SPNS - Earnings call transcript Q2 2024 | Sapiens International Corporation N.V.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation's Second Quarter 2024 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-Ifrah

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

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

remind provisions to of content contain views update today will change which section like obligation that press disclaim turn published or the Sapiens of future reconciliation CEO A revise is would this Roni? or forward-looking expressly Sapiens. new to because our to morning. press call Investor and may financial measures. or before after release I of start, in been call to in of we be this non-GAAP issued opened call available Relations otherwise. via issued the to of Roni has information, we call everyone earnings projections available over today. statements. conference results A website our company the the link, in Before expectations the release will call. will a website market the we call, of the of I release provided this Al-Dor, On replay today's apply on also these or non-GAAP The in its any any events, other the refer or safe harbor forward-looking whether statements, the President to GAAP

Roni Al-Dor

for joining Thank you, Yaffa. us today. you Thank

revenue. compared profit totaled results. the reviewing XX.X% X.X% marking quarter of million, representing while reached operating Let's total year, a last start Revenue $XXX to million, $XX by second increase

solid growth. with and quarter delivering double-digit This growth delivered North Europe America execution showcased mid-single-digit

quarter, growth with margin net income. notable was in XX% a an in target range Our and profitability operating performance this the

would I details, the our discuss like Before I of XXXX priorities. to everyone business remind

and to is in SaaS leverage our investment is platform, our the second solution regions. second insurance our performance first to to key drive The transition all of model with to

platform and how use and this, in immencing insurance Gen-i incorporates we AI our happy our and AI recent providing Sapiens significant machine solutions. customers data tailored our solutions data-driven JI the have second insurance efficiency. I'm capabilities a with Microsoft the help in and and designed with successfully share core in intelligence it accelerate to collaboration our business process. the growth Sapiens are solutions innovate capabilities explain to use next unique and and decision me them we to and market Sapiens. competitive with of with Let process, for business that enables platform, to seamlessly starting process dynamic insurance their business exciting generation platform offering help doing launched with learning drive advanced milestone platform insurers intelligent, It represents quarter, the The of platform. of hyperautomation digital a stay engagement, intelligent and

across rapid now insurance no with [indiscernible] of ensures accelerating structure seamless design priority deployment end-to-end customers, growth price deal pre-integrated our For and accordingly. and by Saas XXXX. our model all platform platforms The supporting process throughout delivered the Pivoting for second implementation is businesses. line to

for Life momentum region. regions have Citi innovation a key The Life in ambitious insurance new specialty. strategic new product development, enters scale long-term Integrator also second our quarter, The in we insurance The services research America, markets. In carrier and with its quickly Sapiens we health words partnership it to expandit how modernize a leverage investment highlight business care deal platform leading continue. life investment to to insurance support accident employees, all its together North to platform performance. the drive platform, as platform company. in it me effective implement our platform signed In created to their good the robust with in and with our enables to Let of new selected our TPA positive a and this enable our the and insurance

the are market accommodate the We long-term pleased for deliver its to carrier end-to-end was care looking solution and to needs.

several and quarter, the had live Pro we solution with Pro, continue customer life in our go to underwriting Cosuite illustration upgrades. Additionally, North including progress America

cloud. North that and lives annuity the recession digital Republic Life is IllustrationPro go Insurance. digital its on the region. competitor for Sapiens solution and and cloud. of selected highlight kind consolidate enterprise an of like core manage analysis, innovating this insurance to with to Also, decision Pan direct-to-consumer ship customer policies After in Life this single Group, SaaS consolidate throughout their quarter, standard first acquire This Sapiens like extensive and Customers by policies second providing life can process to see faster America first made to product streamline experience enhancement platform Microsoft with second went live we digital expand its Microsoft is illustration itself. market suite Some insurer market. PALIG deployed insurance their America with point-of-sale enable an Insurance would PALIG possible We and PALIG portal, offerings. impowered time Sapiens and Azure a

exceptional live process IllustrationPro several and upgrade. Casualty, In user Second and providing with customer an quarter, and progressing will this are experience. agent we Property project and streamline America North accelerate went

policy and and promote in suite professional our claims core product vendor solution finance, needs of integration with rapidly augmenting seamless to to growth, and NPL industry continue consolidation liability in in We to for NPL insurers value-added innovation for risk [indiscernible] NPL by extending the medical meet the management market. solution administration, NPL invest and our capability

our are committed and leadership of market. We ecosystem proud in are to this NPL

bill business clean of insurers a between complex empower We from health of those take giving unburden to NPL a to to solution had problems business process. every advanced control words the them Our and user insurers synergy X succeed.

implemented during and signed XXXX. progress quarter has projects in Our made the competition worker X team the second significant

