Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation's 2022 Fourth Quarter and Full Year Financial Results Conference Call. Sapiens issued a press release before the market opened this morning, and it has been posted on the company's website at www.sapiens.com. All participants are presently in a listen-only mode.

Following management's formal presentation, instructions will be given for the question-and-answer session.

to call like Ms. now would hand to the I Head Marketing Relations. Yaffa Chief and of Cohen, Sapiens' Officer Investor Yaffa, would you like to begin?

Yaffa Cohen

Zukerman, Thank call fourth like to results CFO; Al-Dor, you, to welcome Mr. today me Roni Giladi, President With all would Alex operator. on Roni of for the and XXXX. Sapiens to Chief and quarter conference our Officer. review full year and Strategy are Mr. I call you Mr. CEO;

available to the of the be we Following any results, answer will summary questions.

these we I would like forward-looking Before conference provision call. of of issued remind call Sapiens safe other information, change the events, because expressly release a in The to or the today new any this start, to everyone future update also its the press or may that content otherwise. contain of statements. expectations statements, apply views forward-looking or harbor in obligation whether any projections to disclaims or revise

financial link, to market opened provided On in company the release before today's A been call, of issued of non-GAAP our or has our Investor refer the we call this via press the available this to on release will section in of the today. call the Relations the available be measures. after results reconciliation which will website non-GAAP replay GAAP earnings published morning. A is website we

Roni? call the turn over to of Roni will Sapiens. and I President Al-Dor, CEO

Roni Al-Dor

our deal We and quarterly call to call, and results continued conference Welcome, today's all Yaffa. you, call. your is provide annual investor our Sapiens' insight plans. our our and will achievements everyone, Sapiens in It deals progress annual and XXXX, of larger with increase XX% appreciate to to cloud discuss size. remarkable successful we leading my support to in our and Thank you the of today. you. future delivery pleasure platform QX into forward welcome significant In multiproduct for number In looking deals our business, the new including our to the made to sharing we our of

dedicated North America, a efforts, After successfully years us. and resumed of we several investment key for market growth in

off Our deals the compensation sectors, across positive Together growth new with with in is we hard future Life, work pipeline our impact notable P&C, sectors. reinsurance expect success those region. paying the across our and on growth and a workers in won

our in in Our our the significant to & Europe, taken helped we particularly our fourth this capabilities growth where In enhance our have year. growth success regions, saw North presence in integration in deals, reinforce which key quarter market. America, we was nearshore another this P&C in has Life to steps contributor strong to

Property resulted Sapiens named recognized Our growth the EMEA solution Casualty. and Sapiens awareness in insurance market. both brand and as This by P&C and our Life efforts and across and continued industry in Policy Pension the award week, Administration have Last our leadership Europe in industry an increased won analysts, Celent excellent provider the recognition leading reinforced been who in report.

APAC, success. XXXX, In across In we the new especially operating products results particular, achievement consistent guidance, this territories. margin revenue EMEA of the achieving this signed Overall, given during logos reflect business met we our role in XXXX, and XX XXXX. in played challenging our progress environment all and major in and remarkable which

for focus applications, multiple and includes additional on increase plus resulting core cloud closing one of in products contracts the an our more such deals and offering products or that the allow average insurance cloud, size. as in majority data digital, deal addition, In platform to us

of major of We our us XX.X%, maintain of insurance a which a operating sustained face to maintaining an industry XX% enabled inflation. positive Throughout to profit XXXX, we expanded margin and the costs, lower is focused The and on team margin the flow. solutions operating the offshore operating of cloud. replacing even the of undergoing to gross in Sapiens delivered is market cash in new over core significant capabilities. new de cloud. the deals becoming XX% movement one or transformation implementing XXXX, trends system when most most Cloud legacy carriers is In and facto the of choice of on

with same improve we move we customers continue efficiency our We run, year. cloud of Sapiens the platform, to on our move to long customers successful from our can to numerous the effort customers on-prem on resource existing to this and the In the as operation. Cloud manage continue

the is layers its which forefront platform, with growing digitally data of direct-to-consumer trend of and solution capabilities the of trend data priorities along increasing digital comprehensive carriers, both the and as analytics they direct-to-businesses ML Digital work providing cloud. to data. with agents provides to customer industry from and the operational AI in at and increased insurance adapting Sapiens advanced and of solutions engagement managing well adoption use offer driving way The additional and remained for reporting for transforming several offerings experience insurance other of distribution platform, This as Sapiens part is dashboard as cases. core the and importance carriers of channel. data brokers to

