Q3 2020 Sapiens International Corporation NV Earnings Call
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Ladies and gentlemen, thank you for standing by welcome to the Cpn's International Corporation third quarter 2020 results Conference call. At this time all participants are in a listen only mode. A brief question intercession.
Well followed a formal presentation for operator assistance during the conference police presence stars here as a reminder, this conference is being recorded November 5th 2020.
With us online today, Mr O'neill door President M C. L. A Mister Rooney Collodi C F L.
Before I turn the call over to Mister Rooney outdoor I would like to my participants at this conference call, making projections or other forward looking statements and the safe Harbor provisions in the press release issue today also apply to the content of the call Cps expressly disclaims any obligation to update or advice any of these forward looking statements, whether because of future events new information.
A change in the to use our expectations are otherwise during the course of the call today, we will refer to non-GAAP financial measures a reconciliation schedule showing gap versus knocked up results have been provided at a press release issued before the market opened this morning.
Pay of this call will be available after the call and an Investor Relations section of the company's website or if he has a website, which is available in the earnings release that we published today.
As a reminder, the quarterly earnings release issued before the market opened this morning, and it has been posted on the company's website at Www Dot sapiens Dot Com I will now turn the call over to Roni outdoor precedent C O C peons Roni.
Thank you all for a dual welcome to review I will first quarter financial results.
I will begin with an overview of the call to follow by an update on the business.
Following my comments when they get a D would provide the details of your of the first quarter financial results cause he shouldn't secondary offering and discuss the key metrics an old guidance for the remainder of 2020.
Sapiens continues to deliver stomach is a fusion it cause he geography's and product lines.
Third quarter revenue grew like 18.5% drink Bell solid so did you feel full minutes to expanding you open those America and level of jello existing customer relationships with upsell edition of products and services.
This quota we increased revenue from North America by 12.5% and you're like 40 per cent, mostly due to the peons fifth Avenue.
Oh European revenue goes well supported by recent acquisitions, particularly from some cool more industrial gin.
We made though first step endorsee gin to winning new customer and then both of these we say acquisition of some cool Moore, which help us to establish a strong local base and will support the airports fulfilled are expanding about it.
We have also and then they said some pretty soon steam endorsee gin to support the goals the support she loves sapiens to embed into the digital culture and succeed there's a general like almost always stable.
Hello, London expand slaughter G. He's an efficient and effective way to go and highly regulated and regionally diverse global insurance market.
And screwed over presence and comprehensive product offering support by the local professional team is significant.
Betty of advantage.
In a very since acquiring Coca Cola, we have started gaining momentum in the region and then several sips pipeline and says team to support these new opportunities.
We continue to make substantial gains in North America is whether these.
This summer, we quiet Boston base Delphi living vendor of software solutions for P. C code is focused on medical and health care professional liability also know as a M. P L market.
And do we sell pile acquisition, they probably within then so valuable position to the medical insurance market is H O P. N C co sweet.
M P. L content increase though M. P L domain knowledge as well as extend our most of America customer base.
Combined with Sapient solutions relationships and the resources. This acquisition and then our position as a living solution provider and then U S insurance market.
The global shape in steam deliver several new wings and go lives in the South Dakota.
Let me highlight a few.
Plan, the pet insurance provider with the most comprehensive covers age in North America. So, let's all go Sweetveld popping casualty to provide a cloud base fully digital experience for the customer.
And the expense their product offering.
After an extensive serge.
Chose sapiens for boss I'll insurance knowledge and technology that allowed them to define their business needs and requirements quickly.
With some financial Gould Preselect assistance policy ball for popping casualty the Canadian insurance provider.
He did the modern solution it could solve challenges and the quote to issuance bosses and they allow enterprise why delivery for the white label products.
Last week, we announce it go life, we have a mutual insurance ghoul with recipients policy platform.
These fully Configurable solution, and then household mutual insurance ghouls to all out a new innovative product automated business bosses and then so position that efficiencies too quickly lunch new products to market and generate new revenue streams.
