Core Insights - Sapiens International Corporation has released an updated version of CoreSuite, a policy administration system designed for life insurers, which enhances operational efficiency and customer engagement through generative AI [1][5] - The new features include AI-powered chatbots, machine learning-driven lead generation, and predictive tools that enable personalized customer interactions [2][5] - The updated CoreSuite is fully integrated within the Sapiens Insurance Platform, offering a comprehensive suite of life, pensions, and annuity products for quick deployment [4][6] Technological Enhancements - The release includes a newly enhanced conversion and migration toolset that leverages generative AI to analyze legacy data and improve productivity [3] - A redesigned user interface and user experience (UI/UX) across portals and the CoreSuite solution align with accessibility standards, making it more user-friendly [3][5] - The platform supports seamless illustration-to-application conversions and includes integrated detection for abnormal user behavior during application processes [4] Strategic Vision - The company aims to provide life insurers with innovative and practical solutions that empower agents, accelerate underwriting processes, and personalize customer service [5] - Sapiens positions itself as a leader in intelligent SaaS-based software solutions, serving over 600 customers in more than 30 countries [7] - The focus on AI and advanced automation is intended to help insurers modernize and optimize their operations in a rapidly changing market [6][7]

Q1 2025 Investor Presentation Roni Giladi, CFO Yaffa Cohen-Ifrah, CMO and Head of IR May 8, 2025 Forward Looking Statements Certain matters discussed in this presentation, that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our beliefs, assumptions and expectations, as well as i ...

Core Insights - Sapiens International Corporation has been selected by a state-run auto insurance organization to implement Sapiens ClaimsPro, a SaaS-based solution aimed at modernizing their claims operations and enhancing reporting capabilities [1][2][5] Company Overview - Sapiens International Corporation is a global leader in intelligent SaaS-based software solutions for the insurance industry, serving over 600 customers in more than 30 countries [6] - The company focuses on providing operational excellence through AI and advanced automation across various insurance sectors, including property and casualty, workers' compensation, and life insurance [6] Product Features - Sapiens ClaimsPro offers advanced functionality, including intelligent, rules-based workflows that reduce claim cycle times and expenses, and enhanced case management for complex scenarios [3][5] - The solution allows for seamless configuration without custom development, providing full visibility through robust reporting tools [3][4] Implementation Benefits - The implementation of Sapiens ClaimsPro is expected to significantly reduce technical debt by consolidating outdated systems into a single, scalable platform [4] - The organization anticipates faster processing, consistent operations across teams, and improved experiences for both claimants and adjusters [4][5]