process a significant decision integration and with provide The capabilities our ecosystem creates decision-making size. benefits that marketplace deal intelligent further digital these data larger delivering to promotes while business our of a data-driven decision capabilities. smart The platform insightful, enhanced with solution automate layer making

our solution our technology unique providers We customers. highly relevant are custom reached provide solutions to offer insurance XX over to clients. and needs extensive leveraging customized of for to meet partners Sapiens ecosystem

innovative. customer made core and along and centered administration XXXX to strategic successful the digital them cloud third our insurance deal North digital suite in Life offer life that our native with entity select Let's in Sapiens will provides business close with platform solution SaaS enablement shift financial quarter, enable Sapiens solution This solution. combined with to services a next-generation major and experience. service focus services solution customers America. pre-integrated sales them CoreSuite performance, during with on North America advancement regional our Sapiens starting

Sapiens a our pipeline, core saw North our America outlook logo is other application for business growth XXXX businesses, life XXXX, new in acquiring strong life and highly deals. promising. and advancing In With

to In performance also several expansion solid and anticipate in strong deals a of Canada. We experiencing position America in into in growth have is new businesses. seen our P&C the compensation including reestablishment XXXX in Sapiens closing Life, addition market, workers’ North

emphasize The The acquiring for reinsurance to XXXX showing segments logos be migration pipeline cloud solid for a on is continue North and with new XXXX pipeline to strong beyond. in stronger XXXX. the and America

investment P&C North in claims product digital and segment, functionality and added In Workers’ recognized Celent. P&C by analytical compensation. and pro and effort for America, Sapiens workers’ and we Comp have improvement solution offering recognition for claims been received

major with These to In APAC our delivering innovating and acknowledgments and new solution EMEA progress demonstrate lending businesses, Sapiens logos effective customers. the Sapiens commitment made region. in XXXX, our to

L&P, analytics core Many Sapiens, for data of services. these P&C and solutions reinsurance, deals digital, and including platforms from cloud solutions include multiple

in growth, We and with to logo the have on preferred regions. in more we our a acquisition market. strong EMEA support stage dedicated APAC are currently the team our management continuous account bidder To logos, demonstrating in position focus and new

presence team This improve our further in the region. will

successfully progress remarkable securing business final marks Pension P&C in XXXX. with a made Ireland, the have start and and stage. the UK in the We to advancing and pipeline promising This more for new Life logos and heading our

digital, our cloud portfolio extensive driving and upsell business transition for insurance focus with analytics is with cross-sell to Sapiens and more data especially big services. clients, A and Sapiens

with We the successfully have implementing Calculo management. of acquisition sum.cumo Tia, strategic integrated new and rebranding account and

business with through to increased has these This value and providing clients, and resulted cross them in successful upselling savings. growth

sum.cumo products. We from are customers resulted innovation investing to cloud pre-integrating and our solution enhance this TiA And customer enable us digital, Sapiens. our to data existing proposition base and and adopting Sapiens platform the several such the and in to

OMI XXXX, data Sapiens a chose Africa, platform. in South In reinsurance and customer Tia

business services another addition, to our support customer Dar, capabilities growth, is and To Sub-Sahara, in full cloud nearshore supporting our a In Sapiens in Denmark UK Europe, increasing moving Tia model. Nordic, Iberia. growth is our in

solution investing the support business. platform new in our are We to more

already value and to improve have our secured We proposition.

with we expanding is Iberia. XXXX, to including penetrated our ahead in a top priority markets operate, territory Dar and customers every The existing newly as goals. and Looking key such we deepening several relationship have

in market. grow Another presence sustain top American our and priority is to North

capitalizing to and determinations. market executing precision America in North with vast committed by the are We opportunity on

Life our robust with is goal new while P&C, to pipeline. for growth ambition close in establishing deals and a Our future solving our foundation

and On cloud. the deals. with and expansion data product priority an allow innovating is And and This successfully analytics. to comprehensive want beyond focus to provide the ongoing larger additional us into offering with front, close and us transition continue to solutions to more our even digital, continue allow our we lastly, customers will to core