Depends continuously invest to improve our for the functionality and advanced technology.
And your sales quota, we learned several upgrades and enhancement.
We lounge O P N C N as insurance co platform for the Ducks region. After acquiring some cool morning early 2020, we.
We adapted decipiency between four property casualty Insipience insurance master to the dusk region.
Did sweet them as insurance Master and two in Cloudburst plots home that does sentimental components of sapiens plots awful PNC and offer a wealth of digital features.
Hip in school Sweet for life is not available or Microsoft Apsos.
These plots on combines call insurance functionality with data analytics and digital suites that can now deployed Microsoft's the jewel cloud.
To keep pace with evolving needs and customer needs. We launch a new version of a cloud based <unk> sequel suites will email in APEC to facilitate digital customer experience and then passes automation. This new version of symptoms. He did sweet for property and casualty.
Blink song and dance Man and provides value you know most domains.
Our decision platform to manage business logic and organization is gaining momentum and.
And we see a growing up alternating from both lost the one banks as well as insurance kiss it cause all pills.
Decision as strategic plateau for any organization that is getting ready for the future aiming to ever clear visibility in the business logic in decision processes.
We continue to expand our ecosystem to support our customers and again this quarter, we add several innovative partners to away cause systems.
To improve our Walker competition plateau, we partner with a sure sign to incorporate electronic signature technology into our local competition platform.
And God guns, a I two flight addictive inside to walk with compensation until I think and claims processes.
It's also partners with technology does recognize lead there in advance driving please canady sees for the automotive industry.
Cause I just looked for vibe and your level of drive the risk assessment data for automotive insurance carriers, when they did not make basis.
Making it possible to provide more competitive personal drive your insurance premiums.
One hand to shake model will we be longterm relationship, we sold customer and provide them, we sell a software implementation services and long term maintenance engagement.
He was a strong drive it to our proven Linden extend modem.
It's sapiens portfolio of products and services is going this put us in a strong position to announce upsetting closer to put unities.
We have examples of customer lending and PNC, and then expanding into like in a new T and vice versa.
Expanding digital engagement and data analytics.
In addition, we have multiple example of course geography's expansion, giving the nature of some of our global customers.
We see an increase demand four minutes services, because all of our products and the agent in terms of service is more than a minute services offering both tremendous value to our customer joined COVID-19, which is in case customer communication and needs and they allowed the code is two four.
Clothes on their businesses, while we manage their platform.
According to the insurance industry Annalise the insurance sector is trying to normalize anything starting to develop after the initial impact of COVID-19.
The technology spend is being cause they play all it does is ensured live they cognize that they need to transform digitally and shoot digital channels and products with end to end automation of processes. It caused their entire offering both internally and customer facing there isn't.
Increased acceptance to cloud implementation to enable fast and responsive access from anywhere Morgan mowing sure, let's see to remain competitive they need to be a gel secure connected and did you tell the neighbors seconds is well positioned globally to deliver.
These products and services 'cause or for the clients and the the city is.
Oh, well digital offering enable customers to achieve digital transformation it a little too and then still services and offerings.
We help insurance close to get between customer of expectation insurance readiness and help them to digitalize their businesses.
I will 2020 virtual saw me. It was held in early October was a key event to highlight these capabilities and choke is a strong product offering.
Around 600 participants they presented the new one that you as a customer as well as eight partners and seven leading research analyst.
P C personnel treat they saw me.
The event feature 70 session led by sapient excessive bleeding industry analyst in shortage partners include use of golf on technology boarder can start the jeep with a specific focus on digital transformation.
Some it provides an excellent opportunity to and then sell market presence showcase our latest innovations and strengthen our customer connection and we did it virtually.
Lastly, we recently received valuable recognition by silent and golf now we continue to invest heavily in innovation technology and ensure that we offer our customers that most modem and functionality read solution.
