about the content? Get in touch** with us directly.**_ Alternatively, email editorial-team (at) simplywallst.com._

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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