CFO. call the to Now would I to Roni Roni? our like Giladi, turn

Roni Giladi

Revenue quarter for than balance comments with modest XXXX. review of our a results, my in slightly fourth a previous fourth Thank full was sheet you, $XXX.X flow. I XXXX XXXX, higher by will quarter will I decline quarter. to the quarter Roni. the the year million and $XXX.X guidance of in compared followed up wrap million, non-GAAP commentary of with the and cash begin XXXX fourth and on

$X.X $X.X to million in deals a an of of X.X% XXXX. Revenue in new increased last in compared was of in QX is QX. by and increase North increase America revenue year, or $XX.X million. of to $XX.X compared million million, The Revenue QX in QX result X.X% signed

constant $XX.X Revenue currency was XX.X% South in X%. Europe revenue and decline quarter, from South million, year-over-year increased APAC Rest a basis, to to due in of mainly Africa in Europe World, million. $XX.X the prior year in reaching Africa. growth by On million, fact $XX.X of Revenue which includes grew a compared

The the in million, Operating margin slightly dollar. of year-over-year of XXXX. and profit and primarily than due the to of was of USA lower QX at level decrease and quarter impact was margin same and the in QX XXXX XX.X%, European versus currency $XX.X the profit the of XXXX operating fourth

million the a the $X.X to a offset During expenses of one-time from million, on the income quarter, due had waiver debt $X.X of of mainly by interest net acquisitions, approximately debenture. our financial one we

for X.X% XXXX of diluted to XXXX at was $X.XX XXXX. the fourth attributed and same per QX $XX from EPS million up $XX.X quarter Sapiens for quarter income of of the share in of was Net fourth XXXX. shareholders level million, the

and compared results XXXX. to in our XXXX, XX, Turning months revenue the $XXX.X $XXX.X XX to ended line million the guidance. December year for XXXX with X.X% full now in million, up with increased

XXXX represents of our revenue basis, grew constant from revenue America XXXX. that growth geographies Growth revenue in of X.X% revenue, X.X% in and On XX.X%. America, revenue. Europe and North growth total all by represented in in XX.X% mainly increased North X.X% total European XX.X% our of rest derived a of was currency of

XX% signing of our our macroeconomic factors. XX% from was to despite Europe due revenue deals technology businesses businesses. XXXX, in growth decision. represented of rest our The & In and Life reached and coming represented new delay are the The Annuity in our of P&C

more serve currently including insurance globally, With We largest portfolio, type broad base a of and customer size. all in than some the across XXX providers product is insurance diversified our financial world’s of customers institutions. area global

more in representing Our Gross our XX.X% $X.X top operating with XX% XX increased level same million. currency XXXX development. committed than $XXX represented while of increased million. investing customer spend remained and X% by our XXXX, X.X% R&D expenses in increased the year-over-year to of the remain by of customers at We million, gross in no despite research to revenue profit $X.X margin headwind. revenue. Similarly,

result, revenue. investments our of R&D our a represent XX.X% As

that we and XX.X% our of in are revenue, in stable effort and we for and of investments guidance. XXXX technology resulted have are with total line our SG&A these year, XXXX generating expenses company. XX.X% both focused This see represented on R&D pleased return which in margin to cloud the operating digital

$X.XX X.X% in per Earnings XXXX. were from X.X% million to share increased EBITDA up per share XXXX. $XX.X diluted diluted by in $X.XX

Our XX.X%. XXXX margin for was EBITDA

cash Turning X, $XX.X of be scheduled made debt short-term $XXX payments. in and XXXX, of XXXX, and sheet, to million payment. as have On debt XX, equivalents and to $XX December million, deposits, four January we totaling paid had our we is balance which million annual cash equal

free adjusted to flow. Turning cash

which which non-GAAP flow million, was XX.X% reduce net of adjusted translated free signing During cash payment deals to cash the $XX.X the the of income. represent generated The because customers. new adjusted upfront XXXX, of flow result from we environment, low delay in new macroeconomic free our of

our slowdown increased XX.X in in DSO days In addition, collection impacting a was that factor days XXXX. XX contributing a to from in

at dividend when the we HX During dividends dividend end dividend announcing amount $XX.X in XX-F change our in million policy total flow reflect positive our basis plan a semiannual on the our we publish cash the paid confidence business to our year, generation. of distribute of to We and cash on a March.

into for in represent Today, we macroeconomic million introducing organic $XXX range growth growth the takes to Revenue. cycle backdrop $XXX X.X%. extended anticipated experiencing. revenue of are XXXX. The following of the and midpoint million, we contract guidance the Non-GAAP the growth, account are