Financial Data and Key Metrics Changes - Revenue in Q1 2025 totaled $136 million, a 1.4% increase from $134 million in Q1 2024. On a constant currency basis, revenue would have been $2 million higher [10][26][27] - Annualized recurring revenue (ARR) reached $187 million, reflecting an 11.8% increase from the previous quarter [28] - Gross profit was $63 million with a gross margin of 46.3%, up from 45.4% in Q1 2024 [29][30] - Net income attributable to shareholders was $21 million, a 1.3% increase compared to Q1 2024, with earnings per diluted share at $0.37 [31] Business Line Data and Key Metrics Changes - North America revenue increased by 3.1% to $57 million, while Europe saw a 1.8% decrease to $67 million. The rest of the world, including South Africa and APAC, experienced a 13.4% decrease to $12 million [27] - Revenue from recurring products and services increased by 14.7% to $108 million, representing 79% of total revenue [28] Market Data and Key Metrics Changes - The life and annuity business in North America showed strong growth, with multiple new deals signed, indicating insurers' confidence in Sapiens' offerings [12][18] - The P&C market is expanding, particularly in the London specialty market, which presents significant growth opportunities for Sapiens [9][10] Company Strategy and Development Direction - Sapiens is focusing on strategic M&A to enhance its portfolio and capabilities, with recent acquisitions of Candela and Advantage Go aimed at expanding its market presence and product offerings [6][8][9] - The company aims to accelerate cloud adoption among existing customers and enhance cross-selling opportunities [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to capture new market opportunities and emphasized the importance of ongoing investments in their insurance platform [5][38] - The revised guidance for 2025 includes a revenue range of $574 million to $578 million, reflecting a growth of 6% at the midpoint, despite anticipated short-term profit dips due to acquisitions [33][36] Other Important Information - The company declared a special cash dividend of $0.36 per share, totaling $20.1 million, reflecting its financial stability and commitment to rewarding shareholders [32] - Sapiens is committed to building a robust pipeline and expanding its client base across key markets, with a focus on sales, platform innovation, and advanced AI capabilities [24][25] Q&A Session Summary Question: On the underwriting workbench side, how does the acquisition accelerate traction in North America and globally? - Management noted significant traction in the underwriting space, with the Advantage Go acquisition expected to enhance their offerings and support growth in both the US and European markets [41][42][44] Question: How do you see revenue progressing through the rest of the year? - Management anticipates gradual revenue increases in Q2, with a more significant jump expected in Q3 and Q4, driven by organic growth and acquisitions [55][56] Question: Can you provide details on the currency tailwind versus inorganic growth? - Management indicated that the majority of the revenue increase is expected from M&A, with currency fluctuations also contributing but not specified in detail [61][62] Question: What is the expected transition rate to the cloud for customers? - Management confirmed ongoing transitions to the cloud for existing customers, with nearly all new deals being cloud-based, and will provide exact percentages later in the year [63][64]

Financial Data and Key Metrics Changes - Revenue in Q1 2025 totaled $136 million, a 1.4% increase from $134 million in Q1 2024. On a constant currency basis, revenue would have been $2 million higher [10][28] - Gross profit was $63 million, compared to $61 million in Q1 2024, with a gross margin of 46.3%, up from 45.4% [31] - Net income attributable to shareholders was $21 million, a 1.3% increase compared to Q1 2024, with earnings per diluted share at $0.37 [32] Business Line Data and Key Metrics Changes - The life and annuity business in North America showed strong growth, with multiple new deals signed, including a major U.S. multiline insurer extending its partnership [12][13] - Revenue from recurring products increased by 14.7% year-over-year to $108 million, representing 79% of total revenue [30] - The acquisition of Advantage Go is expected to enhance the global P&C proposition and address critical challenges in the industry [7][9] Market Data and Key Metrics Changes - Revenue in North America totaled $57 million, a 3.1% increase compared to last year, while revenue in Europe decreased by 1.8% to $67 million [29] - The rest of the world, including South Africa and APAC, saw a 13.4% decrease in revenue to $12 million [29] - The APAC region remains a priority, with the acquisition of Candela expected to support growth in this market [21] Company Strategy and Development Direction - The company is focused on a growth strategy that includes strategic M&A opportunities to enhance its portfolio and capabilities [5][6] - The acquisitions of Candela and Advantage Go are aimed at expanding the company's footprint in APAC and enhancing its P&C offerings [6][9] - The company plans to increase cross-selling to existing customers and accelerate cloud adoption to improve scalability and efficiency [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational execution and demand for solutions, particularly in North America [4][12] - The company anticipates a gradual increase in revenue throughout 2025, with higher growth expected in Q3 and Q4 [56] - Despite short-term profit dips due to acquisitions, management expects robust growth and enhanced profitability in the future [37] Other Important Information - The company raised its non-GAAP revenue guidance for 2025 to a range of $574 million to $578 million, reflecting a growth of 6% at the midpoint [34] - A special cash dividend of $0.36 per share was approved, totaling $20.1 million, reflecting the company's financial stability [33] Q&A Session Summary Question: How does the Advantage Go acquisition impact the underwriting workbench side? - Management noted that the acquisition will accelerate traction in the P&C space and enhance offerings in both the U.S. and European markets [44][46] Question: What is the expected revenue progression for the rest of the year? - Management expects gradual revenue increases in Q2, with a jump in Q3 and Q4, driven by organic growth and acquisitions [56][57] Question: Can you provide details on the currency tailwind versus inorganic growth? - Management indicated that the majority of the revenue increase is expected from M&A, with currency fluctuations contributing slightly [61] Question: What is the status of cloud transitions for customers? - Management confirmed that nearly all new deals are on the cloud, with ongoing transitions for existing customers [63]