Sapiens underwriting full once and then North America excellent to waltz for new business in the underwriting function in IP in life insurance. He sees the 11th excellent towards <unk> received to date.
<unk> was the only insurance solution for vital position as a leader in two girlfriends reports for both slight platforms and P C platform and you'll see.
<unk> called Sweet for license pension was recognized as a leader got the magic Quadroon for life insurance policy of recession system and you will.
Tap into the Tweeds for property and casualty receive the little recognition for the second year in a hole and Gashouse Magic Radom for no life insurance plateau in your.
As we close out to you within a song position, we are going with existing customer, we need new customers and building a pipeline for next year.
In closing sapient, so they simply prize at $100 million secondary led by Pier, one investment banks and we were pleased to see that they did was oversubscribed.
The proceeds from the offering will be yours for general corporate peppers, and mainly M&A.
<unk> enjoy close relationship with over 500 global customers. We have built a broad portfolio of insurance sorta solution of course PNC in Latin pension, we continue to enjoy consistent organic goes with an excellent record cold Mentink, all goes with strategic M and a b.
400, and the call to Wanna get a D. I would like to say I'm extremely please we sell a global team performance and part of the success they've deliver in an unusual challenging business environment. Thanks to the team focused in execution.
We head into the close of the year, we said solid outlook for 2021 now.
And I was even stronger balance sheet.
We are well positioned for continued goes in the long run.
Now turn the call over to oversee for wanting to let the please go into <unk>. Thank you Ronny I will review the third quarter alone got result, followed by comments on the balance sheet and cash flow.
And and with our updated guidance for the remainder of 2020.
Q3 was the second quartile, which was influenced by COVID-19 is such many technology companies have been able to adjust to the new way of doing business, including sapiens.
The adjustment is translated into improvement of our top line revenue and operational margin actual and guidance.
This quarter, we consolidate they'll fight in a result of operation for two months.
Revenue.
Revenue in the third quarter of 2020 increased by 18.5% to $98 million from 82.6 million dollar in the third quarter of 2019.
Ah revenue North America totaled 50 million dollar an increase of 12.5% compared to last you mainly due to strong growth in <unk>.
Europe revenue totaled $42.4 million, a 40% increase since last year generating from PNC and life in annuities.
Revenue in APAC in South Africa decreased from $8 million to five 6 million dollar in Q3 of 2020.
The curious as you too few projects going life.
Revenue from North America, and Europe, combined represent 94, 3% of our business.
Golf ball for this quarter totaled $44.2 million compared to 30 $617 million in the third quarter of last year and in case of 24%.
Al Gore's margin this quarter increased by 70 basis points, 245.1% from 44.4% in the third quarter of last year.
As a reminder.
Due to our business model of one hand to shake economically gross margin should be higher by an estimated of 7%.
Due to the fact that we are in hinting a product is about to fall delivery make any of them.
Or personal expenses are M. D N S. G N a including distribution of calculus, some cool and they'll fight increased by 13.7% from $23.2 million to $26.3 million.
Moving to operational appropriate.
Oh, placing profit totaled $17.9 million this quarter compared to $13.5 million in Q2 of 2019.
And 16.8 million dollar in the pile quarter and represent.
32% improvement.
Open at the margin, increasing the third quarter to 18.2%.
A 180 basis point improvement from Q3 of 2019.
Ability to improve margin in Q3 resulted from.
The new <unk> with respect to COVID-19, and associated level of reduce expenses.
Integration with Delphi, which impacted September results.
Continuous improvement without offshore program, which today as a present, 40% will fall walk for.
Dark and interest expenses.
This quarter, we had $1 million interest expenses, mainly related to al debentures.
Buck's expense was 2.9 million dollar, reflecting the effective tax rate of 17.1%.
We estimate that these tax rates will continue also in Q4 of this year and he's a result of the new tax benefit program, we implemented which has it walk through the effect.