Non-GAAP in operating to pressure. midpoint a labor of Profit. expected XX.X% from improvement points to X.X%. operating despite in representing and improvement This costs the due XX%, growth increase profit operating XX margin margin basis inflation of is

rate We to the in to expect effective XX%. be our of annual tax XX% range

two, implementation revenue Starting software period our help two better predictability each the is will pre-production margin. additional in investors we to groups, post understand two comparisons reoccurring and Sapiens’ reported. view and products into in period-over-period and We’ll visibility of an production are: and revenues revenue XXXX services. provide new split our our of one, provide groups gross as services, The

term post-production in mix recurring are solutions, include the and services implementation cloud nature. Pre-production one-time stream nature. revenue license, services in products which mainly maintenance, before go-live, implementation services, is reoccurring Software a post-production and include mainly reoccurring and and subscription services of

In recurring XX% reoccurring from quarter, gross XXXX, were from in with ranging given the XX% in total any to software XX% any revenues to of in quarter. range a XX% products And given post-production revenues. of services margin and

While of of margin revenues with the implementation ranging XX% XX%. services revenue, range preproduction to from to gross were in a XX% from total XX%

a see, revenues. margin reoccurring of are a higher us years, to to revenue can typical our and you revenue visibility majority tremendous As a gross reoccurring of recurring our five have margin. blended with recurring large predictability reported than our providing in This and two commitment

$X.X in XXXX, exceed profit the operating summarize, in to a To strong million. $XX mark expect revenue billion we with above

revenue gross margin. a recurring expected total Our be with and to revenue XX% our reoccurring higher about of

and Our is serve strong, America position Europe P&C position annuities market. North life both to are the in and we our and in and working improve

providing to committed shareholders. to growing our remain while also We our dividends company

and forward, for our value As our shareholders, dedicated other create to we move is customers company long-term sustainable its stakeholders.

lie opportunity years the about in of capitalize that the them to With are come. confident we and to future excited us, ahead the on

will I to call Al-Dor. now Roni turn Roni? the back

Roni Al-Dor

sustaining the and transition Roni. America digital you, and offering are data priorities we cloud. XXXX North our expansion focus deepening To and existing growth Thank presence our summarize operate, on growth territory while in where in market, with expanding every relationships analytics, into the lastly, our beyond our EMEA, customers ongoing continue core in our continue to

increase We strategy profitability drive to and customer executing our long-term improve and growth, are value. sustainable, shareholder

for would I remarks like our questions. close now prepared to and open the call

Operator

the and Thank begin The you. gentlemen, Instructions] question-and-answer of [Operator first ahead. Ladies from we at go is Blair. Please session. time, question William Becker this will Dylan

Dylan Becker

activity Hey, to services mix the you and those I as that disclosure do as gentlemen. new that in How project And the all Appreciate for question that down indicator road. well. but XX% component appreciate services flowing as the revenue cloud XX% model serving that incremental hand you’re momentum a side think seeing talked of business on taking more leading guys to one about. job. nice component implementation, you’re of around shake the the pre-production recurring business of about given you software kind the seeing that the the of through on you’ve

Roni Giladi

They reoccurring this follow is on the implementation is piece. start the recurring the two start Dylan, growth is the visibility to this and where in customer predictability the the of which differentiation later implementation to the the create these revenue, gross company company margin, We on, Hi this one-time and we the Roni. provided new period, into investor and get that to and stream in The have to with overview obviously. basically of the prediction is revenue we show more in because board.

grow grow also and other reoccurring expecting time businesses, both In company more the more the the are we them the because we one. first margin. will over the we of So, expect to improve the cloud as one and to in Roni and mentioned, as to fill of shifting customers the recurring group

Dylan Becker

helpful. seeing maybe workers’ America, out doing you’re talked success cloud That’s reinsurance. and comp guess some you areas light about think did like in super North about to the in implementations well. as it. I sounds those you like But kind it – and is of call Got of we strength

the to of well So you those comp of in what you wedge some a market are get that wondering as about that reinsurance as how potential segments as are the customer worker’s serving that foot then nuances base? And maybe allowing in the think that initial do door with

more those sell that North of product to customers in P&C Thanks. the to in America? side