Core Insights - Sapiens (SPNS) reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.35 per share, and showing a slight increase from $0.36 per share a year ago [1][2] - The company posted revenues of $136.11 million for the quarter ended March 2025, which was below the Zacks Consensus Estimate by 0.30%, and an increase from $134.25 million year-over-year [3] - Sapiens has surpassed consensus EPS estimates three times in the last four quarters, but has not beaten revenue estimates during the same period [2][3] Financial Performance - The earnings surprise for the recent quarter was 5.71%, and the previous quarter's surprise was 2.78% [2] - The current consensus EPS estimate for the upcoming quarter is $0.37, with expected revenues of $139 million, and for the current fiscal year, the EPS estimate is $1.46 on revenues of $555.81 million [8] Market Position - Sapiens shares have increased by approximately 8.2% since the beginning of the year, contrasting with a decline of -4.3% in the S&P 500 [4] - The Zacks Industry Rank places the Computer - Software sector in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [9] Future Outlook - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [4][5] - The current Zacks Rank for Sapiens is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [7]

[Sapiens Q1 2025 Financial Results](index=1&type=section&id=Sapiens%20Reports%20First%20Quarter%202025%20Financial%20Results) [Financial Highlights](index=1&type=section&id=Summary%20Results%20for%20First%20Quarter%202025) Sapiens reported modest revenue growth and stronger profitability in Q1 2025, driven by strategic acquisitions Q1 2025 Financial Performance Summary (GAAP vs. Non-GAAP) | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | % Change | Q1 2025 (Non-GAAP) | Q1 2024 (Non-GAAP) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $136.1M | $134.2M | 1.4% | $136.1M | $134.2M | 1.4% | | **Gross Profit** | $60.7M | $57.6M | 5.4% | $63.0M | $60.9M | 3.5% | | **Gross Margin** | 44.6% | 42.9% | +170 bps | 46.3% | 45.4% | +90 bps | | **Operating Income** | $21.2M | $20.5M | 3.3% | $24.6M | $24.3M | 1.2% | | **Operating Margin** | 15.6% | 15.3% | +30 bps | 18.0% | 18.1% | -10 bps | | **Net Income** | $17.9M | $17.4M | 3.3% | $20.7M | $20.4M | 1.3% | | **Diluted EPS** | $0.32 | $0.31 | 3.2% | $0.37 | $0.36 | 2.8% | - The company completed two **strategic acquisitions**, Candela and AdvantageGo, which significantly expand its global footprint and solution offerings in both the Life and Property & Casualty (P&C) insurance sectors[5](index=5&type=chunk) - Management noted continued **strong demand for its AI-driven insurance platforms** and high customer adoption of its SaaS model[5](index=5&type=chunk) [2025 Business Outlook](index=1&type=section&id=2025%20Business%20Outlook) The company raised its 2025 revenue guidance due to acquisitions but lowered its operating profit outlook Updated Full-Year 2025 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | **Non-GAAP Revenue** | $553M - $558M | $574M - $578M | | **Non-GAAP Operating Profit** | $98M - $102M | $94M - $96M | | **Non-GAAP Operating Margin (Midpoint)** | N/A | 16.5% | - The downward revision in operating profit guidance is attributed to losses from the AdvantageGo acquisition and integration costs, with a total negative impact of about **$5 million** at the midpoint[5](index=5&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP metrics, excluding certain items, to provide a clearer view of core operational performance - Sapiens believes non-GAAP measures provide useful information to management and investors for analyzing financial and business trends[8](index=8&type=chunk) - Adjustments to GAAP figures to arrive at non-GAAP measures include the exclusion of: **amortization of capitalized software and other intangibles, capitalization of software