We estimate that we will benefit from this program also for the used to come and it will review cell ongoing effective average tax rate to arrange of 18.5% to 20% starting from 2021.
Net income attributable to stop and shareholders for the quota was 13.7 million dollar compared to $10.4 million in the third quarter of last deals.
Diluted EPS inquiries 227 sent from 21 plus deal representing the Gulf of 28.6%.
Turning to our balance sheet.
As of September 30th we had a cash and cash equivalent of 131.7 million dollar and total debt of 120 million dollar spread evenly until January 1st 2016.
To strengthen our balance sheets on October 20th we close the public offering of 100 million dollar without the impact of the issue.
The main reason for the capitalized was to allow us to go with the company and continue with our M&A strategy.
Two other important objectives were to increase liquidity and to broaden our industrial base.
Both of these objectives have successfully been minutes.
In the third quarter, we achieved 14.5 million dollar in adjusted free cash flow.
We'll continue to have icon vision for mid profit to adjusted free Cashflow.
Q3 represents 105% conversion and the accumulated last nine months represent 90% conversion for net profit to adjusted free Cashflow.
In closing I would like to turn into our guidance for the full year of 2020.
We are raising 2020 guidance for both revenue and operating margin on.
On the revenue side, we increase the range of $381 million to $383 million out from the price range of $376 million to 381 million dollar, reflecting yearly golf from 2019 of 17.3% to the meat of the range.
Guidance represents 8.5% organic growth and the risk is driven by email.
On the profit level, we increase the range from 17.6% to 17.7% on a full year's basis.
And reflecting 165 basically sportive movement from last deal operating margin of 16%.
As a result of the carpet delays as of today additional 3.4 million shares were issued we estimate the she'll count for calculating EPS for you fool will be approximately 55 million chairs.
Two Samuel right.
<unk> business model give us multi pile laborers of wolf organically and swimming, a because existing and new customers.
<unk> boy that lines and services.
In addition, our efficiency program and offshore operation allow us to continue to expand margin constantly.
[noise] Covid 1980 slide show to negative revenue impact, we believe that the COVID-19 revenue impact on the mid and long term could be positive to our golf as it can drive insurance scared him to invest more in <unk> in court system transformation.
On the profit level COVID-19 at the positive improvement on our operating margin.
No I would like to thank the call back to only adult.
<unk>.
Thank you horny sapiens customer success team is doing an outstanding job, providing critical support all customers globally safe.
<unk> Global sales team continues to focus on signing new business in these challenging market condition.
Our leadership team remains focus on delivering golson margin expansion as we execute again, so a longterm objective of improving shoulders value. We should focus of goes strategy is punk team and improve balance sheet sentences well position Fox at six in golf.
I would like now to close our preparing mouse and open the call for questions. Please.
Thank you.
At this time, we will begin the question and answer session. If you have a question. Please press star one if you wish to cancel your question. Please press star if you're all you'd think speak our equipment honey lift a handset before pressing the numbers. Please ask you a question in a loud and clear voice. Your question will be pulled in the order they are received.
Well, we put fair questions.
The first question is Sterling Hattie So J P. Morgan. Please go ahead.
Yeah. Thanks, Hi, guys. So wondering if you could maybe give us a little bit more color around the appetite for these digital transformation projects in Europe versus North America in particular in light of some of the you know the recent changes with COVID-19, with some of the European countries looks.
<unk> to potentially locked back down.
Hi, This is only a door a in terms of digital we see big demanding COVID-19.
As we say COVID-19. These did some <unk>, what we call a wakeup call for the insurance company to expand and to invest in digital and they we see the same level of interest for me in North America and U S. At the beginning it was mainly on the PNC, but type now we also see on the lives.
Side as well.
So right now, we'd say close to equal as you know <unk> heavy invest.
And the last a year, we did what we call leapfrog in this area.
We plan to <unk> in your new vision and you upgrade in this area. So we saw looks positive.