Alex Zukerman

is this speaking. Dylan, Hey Alex

We workers’ seen about is need comp U.S. see much and deal more that strong half of see the have be at the COVID, reviving one And we’ll for the insurance. things in our least comp period life now similar We talk a of to close market. first the If start we’ve over the quite this market. in segment active. lever into solutions, So we we and workers’ year. market around the definitely believe what this is on we the market

So our the and illustration we underwriting. on – business the applications, have

back very, very components core We pipeline. is strong with terms this the very continuation very prospectus to of market have of the is last This year their the suite we in life, have pipeline of a – year. which is a the on last start, good strong a U.S. we And brought year.

deal expect one – for we between the or close deals in two year half first this this We sure, quarter. one in to also of

also the but this expect deals this the we after that strong the investment to product side, the the year. only on very of strong sign months XX need in XX in market P&C to in We seeing months. see also first pipeline the of the are we not And pipeline, quarter progress of our last the

our board is foods. the America product, in very the we bringing strong in strategy management giving what right the market, in the that efforts in definitely, on North the see So investment is here team and

Dylan Becker

Thanks. And color Super Great the to helpful. hear. guys. incremental appreciate all

Operator

is question Mayank of from next Needham go Company. Please The Tandon ahead. &

Mayank Tandon

taking Appreciate you guys questions.

kind you kind being they’re board? Or little the dive little up across as more of are things be into minor notable to Are kind any extended should wanted guys kind or holding of a not a of the slower there Just and cycles geographies macro. we better just [ph]? of maybe sales well seeing

Roni Al-Dor

is core data Al-Dor. are and our Europe According there are are cloud. Roni Mayank, U.S. case in in more need all choosing main – I you two is of and the the coming is digital decision-making. that at Europe, Hi time U.S. all also in sometimes bit terms and and more think systems a playing are the This of in that are the faster people is time in the the to others, much others. areas most because selling we core not additional your American moment, – it’s question, this it taking we this we with U.S. buying takes if In from the because Europe, they little

that So more take time.

little or much more in Europe. a versus U.S. bit faster less, So

Mayank Tandon

That’s in out give for constant I for XXXX but the assumption X% And was know FX-neutral growth growth? I the kind helpful. a quarter of if the the you growth what Europe fourth Okay. rate that for called currency was is in us for And the question FX-neutral what quarter, quarter? then, kind fourth wondering overall could I guys outlook. housekeeping guess, and just of the you

Roni Giladi

Roni. is This

your week, about basis currency X% we about with X.X%. benchmark about currency, average the constant are course. And question rate constant of guidance, of currency the Europe the regarding state, the the last growing the of we world, took quarter-over-quarter of from company rest and coming of grew QX Regarding at at organically,

Mayank Tandon

That’s Thanks right. All guys. helpful.

Operator

Please Kevin question is of go Sachs. ahead. Kumar The next Goldman from

Kevin Kumar

the Thanks in segment with you far my I you Roni, are pipeline? a that P&C? of is the North in bit how for progressing talk American about think level How go-to-market investment taking thinking question. activities can progress thus about the XXXX? And

Roni Al-Dor

bit. a As Alex I mentioned, little can add

the P&C, have of in have We solutions. types we three

We system core the have generic.

reinsurance – the P&C We we and the are – have of growth. All have three workers’ comp, seeing them are we part. the for

again, P&C, of are them segment, for four really we – the with already workers’ the this very slowed we repeat, are us. of relatively start unique, we the Let’s has large select are very a was deals. good type is coverage comp, solution table, – Right during waiting down. to now, deals there few just on Sapiens

We least more, have And deal contract phase first negotiation. can – we the kind hopefully another and year, maybe and one the that’s some workers’ believe comp. of we as deal hopefully, half of about – at blueprint we turn can

Adaptik on part, again, billing on. we just We build as we system. digital from the with to acquire – few we claim On invest system. system put And policy on cloud. years, remind – We the P&C we the from that administration and top the them in quickly, a together. combined all – integrate last our we We on so of data we it, build with

we after back the are now, we now, the least on a at year one with we before decide quarters few going already put to started market. Right signed. we existing the Right customer that to more investment

in and waiting the in – to we are we hope deal good this quarter pipeline. a sign next have another We

a competing a with recently positive product. this but that’s that have leader thing. that another an does something area we just we it’s episode So very market require are strong in Reinsurance, SAP,

industry. larger the We are in the

continue sign we So deals in area as well. this to

now. positive overall So right

Kevin Kumar

kind cloud Thank of That’s are new lot steady then And guess had the cloud. a helpful. progress. you. like It of question, progress. looks on A I deals

for given cloud buckets. see kind that cloud of the to the just the the that over going Thank impacts you. additional term, medium those disclose different some continue term? gross the details medium of impact gross how to margin kind software revenue margins on progress Curious how the the Curious You and over migration activity.

