Sapiens International Corporation N.V. Q1 2023 Earnings Call
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Speaker 2: Ladies and gentlemen, thank you for standing by. The conference will begin shortly.
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Speaker 2: Welcome to Safey & Corporation's 2023 first quarter financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker 2: For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded May 3rd, 2023.
Speaker 2: It is now my pleasure to introduce your host, Yafa Cohen-Nifrach, Chief Marketing Officer and Head of Investor Relations. Thank you. Yafa, you may now begin.
Speaker 3: Thank you, operator. I would like to welcome all of you to Sapiens Conference Call to review our first quarter results for 2023. With me on the call today are Mr. Ronny Aldor, President and CEO , Mr. Ronny Gilady, EFO, and Mr. Alex Zuckerman, Chief Strategy Officer.
Speaker 3: Following the summary of the results, we will all be available to answer any questions.
Speaker 3: Before we start, I would like to remind everyone that this conference call may contain projections or other forward-looking statements.
Speaker 3: The safe harbor provision in the press release issue today also apply to the content of the call.
Speaker 3: SAPINs express in this claim any obligation to update or revise any of the forward-looking statements, whether because of future events, new information, a change in its viewer expectations, or otherwise.
Speaker 3: On today's call, we will refer to the non-GAAP financial measure. A reconciliation of GAAP to non-GAAP results has been provided in our press release issue before the market opened this morning. A replay of this call will be available after the call on our investor relations section of the company website.
Speaker 3: or via the website link which is available in the earnings release we published today.
Speaker 3: I will turn the call over to Roniel Guo, President and CEO of Sapient.
Speaker 3: I will turn the call over to Roni Arguo, President and CEO of Sapient. Good morning.
Speaker 2: Thank you Yafra and thank you to everyone who has joined us today. I want to welcome you to our Army call.
Speaker 2: Siepen says the solid first quarter with a 6% Euro-ver-year increase in revenue to $124.8M.
Speaker 2: Our hard work and dedication have paid off as we also deliver a high operating profit of $22.5 million.
Speaker 4: resulting in an operating margin of 18%. We are excited to continue this positive momentum throughout the year and achieve continued success.
Speaker 4: Our customer-centric model implemented globally has consistently driven growth and profitability while generating cash flow.
Speaker 4: Second says an established track record of growth, profitability and high cash generation.
Speaker 4: North America is returning to growth. I'm happy to share that our hard work and extensive groundwork in North America are paying off, thanks to the dedication of our team and my oversight. We are excited 2022 with improvement.
Speaker 4: And the good news is that the momentum is continuing into 2023. We are excited to see what we can achieve this year with this positive energy and drive.
Speaker 4: In North America, safety and serving the light and annuities market and the PNC market, which include workers compensation and reinsurance solutions.
Speaker 4: Since the beginning of 2023, we have signed new P&C deals across all of our P&C products. All P&C, workers' compensation and reinsurance markets.
Speaker 4: Our specialization in offering differentiated P&C products that target niche markets with high growth potential, safe savings, and part of the North America market.
Speaker 4: As a result, we are making excellent progress in building our pipeline and developing new opportunities of all of our PNC products.
Speaker 4: Our success in workers' compensation is driven by a leading core suite for workers' compensation solutions, which 8 Navaric are recently recognized as an established player for poverty and casualty policy administration systems in North America.
Speaker 4: Our product is designed exclusively for our workers' compensation line of business. This gives us domain expertise and an excellent, preferable client base.
Speaker 4: Since the beginning of the year, we have signed new workers' compensation deals.
Speaker 4: and are a project thing with additional deal. After two years of slowdown in the space, many viewed COVID, the workers' competition market represents a significant opportunity for sapiens in North America and Canada, this year and in the coming years.
Speaker 4: Our core suite for PMC products has been a bright spot for us in North America.
Speaker 4: thanks to our significant investments over the past two years.
Speaker 4: During this time, we strengthen our foundation, enhance our cloud offering, and provide stability for our existing customers. After a brief pause, we resume our outreach and pipeline building efforts, which have led to new success.
Speaker 4: and widespread product selection. In fact, we signed a new course for PNC deal in the first quarter and are progressing with our additional deal, underscoring the strength and appeal of our product.
Speaker 4: Our North America, life and annuity business continue building momentum in cost-width and business application offering for life. We secure another cost-width deal in the first quarter demonstrating the continued demand for our product.
Speaker 4: While we are not disclosing specific details about this particular win, we are excited to have re-established our position in this life market.
Speaker 4: Additionally, we are seeing strong traction in our business application for life with new build sign and existing customers upgrading to the latest version of our software.
Speaker 4: Following our recent re-architecture effort, this is a proof to the quality and the value of our product and we are committed to continue to innovate and improve our offering to meet the market evolving need. We have achieved a high win rate in life reflecting the quality and the value of our product and services.
Speaker 4: Since the beginning of the year, we have grown our North America sales and marketing and customer success team to support our future goals.