Alright, great and then with the acquisition that you've made what type of integration roadmap are you planning Uhm, you know across the product portfolio for these acquire technologies.
It's a very dependent fifth acquisition that we are doing as you know we did the 15 acquisition and the last day.
Yeah, it's almost any is so it sometimes we have a few acquiring technology company. So we are fully integrate them. If we are buying legacy it's mainly full day, hey customer base and then we all have a bringing sapiens pulled up and then and there is a few acquisition that we may.
This holiday digital so we all taking the best for each company and we build the best solution from there too.
Great. Thank you.
Thank you.
Next question is from my Camden <unk> Company. Please go ahead.
Thank you I, Ronnie and Ronnie just a few questions first congrats on the quarter yet again good results. So I just wanted to get a feel for 21 I get that it's probably too early to give guidance, but maybe just anecdotally given the pipeline the pace of conversion deal clothing.
New logo, whether it's better off what is your best a guest room at this point on how 21 might shape up verses 20, I got adjusting for emanate obviously.
I M I L V. Suzanne Maloney G. M. Obviously will provide guidance say after we announced do for results, which will beginning of 2021, but if we say the trend right now we talked about this yesterday. So I've been just going to go organically that base of 8.5%. So I would say this.
We'd be the baseline.
COVID-19, Kim adversely some insurance.
A boot on hold some of the investment so that they had a globally in this state and also New York, but basically continue and right now a company's understand that they need to adjust to the new normal we see some released on the investment and we are starting to build a bigger pipeline a.
A again both of them being C N life, USA and York, a but currently <unk>.
Framework obesity the thing that we see will provide full guidance into next him.
That's helpful. Ah Bonnie just to clarify did you say, 8.5% organic growth in fiscal 20.
Bullock based on that got into the Superbowl I did today for this year. This is another.
Right and then how much contribution from emanate you expect at this point and physical 21.
A currently the additional impact will be about a.
Probably about 627 million dollar coming from Delphi a at this point of time.
Got it that's helpful and one final question on margins. Obviously, you guys have been doing a tremendous job on the margin front quarter after quarter I just want to get a feel for how much of some of these savings that you implemented in response to the pandemic will stop you run off so what does maybe a good baseline to think of margins for this year.
I just need for those expenses and then maybe some.
Qualitative commentary on 21 would be helpful as well.
So we did the analysis and telling me about this and we see that probably COVID-19, they somehow or somewhat slow.
Revenue base, but they're very contribution deposit level, we ask that made this a self to 1%.
A we think that a when COVID-19 will be fast potential will end, Ohio, all faith, but with more expensive. So I would say half of the saving will continue and I have not.
Tony Saudi just one final point ought to put you on the spot, but just given the margin performance. This year I just want to get a feel for next year I mean should be at least expect margins to be flat or maybe do you think you could still leverage up if brought does accelerates from that in and a half percent organic level.
I always say that a given the kid and state and if it stayed the kittens state. The COVID-19, we will be able to improve margin constantly on the moderate pace. We've seen that 50 basis point you over to you. This is something doable for us taking into consideration what we are doing with also.
<unk> government efficiency in the government.
Great. Thank you so much and congrats on the corner. Thank you very much. Thank you.
The next question is some of that sorry of William Sir. Please go ahead.
Hey, guys. Thanks for taking my questions and.
Nice job on the quarter there I I wanted to check first it's just a little bit on the competitive environment you you've seen obviously another compatible public and won't get acquired the private I can we just love to understand sort of cause that's in fact with a better find at all.
And in North America, more specifically or not a market and have you seen any changes in competitive behavior.
I bought one it is only al Dor, a and you know what you're talking about the above the other vendor is is that correct. So we don't really see them and number again, but just go yeah yeah.
Yes Yep.
Yeah.
<unk>, yes, you'll like Jessica was public just took over by the private equity so.
So what we so as you want <unk> just to remind you will have so far a business is your <unk>.