development, stock-based compensation, and acquisition-related costs**[9](index=9&type=chunk) - Annual Recurring Revenue (ARR) is defined as the annualized value of revenue from customer subscriptions, term licenses, maintenance, application maintenance, and cloud solutions, calculated by multiplying the most recent quarter's revenue from these sources by four[13](index=13&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the unaudited condensed consolidated statements of income, balance sheet, and cash flow [Condensed Consolidated Statement of Income](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20INCOME) Q1 2025 vs Q1 2024 Income Statement (in thousands USD) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenue** | 136,105 | 134,249 | | **Gross Profit** | 60,660 | 57,560 | | **Operating Income** | 21,196 | 20,522 | | **Net Income Attributable to Sapiens' Shareholders** | 17,936 | 17,360 | | **Diluted EPS** | $0.32 | $0.31 | [Condensed Consolidated Balance Sheet](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEET) - Total assets increased to **$714.0 million** as of March 31, 2025, from $691.7 million at December 31, 2024, primarily due to a rise in Goodwill and intangible assets from $302.5 million to **$329.8 million**[32](index=32&type=chunk) - Total current liabilities rose to **$194.9 million** from $149.6 million, largely driven by an increase in 'Accrued expenses and other liabilities'[32](index=32&type=chunk) - Cash and cash equivalents decreased to **$143.4 million** from $163.7 million at the end of 2024[32](index=32&type=chunk) [Consolidated Statement of Cash Flow](index=11&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOW) - Net cash provided by operating activities was **$25.4 million** for Q1 2025, an increase from $18.5 million in Q1 2024[33](index=33&type=chunk) - Net cash used in investing activities was **$28.7 million**, which included **$16.3 million** for business acquisitions[33](index=33&type=chunk) - Net cash used in financing activities was **$19.8 million**, primarily for the repayment of the Series B debenture[33](index=33&type=chunk) [Reconciliation of GAAP to Non-GAAP Results & Supplemental Information](index=6&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20RESULTS) This section reconciles GAAP to non-GAAP results and provides supplemental data on revenue and key performance indicators Non-GAAP Revenue Breakdown by Service Type (Q1 2025 vs Q1 2024) | Revenue Type | Q1 2025 ($M) | % of Total | Q1 2024 ($M) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Software products and re-occurring services | 108.1 | 79.4% | 94.2 | 70.2% | | Pre-production implementation services | 28.0 | 20.6% | 40.0 | 29.8% | | **Total Revenues** | **136.1** | **100%** | **134.2** | **100%** | Non-GAAP Revenue by Geography (Q1 2025 vs Q1 2024) | Region | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | North America | 56.9 | 55.2 | | Europe | 67.5 | 68.7 | | Rest of the World | 11.8 | 10.4 | - Annual Recurring Revenue (ARR) grew **11.8%** year-over-year, reaching **$187.4 million** in Q1 2025 compared to $167.6 million in Q1 2024[25](index=25&type=chunk) - Adjusted Free Cash Flow for Q1 2025 was **$23.0 million**, a significant increase from $17.1 million in Q1 2024[30](index=30&type=chunk) [Debentures Covenants](index=12&type=section&id=Debentures%20Covenants) The company confirmed compliance with all financial covenants for its Series B Debentures as of March 31, 2025 - The company was in **compliance with all three financial covenants** for its Series B Debentures as of March 31, 2025[34](index=34&type=chunk) Covenant Compliance Status | Covenant | Target | Actual | | :--- | :--- | :--- | | Shareholders' Equity | > $120M | $460.6M | | Net Financial Indebtedness to Net Capitalization Ratio | < 65% | (67.66)% | | Net Financial Indebtedness to EBITDA Ratio | < 5.5 | (1.80) |