Speaker 4: As we continue to refine our certain marketing plans and leverage our industry expertise,
Speaker 4: We are confident that we will further improve our closure rate in this market.
Speaker 4: We said dedicated team and the customer centric approach we are committed to delivering exceptional solution and exceeding our client expectations. Switching to Europe .
Speaker 4: This market remains our highest growth region. Several positive dynamics contribute to the first quarter high single digit growth with experience in the region.
Speaker 4: First, we see increased demand for system replacement in life and pension. Organizations are coming back to the market looking for core system replacement and as a result, we have a lot of activity in the life and pensions.
Speaker 4: Second, we also see increasing demand for PMC and digital solutions in the market. And the third element, contribute to growing Europe , is the increasing acceptance of the cloud. European insurers are embracing cloud solutions and we have more customers open to the cloud solutions.
Speaker 4: strategic focusing Germany.
Speaker 4: The German insurance industry is one of the largest in the world. It's a total premium exceeding 220 billion euro annually. This represents a significant growth opportunity for sapiens, and we are well positioned to capitalize on it by offering our core.
Speaker 4: digital and reinsurance solutions. Since acquiring Suncoomoo in 2020, we have invested significantly in establishing a strong local presence in the German market. Our efforts have focused on expanding our painting digital products and providing support to the world.
Speaker 4: and increasing ourselves and support team in the region. This investment are paying off and we are seeing positive momentum in the market. We see opportunity for we did sweet and skip solutions. It's a top tier German insurance player.
Speaker 4: In addition, the opportunity to develop this market for additional savings products like the insurance and digital and in the future with the Latin and UT solutions.
Speaker 4: The EMEA region continues growing across property and casualty and life and pension, and our results reflect our consistent progress in these regions.
Speaker 4: Recognition from the leading industry analysts support our sales team effort and provide excellent reference.
Speaker 4: In early March, we announced the second e-tweet for PNC won CELEN's 2023 Excellence Award for the breath of functionality category in the E-MEA region. The product was named as a Luminary Solution, the top tier in CELEN's technical capability matrix.
Speaker 4: If this tweet is clearly positioned a leading platform in EMEA.
Speaker 4: The luminary classification was also given to Sepulaean C.D. suite in the APAC region.
Speaker 4: The land also highlighted two other second solution. Second tier policy solution was named a functionality and stand out both in MIA and Latam region, and second was named as a notable solution.
Speaker 4: Switching now to SAPNs Cloud and Digital Progress. Digital is a dynamic domain and we are building our first digital proposition tightly connected, yet loosely coupled. We have a second solution that enabling our clients to benefit.
Speaker 4: from the complete sentence proposition while maintaining their freedom of choice. In order to achieve success in this segment of our business, we have established several key priorities for 2023.
Speaker 4: Our top priority is to provide a persona-based package for agents and for customers on top of each one of our core products.
Speaker 4: Life in PNC.
Speaker 4: The Persona package has high focus on usability, UX and also smart features and ends by artificial intelligence and machine learning to enable easier work and easier decision making. We plan to support more out of the box machine learning modules in our portals, offer a dynamic section.
Speaker 4: questionnaire, solution recipient decision, and integrate with Data Hub as a real-time data consolidation layer.
Speaker 4: We also plan to offer pre-integration with data enrichment providers, which will help us deliver even more value to our customers.
Speaker 4: Another key element in our approach is enabling a swift time to market with local tools and the concept of smart components.
Speaker 4: The smart components introduce out-of-the-box features and components integrated with the core and data platform enable changes and ability to add capabilities to each persona for a free time to market. It enables groups to create their own repository.
Speaker 4: to share between the implementation across the organization. Self-management is another critical area of focus for us.
Speaker 4: And we plan to introduce the first phase of our no-code management system.
Speaker 4: We will also introduce company level settings in the journey for composer and offering multiple workspace and easy mapping in an API composition engine.
Speaker 4: Making it easier for our personnel to manage their operation and improve efficiency.
Speaker 4: Finally, we are committed to extending our touch points with end user to improve our connection and provide greater value. This includes integration with leading platforms such as MSNANIC, MSOFIS, GLIAR, STLYTH and MOLE, which will help us provide a more seamless experience for our customers.
Speaker 4: This was a busy quarter on the marketing and brand awareness front.
Speaker 4: Saetens team exhibited in the industry's trade show worldwide in Spain, Germany, and the UK and US. They are increasing our investment in Saetens brand and our solution with digital activities and campaigns.
Speaker 4: In addition, we are preparing to host our annual International Client Conference in Barcelona later in May and our North America Customer Summit in Arizona in October . Looking ahead to the remainder of 2023, our key objectives are first...
Speaker 4: and foremost, growing our presence in North America market. This will involve investing in our certain marketing efforts, building relationships with key partners, and maintaining investment in our innovating solutions that meet the evolving needs of our customers.
Speaker 4: In addition to expanding our presence in North America, we are also focused on dipping our relationship with our existing customer and growing in every territory we operate.