Roni Giladi

Hi, Roni. this is

many will talk. margin as come, headwind we this improve to the I number gross to years, we this create step one and in to that up would say some terms three gross of initial continue margin. the year years So But two the

the of we of range going XX, So XX gross raise our cloud, to the margin gross forward. improve the margin, meet if them we

Kevin Kumar

Thank you.

Operator

of from ahead. go is question Thind Jefferies. next Please The Surinder

Surinder Thind

Thank you.

number of The described it is continuation first of generally you fairly numbers were that might was Can about of pipeline of and that quite of there? you wanting the Obviously, the what pipeline currently. holding how perhaps the was the longer question wait sales If where, about wasn’t longer-term clients talking like. were discussions having as some pipeline the pipeline, the from were is kind front quarter the at that of any to being kind talk But concern of described off there, XXXX a last this that the discussion I’d the and like see when opportunities, front of looks look we there kind end robust, to also what cycle. end which impacts given there’s improvement ask like the the you maybe been point?

Roni Al-Dor

customer together we in we Yes, client improvement some one Sapiens to much the manager than on build account customer Roni and have. we pipeline, says sales. this the environment In existing success Al-Dor. that put with XXX our is investment did order or more more

marketing with a So existing and customer. we coming more together all and And the front. market, also on improving sales can of on development this what are with also on organization investment, business the we North including and we And are ideas of the sales. increase the the lot do more organs effort put America we

very recently on a in we now and big client do Right conference client with America. plan in May U.S. event We a to later also our North in did in successful Barcelona

for overall, invest So have we XXXX.

the So that we general time. still see it’s pipeline, but building answer take

So that’s answer. the overall my

Roni Giladi

after cost mentioned more this, success doing Yes, customer the just to to comment existing. from increasing reporting the team saving Roni

that business right that the time have existing we underwriting, incremental as of component digital revenue on reinsurance. additional illustration, to we’re the that, selling top able And customers. with for small our successful we’re So all application, now

So another of this layer is improvement.

Surinder Thind

talk the course the terms we of roughly year, year’s How the Is that some client of months, of over you then here. about Thank think additional provided. the about worth that Can you. average six average revenues and the pre-production A duration the color segmentation. should maybe of question segment? And you that distributed disclosures the a are about around in work? how duration projects a of that

Roni Giladi

solution solution to They application run three years. core up run differentiate two six months in are maximum now implementation months in XX can smaller need to the size from groups. that system the between are much that And implementation We XX the between can average to to business months.

much revenue cost We are selling the systems. more on

you of the three imagine revenue that can between So one years. running to most is

Surinder Thind

it. we quantitative your way this of pre-production? at already time bucket, it your first sounds majority be were the perspective, look the number? from are if currently like should percentage any into fall projects guidance at you’re think about vast that the It right then, are underway plus Got or revenues in to the there with what for which guiding. And so that Is that associated to of either point revenues already that

Roni Giladi

profitable in The the It’s two XXXX deals would say last, we’ll Both. move all we more years. the forward, the both. bucket And implementation I which going another that continue layer That continue is big the signed in piece, one. recurring which and to reoccurring is will basically and the is will from [ph] as increase eventually implementation one one. recurring upper and the overtime will

Surinder Thind

just a here. clarification apologies, of So point

start? So think to of projects get should revenue we is How it need that’s your still your guide? to that X% to like about

Roni Giladi

move the that coming which to production after from are they the mainly recurring ecosystem reoccurring to is The implementation Only No, new the from every revenue first in new new piece. ended, are revenue. the XX implementation initial the coming logo. the year between is XX we are logos to bucket, piece logo the signing and post – in

Surinder Thind

Thank you.