As the in years U.S. mentioned market Sapiens as our come. we opportunity see previous in for and a to in Canada call, this significant the

Insurance the tiers. value for end-to-end point and platform BKI, a EMEA BC is AI We ability model, rest market this all most higher an a and world. solution our SkipSuite this Sapiens I largest, quarter. for our We as line integration based. this few support Thailand. can IDITSuite, see our market. insurance Bangkok chosen offering successful bids IDITSuite in live went platform second to had to master Overall, would majority provide were AI region Master effectiveness and becoming platform new Datasuite. focus We BKI one with meet achievements. solution. and and Sapient go-live to We a Property to and leading a with regional insurer customers insurance support like Casualty our proven with we go in in including capability, the of SaaS live Moving the Reinsurance business chain are IDITSuite across insurance solution see an TierSuite, continuous of complex an the highlight for platform, see the regulations. platform in for The P&C, demand appetite now and reinsurance of generative with

this capability the effective in an legacy the digital organization. our APAC the our for for automation Insurance is also us in multiple increasing the for in is in various carriers region and This reflected currencies across space, in in previous group roll South important for life ability until a growth seen is demand EMEA our said may AI-enabled we filling in successful P&C With this over pipeline and and smaller build in in is more EMEA. capability footprint, platform The and uniquely improve regulations. to clients EMEA seconds into and drive to have call, have our market. and its support want increased In out business services. which platform Europe, Sapiens we implementation. particularly appetite Africa multi-country for offering to solutions countries, As including and with growing different to is this regions, business differentiator for global each region, EMEA languages, market demand APAC, positioned pension

bank are specialty channels We white business retail, for seeing wider labeling to insurers.

our which surge and and market recent see in pension are and reinsurers to reflected the fine-tune requirement and seeded are with trends driven platform and in and platforms their in cost of in reinsurance rate large Sapiens annuity to strengthening a pressure leading reinsurance and transformation climate the business sustain North Sapiens the individual for risk manage APAC. trends to demand for In their pension the vendor look reinsurance life market world's funerals. Accordingly, group manage solvency sales adapt are reinsurance natural and condition The we Europe, the we and to APAC due is and platform and enable reinsurance the the in by and pension Insurance at and increase of reinsurance insurers simpler and in for protection favorable South line pipeline programs for terms creating diversify. life our covering capacity as must reinsurance rise, change therefore, to insurers. solution risk America Those XXX players as our looking a a also the assumed. enable across solutions. We in interest of catastrophe with addition grow in investment, both using on seeing customers Africa and increase operations, rates, reinsurance underwriting of for comply inflation shift see space, and EMEA, such business must end-to-end growing for liability. guidelines to reassessment across current the Insurers contract. over automate and is elevate growing capital reinsurance practices. to underwriting software

Moving to activity. our marketing

participate our quarter shows Europe North in in this is typically X we X quarter, [indiscernible]. event globally, and second America, XX in and season, XX The in

generate. participants the We received leads we from will businesses potential the feedback are new encouraged that trade show and by

to on client solid In North and Austin, forward operating Our demonstrated America next financial this second you September updating call. at We our is investor in marked Texas. by growth event quarter strong the and revenue exciting look scheduled performance summit profitability. conclusion, for

We executing to priorities, leveraging transitioning investment SaaS regions. across our and key insurance XXXX including recipients effectively our are model platform

lines positive of our innovative, America, to life, success and our product North demonstrate comprehensive our in commitment momentum and deliver innovations ongoing business all solution our line in Our of in pension our globally. annuity

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

Roni Giladi

commentary for million, by was sheet ERA an of begin quarter in X.X%, Roni. followed in wrap XXXX totaled quarter million. you, X.X% reaching of basis, Thank On of up reflecting our for compared QX by flow. a grew I will quarter will of with revenue XXXX $XXX XXXX revenue the guidance XX.X% non-GAAP second second balance increase reviewing constant QX of my $XXX by the XXXX. compared growth million, $XXX results, of comments currency second the cash of total on the I to million XXXX. to Revenue and our $XXX XXXX.