Alright, so the old so we don't see both of them in the territory. So it still demand compared to always guidewire and some local.
So we'd say again, we are in a competitive environment, but not as difficult as in U S.
We are talking in USA right now we are really in particular, that's like darker more going to the high you'll deal we don't see them in the mid T. As in low Teal and that we are also in this area at this moment and they've majestically go we don't really see them on the PNC, we have more see them on the light side.
So overall, a although we don't really see changed should we believe that in the next day or two we will start to see that taking you off that day.
And it just totally manual we become strong against all getting York, we a golf.
It put us in a leading position and they've been 10, guys why they New York, So let's assume that link will do the best they can do it will take them a few years, so and they we are putting a lot of pay full day, we see barely was the dog we saw the region.
So we we from sapiens do the best we can do in order to keep our position and hopefully can be your number one and kept sofa a U S. We have a political call sweet adopted we see more momentum we put many clients on production. This came full may last seal sales.
Now building Gal says eh.
Terms of the insurance is also part of the PNC, We don't see all the company that you mentioned the real competition is coming from a C. B and we are competing head to edge wisdom, sometimes when sometimes slows but again. This is the area that we see mola mola demand as well.
Thought it was really helpful. And then you know you've talked about sort of that you mentioned your comments you've mentioned the pressure instead of customer up so I guess, let's start with new customer some options on how to <unk> conversations with no customer going are you seeing them convert faster it cause of Covid or you can have been slower and then.
As you Costco Upsells, while you have some ice when how you think of conversation progressed other improving from a few months ago. Other about the same page how do you think about the pay for both new and existing customers.
A.
You know at the beginning of Covid everything everybody was shock. So it was a lot of companies put things on hold.
Like a a feel for a project that say all of the amount of the bid contract.
So we'd say.
Right now I think the main area. That's most of the company I'm looking for digital transformation and they also any kind of digital solution. Then we believe that we will see more and more demand.
There is a more or less the same still a you see some slowdown.
People I'll take them to me, it's time to make a decision.
To do more check, but again, we see we continues to see paternity as well.
Got it got it very helpful. Thanks, guys. Congrats thank you.
The next question if I'm Cathy about that Barclays. Please go ahead.
Hi, This is Chris Reimer on <unk>. Thank you for taking my questions I'd like to just continuing on the previous colors question.
Regarding how you're skiing pre covid verses.
Now would you say that the pipeline has expanded as compared cheese pre pandemic.
I. This is the only G. A no. The answer is no I think COVID-19, the reduce the pipeline that we had a because the a change of behavior <unk> existing customer in new <unk>, but as we continue right now.
So is that a good months in D. C environment people out more understanding. This is the situation and we are starting to build a pipeline a upgrade again not same is what we had before COVID-19, but it's all been Oh I see okay and also touching.
On also another question that was brought up regarding competition, we've been getting a lot of interest you and see peons. So I wanted to ask.
What.
How do you see your software I, just cherish offering and how does it compared to some of your larger competitors and is that an area of focus for Ya.
I. This is the only G. A so basically vehicles competing on two fronts with the competitors first of all on the software side and the other one is on the services side most of our competitors do not they take our business model, meaning daily interaction with a C.
And integrate bill like Ernst and young Gov, Jim and I They look.
And here, we are competing against these guys a on the software side, we are competing with all the big names Guidewire Majesco dark gray for that a according to analyst a nobody mentioned silent and golf nail a we all position part of the looting go both on <unk>.
<unk> on life in Europe, and in the states a we still have a way to go into state, but we are getting closer to the leading group a just doing mind weak why are they stole a living in 2017 needed after adopted and right now we are very close to the living room.
In this state so position where available so far side and on the services a lot of the fourth victim custom you'll see this is the one stop shop see a lot of advantages available in both sides. So we're very competitive in this area also.
Okay. Yeah. Thanks, that's very helpful.
Gotcha.
You, creating by doing more M&A over the over.
Over the near future.