Financial Performance - Sapiens International Corporation reported Q1 2025 revenue of $136.1 million, a 1.4% increase from $134.2 million in Q1 2024 [2][18] - Gross profit for Q1 2025 was $60.7 million, up 5.4% from $57.6 million in Q1 2024, resulting in a gross margin of 44.6%, an increase of 170 basis points [2][18] - Operating income rose to $21.2 million, a 3.3% increase from $20.5 million in Q1 2024, with an operating margin of 15.6% [2][18] - Net income attributable to Sapiens' shareholders was $17.9 million, reflecting a 3.3% increase from $17.4 million in Q1 2024 [2][18] Strategic Developments - The company signed deals with new and existing customers and completed two targeted acquisitions, Candela and AdvantageGo, enhancing its global presence and solution offerings [3] - Sapiens is experiencing increased demand for its AI-driven insurance platforms and strong customer adoption of its SaaS model [3] Guidance and Outlook - The company raised its 2025 non-GAAP revenue guidance to a range of $574 million to $578 million, up from the previous guidance of $553 million to $558 million [3] - Non-GAAP operating profit is expected to be between $94 million and $96 million, with an operating margin of 16.5% at the midpoint [3] Geographic Revenue Breakdown - In Q1 2025, revenue from North America was $56.9 million, Europe contributed $67.5 million, and the Rest of the World accounted for $11.8 million [22] - Software products and recurring post-production services represented 79.4% of total revenues, while pre-production implementation services accounted for 20.6% [22] Non-GAAP Financial Measures - Non-GAAP gross profit for Q1 2025 was $63.0 million, with a non-GAAP gross margin of 46.3% [2][19] - Adjusted EBITDA for Q1 2025 was $25.5 million, compared to $25.4 million in Q1 2024 [20] Cash Flow and Financial Position - Cash flow from operating activities for Q1 2025 was $25.4 million, an increase from $18.5 million in Q1 2024 [26] - As of March 31, 2025, total assets were $714.0 million, with total liabilities of $253.6 million, resulting in shareholders' equity of $460.6 million [28][32]

Core Insights - Sapiens International Corporation has been recognized as a Luminary by Celent in its 2025 Policy Administration System reports for EMEA and APAC, highlighting its excellence in functionality and technical capabilities [1][2] - The company also received the XCelent Award for Breadth of Functionality and Customer Service in the EMEA edition of the report, showcasing its commitment to customer-centric solutions [1][2] Product Features - Sapiens IDITSuite for Property & Casualty is an AI-powered, end-to-end insurance software solution that supports various functions including customer acquisition, billing, finance, claims, and renewals [4] - The platform features a modern user interface, embedded Power BI charts for data visualization, and comprehensive API capabilities, enhancing user experience and operational efficiency [3][4] Strategic Partnerships - Sapiens leverages strategic partnerships with Microsoft and OpenAI to integrate advanced technologies into its solutions, providing valuable insights and streamlining processes [3] - The application of GenAI within the platform allows for document interrogation and prompt-based summaries, further enhancing functionality [3] Market Position - Sapiens has maintained its Luminary status across all core Property & Casualty domains since the introduction of the Luminary category, reflecting its sustained leadership and innovation in the market [3] - The company has consistently won Celent's XCelent awards annually since 2018, underscoring its market leadership and commitment to innovation [3]

"I am pleased to welcome the Candela team and customers as part of our strategy to continue to expand our presence in the APAC region and enhance our sophisticated life insurance platform" said Roni Al-Dor, CEO and President at Sapiens. "We will continue to support Candela's customers and products, increasing value across the entire insurance lifecycle and supporting insurers' digital transformations with a comprehensive product proposition and a diverse range of service capabilities." "Joining the Sapiens ...