$XX We of America compared XX.X% in in shifting QX $XX Africa of totaled RioCan X%. million continue to $XX to quarter, or QX previous grew Revenue to APAC our steady breakdown. XXXX. Geographic ratio to in $X and the basis million, points. million was was this quarters last increase margin compared of $XX increase Operating million $X.X $XX journey of a increase from Europe Revenue RioCan XXXX, XX.X% quarter increase was quarter million revenue several quarter. basis, in currency from which the recurring revenue and of compared rest is of year-over-year a due million. XX.X% This the million in or $XX the $XX XX.X% by North was revenues. of an mainly Revenue margin and and of and an $XX recurring RioCan million Revenue X%, total $XX services ratio million. quarter million was profit nonrecurring by XX.X% in in decrease of in company. and last higher increase software South overall comparable onetime of to million, mix. the same a reaching QX Gross million and product revenue or Revenue to postproduction to XX Profitability. XX.X% in includes from compared million improvement compared of a from to XXXX $XX XX.X% in case constant increase XXXX. revenue subscription On offshore of and second fold, year, revenue and versus X% Europe of growth was in in $X the

quarter shareholders year. and Although margin Net earlier to income $X.XX million XXXX. $X.XX was up $XX same the beyond, remained per accelerate for the for XXXX sales at gross of marketing diluted mentioned second for this XXXX. was as operating strategic of Earnings quarter into XXXX in Sapiens investment up margin XXXX due increase level the QX second improved, the growth second decision to the share attributed million, our further and from to of quarter from $XX XX.X% XX% of to

Turning to our balance sheet.

Financial in Sapiens quarter, S&P for difference As the for the due $XXX million for QX cash XXXX. of time of in Global, the to free and of Sapiens ongoing or of million had half share a [indiscernible]. has XXXX, was expert and flow Maalot April rating On confirmation confirmed and milestones. and debenture $XX of million. compared as of the million per second stable debt cash the and deposits equivalents of dividend we long-term [indiscernible] Also cash as of for $XX XX, standard AA-minus with $X global temporary million mainly also cognition between XXXX, this June part $X.XX XXXX, the totaling firm second the outlook, Adjusted to revenue quarter paid cash Services rating in confidence in short-term rating we Sapiens. while confirming XXXX reflects rating XX, The market $XX payment issue

Moving guidance. to our

We are XXXX guidance. our reiterating

in million now I back XX.X% to Al-Dor. the million $XXX We profit, will XX.X% to Roni turn call expect on non-GAAP the margin respectively. revenue and of operating range Roni? $XXX and to

Roni Al-Dor

Roni. you, Thank

highlighted This America growth growth demonstrates North Europe. in and in quarter mid-single-digit execution solid double-digit by

growth with income. in profitability was Our impressive, performance XX% particularly a net

of and open the remarks. for for to prepared This are the XXXX Operator, the in guidance. Given our year, ready we remain call confident outlook remainder our to date meeting our ends performance we Q&A. the

Operator

Blair. The question William Instructions] first [Operator Dylan is of from Becker

Dylan Becker

with how great kind Roni feedback, wanting side you strength out leverage embedded a we've give intelligence core to for in this here. you, broader you some platform. they're in a customer can the drive of systems partnership, us on in the you intelligence Dylan their for that to of Maybe ongoing what It's ARR. the mean starting Can flip decisioning called that, given A, sense mix insurance the better maybe that receptivity looking business of seen of Microsoft post-production

Roni Al-Dor

Microsoft, will Alex okay? ask answer I permission your With about to about question

Dylan Becker

Of course, course. Yes. of

Alex Zukerman

This Alex is speaking.

platform. really, customers. quite we to of looking of to encouraging. the processes. better the GEN And intelligent intelligent the be used community. good quite So in Roni far AI very, from platform with have mentioned, so get POC with of production. order general, to a Microsoft usage This very be The AI feedback around the already is service and and customer algorithmic the base see we otherwise, GenAI the not that -- provide the and to well. strategic released and general how as into in enhance massive our is market of our from feedback cloud can a only across as efficiency and power in And into is the the partnership this put but AI customer AI running market. And within interest both part are We the business We analyst really a tremendous we first a

Roni Giladi

we on I will board, new We avenue, the is Obviously, with customers all, Microsoft follow when for and the This first offering bring for and products. Microsoft, significant question. our logo up the feel this we prospects. of to powerful Sapiens Roni second with regarding of G. support is our see are also partnership again, more

with doing down conferences Microsoft So road. globally. new And are mentioned, additional the Alex we as logo together

the The customer existing is base. second one

in over the accelerate are many generate other stream, years product we that a forward, stream This cloud significant them the the have we'd line. the today going which of and can X the in in to years trend coming create XXX to recurring do transition have Obviously, but like expect of X is revenue is in to cloud, significant. year can and this revenue not next sold additional year. ARR we nature, this customers all As happen X growth we we that years. ago, but or already the many about you know, This

Dylan Becker

Okay. Great. or in Roni see you A going that seeing strong of a of will, And investments helpful. shifted That's if again? you types the pipeline Could made an broader I revenue of back market Microsoft in would there. North wins you're but accelerate some moving to really kind G here. or America Has here? sense you guys the push what know of that all? kind Maybe be Maybe transformation, great. can in at maybe America unlock Roni at have North tie there,