And I'm not sure I, 100% understood. The question, but we'll try to answer a I think I can and I wouldn't try I will try to answer I would thought on so M&A is a a very integral part of our strategy and this is something that we are focusing.
And on top of the organic side, we're investing effort, both money and time and attention in order to execute them that the value that we see a significant effort for example, expanding geographic presence that we have expanding customer base expanding knowledge of people who know ensure.
Once.
And these strengthen our position and we as a company that we integrate the company that we acquired and were not holding company been able also to get to the profitability level of students through the acquisition and the platform that we have so on the revenue level it allow us to.
So basically level, our opportunity of golf and in the same time because of.
Big size company, we are been able also to match our board with the other companies to our profitability level in order to expand margin.
Okay. Thanks very helpful.
Just a follow up question I also asked about valuations I mean, what kind of multiples do you see when you when you comment.
The market and we look for a more.
Have you seen increased valuations over the past year, because a lot of big players a lot of large players went into the market there recently.
Yes. The answer is yes, the validation is going up a Tibetan again remind you will depend of A.H. companies difference depends of course depends profitability between anecdotally this fast so.
There is a lot of parameters. We are also when we acquire companies not just one factor is sometimes 20 Telsey fractals.
But the overall devaluation because there is a.
Huge demand in the insurance and people understand there is a lot to do in the insurance space in a weaker second they're in the right time.
I see okay. Thank you and again congrats on the quick for the great quarter. Thank you. Thank you very much.
The next question is from kind of.
The only portfolio management. Please go ahead.
Yes. My question is this.
So that the organic growth in 28.5% as your baseline for 21 on the other hand, you said that the pipeline is weaker because of the covert so I'm I wanted to ask how do you reconcile these two two different triggers.
And I ate and this is on energy what they say that the guidance for 2020 is 8.5% what we said in the beginning and think about this we are three quarters in 2020, we recovered 19.
And what we are seeing in the past few months is ramping up of pipeline a globally right away and so what we said that we think an estimate and we'll provide full guidance beginning of 2021 the level of growth organic growth probably will remain also in 2020.
One meaning 8.5%.
Okay.
Thank you very much.
And good luck. Thank you.
And the next question is some partners. Please go ahead.
Color come out on the corner.
Two pioneers in this industry, which didn't even have a name two years ago now this insurance check.
As an investor I am asking what is the dividend policy is the company considering these types of dividend by 36% I thought that was a reaction to causing an incentive money, but now I'm not sure.
Hi, This is a on energy sub answer the policy of distributing dividend of about up to 40% of the not a net GAAP income net three non-GAAP net income up to 40%. This.
This year 2000, a 20, we distributed half of the amount and it was it was basically in after March immediately after covenant in basically show up or appear and this was the reason offerings with negation, we feel much stronger right now we understand that.
Budget early and we'll provide the probably fully dividend amount in 2021.
Okay. Thanks.
Thank you also on the.
How is it I know you answered this to me, but the revenue trends.
The extensive traveling expenses show expenses exhibition expenses, how is the answer to the last year.
Hi, and this is the only obviously is to reduce the amount of travel expenses a cost not only as DNA, but also the other in the delivery people also were flying not only in their DNA also the sales team of course, so it reduced the amount we asked.
Admitted the covenant in impact including to have in all the rest and after if the revenue is about 1%.
Okay. Thank you.
Thank you.
There are no further questions at this time before I ask Mr. outdoor to go ahead with his closing statement I would like to my participants that a replay of this call is scheduled to begin in two hours in the U.S. Please call 1877.
Four 560 009 in Israel. Please call 039 to five five 900 and internationally. Please call 97239 to 559 zeros there Mr. Outdoor would you like to make your concluding statement.
Yes, thank you to the operator and thank you to all the participants who joined US today have a good day.
Thank you. This concludes sapiens International Corporation second quarter 2020 results Conference call. Thank you for your participation you May go ahead and disconnect.
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