Operator

question next Barclays. Please Chris Reimer from The ahead. of go is

Chris Reimer

taking the bit. question. touch thank to operating wanted Hi, little for you I margin a my on

color to given the investments your the stability contributing marketing there some even and your and give moving could expansion, what’s especially and around you If teams? parts ongoing in R&D

Roni Giladi

This Roni. is

today, in operation This on we offshore up delivery basically that the our assets think geographies. the major contribute X% doing across that margin. every coming company additional X% is from our in operating have to and offshore operating additional products all This margin I impact of R&D activity. in us is factor help in creates

continue This operations. growing is to the for So we customers. our offshore Sapiens critical vehicle and

in currency, During of rate like be also as a monitor going this Therefore, market. uncertainty the increased and creates to a We XXXX, we closely moderate to cautious there. environment employment we decided macroeconomic and the forward. we on continue way, margin inflation, exchange lot

Chris Reimer

are after that the well for you other looking positioned you for perhaps Thanks in growth? the color. how you looking you’re could M&A Do just lastly, still And be Or opportunities recent feel Europe? for Great. Thanks. investments at currently?

Roni Al-Dor

are actively looking for M&A. We

We But deals. have understand This based see to that opportunity. us valuation. challenge more to we also is can drop deals. what a after. and look more that private – do still then Still team – they stopping the main start the valuation, is can dedicated the believe is and the try we more market, company to the on that do need We

Roni Giladi

one just need more I to If color. add

healthy. position, a balance sheet we are think I very from

position, We the have are cash we very all a time. and strong cash generating

now, Roni currently. in the We’d to So us every issue. when like support this coming doing the the to year. will completed as back mentioned, right we forward valuation when price to we to Again, was two And history M&A M&A. go move reasonable it’s

Chris Reimer

Excellent. Excellent. for Thanks it me. for that. That’s

Roni Al-Dor

you. Thank

Operator

go is ahead. The Gogolev Alexei question of JPMorgan. next from Please

Alexei Gogolev

wondering ask I margin growth you the bit and if from Alexei me you on revenue currency was allowing question. more XXXX constant this guidance. could Thank for is provide color Hello, JPMorgan. a to

some of colleagues So just already following what asked. my up have on

able terms North So some materialize think by Europe in And what not the maybe given grow could think past, explain assumption in some revenue than trajectory or expect you. given give whether think I versa? XXXX could give Could you in or America in you also be Thank region, terms indication in faster vice of of you’ve in headwinds? you maybe to some would a what of year. of terms you you

Roni Al-Dor

is this Alexi, Hi Roni.

that also application momentum business the the in in his you the we said comment, have. we of now right system ahead Roni solution and opportunity us coming when think have I state their from good the feel and and core that

– faster have, at will see lower that will of now European the we potentially than to XXXX a a America right to of see slowdown. We because first has while continue potential grow grow pace that territory we all, North

we macroeconomic are in And environment. right now

revenue with the profitability level. very we cautious are So also and

the growth this rate. regarding So is

profitability, In of I terms offshore we retail economy also mentioned, operation scale. of a have and as of

able to the will inflation, of currency be XX%. we We operating little to increased bit cautious because our margin. cannot put that And therefore, environment a control. XX.X% margin we improve a to We

Alexei Gogolev

Roni. you thank Okay,

and So I will said constant currency faster you the growth think between is North overall and you confirm, just Europe the X%, do X.X%. X% to America that for think than year grow guys

Roni Giladi

are North Both going of That’s continue incorrect. would to up. X.X%. currency that say I expected constant XXXX Europe potentially faster will I slightly The want grow accurate. organic to And base, – slower just a in what is to America than grew grow them with go growth on can to be the it for make XXXX. XXXX, be than slowdown, while

Alexei Gogolev

you. Thank Great.

Operator

time. are There at further this Instructions] [Operator no questions

Before call a go I statements. hours. U.S., with In to Ms. to please to this make two replay please statement, your Cohen-Ifrah call ahead internationally, Yaffa XXX-XXXXX-XXX. scheduled in In would call participants closing would remind X-XXX-XXX-XXXX. ask Israel, Yaffa that Ms. please like Cohen-Ifrah, you the her is XX-XXXX-XXX. call to And to of like I begin begin closing

Yaffa Cohen

with Innovator and always speaking for you you XX. the the soon Thank very answer call. the We note today. Thank Please much for call joining calls. March in Sapiens are follow-up you. on any participate you that, happy Conference joining to look William Blair to will Thank Tech forward

Operator

International This Conference participation. for concludes your Sapiens you Corporation Results you. the Quarter XXXX Call. Fourth Thank Thank

ahead go disconnect. and may You

Sapiens International (SPNS) 21 Feb 232022 Q4 Earnings call transcript