Roni Al-Dor

it. take Yes, I will

all have business. different you America, we X know, As of of in types North almost

remind to Comp then core we and we and you, on call our core suite including and have and we we then Workers the we component. suite the the Just then life, our decision P&C, reinsurance. our And we have the what have have have management

So as are that component overall, extended see continuing we good the life last we the suite. very and same the signed Workers new grow we these are Comp, reinsurance. mentioned deals. we we core ones both on on -- to We deals forward looking and year, in to X

the that cost So right are growth the areas PLCs more see those we now. in stable

core we plus continued think are and we and it's to the looks are on combination those component and seeing with based are And X the suite huge coming you sign that we plan improving the the I back areas that to digital, last And very we suite brought core all we so that of growth. signed, positive. now remind platform them life, we all just the years. And to And in go. the overall, on just X are in a contract you,

Operator

Kumar Goldman Sachs. of next The Kevin is question from

Kevin Kumar

trends to ask continuing there. is kind production in you're and of seeing The to of the and preproduction revenue the seeing kind software about side. kind wanted revenue of the segments strength cost decline, you're I

bit of How there So of of shakes of that do helpful. that? about maybe can drivers you the would be little out you talk a that the for the kind year, kind think remainder

Roni Giladi

can will Yes, we take implementation down. Roni this Kevin, slightly service going I This end implementation see this. G. is at preproduction of or

year, a moving One early globally the we products announced to items. implementation. line is the And that the company. remember, idea X subscription you from of are in If shift is from the all we

the subscription RioCan one is into services other The line. from revenue the

impact this we also So and has post-production products. going services, obviously, the of on the services up software the and trend implementation see on preproduction

So impacts this stream is on one phenomenon revenue that. that our

had The in second deals we first the is one in some logo early of new in delay the year. signing half

We QX of fulfill will are that customers early prospective as... this very encouraged item significantly revenue line progressing in with

Kevin Kumar

Where Great. maybe helpful. marketing where And resources What increases resources? see most on talked you one you're opportunity? Any new you segments then investments. net sales the of allocating the in think would just about of new these do color I are allocating there and you some kind Roni, market of be

Roni Al-Dor

we meaning organized the already hiring so First, so and investments, management majority the on. made of

a are have the are And territories Europe. we we we it's challenge we we majority is, on right is in and in and say working North us The in Europe board. So so on. issues many because all, but took and now, language America are -- in -- it time, that first we of

almost South it's Africa like a regions, Asia. X and So different including

also investment, the doing in all we it the sales marketing, So are overall, existing I of gross in can segments customers. and and say, in terms marketing,

position year, alliances hired the last in hired SI half of the a same the SI, we and -- year, America. manager In last in terms In hired Europe. North we dedicated we

So also is to office start there. idea to the of alliances putting all investment

Operator

from question Chris The Reimer Barclays. is of next

Chris Reimer

about you the how who And And any people not point then wondering time time sales prioritizing if Congratulations their changes results. are could core you modernizations. -- decision-making lines leads one strong following seeing transition on any or on lines the talk that, line? due want that to in anything today about if are that the system to process? there's time was transition carriers large I

Alex Zukerman

and interest are, Alex and still But carriers lot efficiency more strong management, especially today digital reduce to both how in first lot improve are their including in cloud This we be terms and market them in a in order of core a all, seeing and to data trend The wise of efficiency, event carriers is capabilities, replacement keep general, The replacement. with high AI So operational can volatile of in main beefed operational their particular drive cost they a drivers of the operating still this of core efficient. up all area. capabilities operation, is financially interest. also speaking. and -- looking in growth is we capabilities

larger their the carriers we not with a we the especially a due with bit deal Sometimes, selling see a SaaS take data with core with selling move to our and capabilities the bid their case, with turnkey diligence only processes, offering. actually but time into that perform the core, longer our solution in together platform, since so and a digital AI

analysis, aspects in core for operating in bit takes from review there's in their trend more a costs. but the business time, forward going to So more prohibiting and more solutions legacy are -- and reducing replacement the interest multiple from and them to of review a strong sometimes

Chris Reimer

long, X sales years? it's cycle, the X.X, would still say So you pretty

Alex Zukerman

deals compared of or maybe to to say, digital let's applications would to the cycle smaller, XX a the months our not for to port XX the formation. noncore changing X less of a the XX move large month of is on between, last. Sales business more area This

Operator

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

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

Yaffa Cohen-Ifrah

any contact our look welcome Yes. results us next call. further questions. have our today. We forward earnings Thank joining you you, call everyone, to on quarter to discussing you We if for third our

Operator

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

You and disconnect. may go ahead

Sapiens International (SPNS) 1 Aug 242024 Q2 Earnings call transcript