Speaker 4: We will also look for opportunities to upsell and cross-sell, an essential advantage of our long-term sticky customer relationship.
Speaker 4: In parallel, we have the solution to address the digitalization and cloud needs.
Speaker 4: Another key objective is expanding beyond of our core offering into digital data and analytics.
Speaker 4: as we recognize the tremendous growth potential in these areas.
Speaker 4: Finally, continuing our transition to the cloud will enable us to deliver our solutions more quickly and efficiently, provide greater scalability and flexibility for our clients, and enhance our overall competitiveness in the market.
Speaker 4: By focusing on these key goals, we are confident that we will continue to drive success and growth of our company and deliver exceptional value to our clients.
Speaker 4: Our continuous investment in product and solution has earned industry recognition, enhancing our spending in the global insurance market.
Speaker 4: As the CEO of Seppens, I am proud to lead teams deeply committed to executing our strategic plan and delivering sustainable growth and value for our shareholders. Now I would like to turn the call to Ronec Giladi, our CEO .
Speaker 4: As CEO of Saipan, I am proud to lead teams deeply committed to executing our strategic plan and delivering sustainable goals and value for our shareholders. Now I would like to turn the call to Ronec Giladi, our CFO . Thank you, Oli.
Speaker 4: I will begin my commentary with a review of the first quarter 2023 non-GAAP results, followed by comments on the balance sheet and cash flow. I will wrap up with our update guidance for 2023.
Speaker 4: Revenue in the first quarter of 2023 was $124.8 million, an increase of 6% compared to $117.7 million in the first quarter of 2022.
Speaker 4: Revenue in North America was $50.4 million compared to $49 million in the year-ago quarter, an increase of 2.8% or $1.4 million.
Speaker 4: We feel confident that the revenue in North America will continue to grow in the coming quarters.
Speaker 4: Revenue in Europe was $64.6 million, a year-over-year increase of 9% from $59.3 million.
Speaker 4: And revenue in rest of the world, which includes South Africa and APAC, increased 4.1% compared to prior year quarter, reaching $9.8 million.
Speaker 4: Gross profit increased in Q1 2023 by $3.4 million totaling $66.4 million while gross margin increased by 20 basis points to 45.2%.
Speaker 4: Operating expenses increased $1.7 million a year over year to $33.8 million. R&D spending increased by $1.4 million representing 13.8% of total revenue.
Speaker 5: compared to 13.5% last year.
Speaker 5: The increase in R&D reflects our continued investment in cloud solutions.
Speaker 5: SG&A expenses remained at the same dollar level and were reduced to 13.3% of total revenue.
Speaker 5: Operating margin increased by 40 basis points to 18%.
Speaker 5: growing from 47.2% in the first quarter of last year.
Speaker 5: which support our activities and profitability.
Speaker 5: Financial expenses this quarter total $1.2 million compared to financial income of $348,000 in Q1 of 2022.
Speaker 5: reflecting the impact of currency hedging on the British pound, euro and Israeli shekels.
Speaker 5: EPS was 31 cents per diluted share for the first quarter of 2023, similar to Q1 of 2022, reflecting the improvement in operating profit, which offset by the negative impact of increased financial expenses due to KMC hedging.
Speaker 5: EBITDA increased by 7.6% to $23.6 million in 2023. EBITDA margin in Q1 2023 was 18.9% compared to 18.6% of last year.
Speaker 5: Turning to our balance sheet.
Speaker 5: As of March 31, 2023, we had cash-in-cash equivalents and short-term deposits totaling 182 million dollars.
Speaker 5: and the venture of $60 million.
Speaker 5: The cash position at the end of Q1 reflects a 20 million debenture principle we paid at the beginning of 2023.
Speaker 5: The remaining $60 million will be paid in three equal installments over three years.
Speaker 5: Turning to our adjusted free cash flow. During Q1 2023 we generated adjusted free cash flow of $19.9 million.
Speaker 5: The improvement in adjusted free cash flow resulting from collection of delayed payment from 2022 and progress in ongoing collection processes.
Speaker 5: During the quarter, we declared a cash dividend of $13.8 million, or 25 cents per share for the second half of 2022. The dividend was paid to our shareholder on April 24.
Speaker 5: Our cash position, positive cash flow and dividend distribution reflect our solid financial performance and position in our ability to execute our strategy, even during a challenging macroeconomic situation.
Speaker 5: This quarter, we provided additional review of our revenue growth margin to help our investor better understand the revenue build-up, predictability and profitability.
Speaker 5: We split our revenue into two groups and provide period-over-period comparison as such new period is reported.
Speaker 5: We split our revenue into two groups and provide period-over-period comparison as such new period is reported. The two groups are
Speaker 5: and provide period-over-period comparison as such new period is reported. The two groups are 1.
Speaker 5: So, for the product and real care in post production services and...
Speaker 5: 2. Pre-production implementation services Software product and real-care and post-production services include mainly term license, maintenance, cloud solution, subscription and post-production services.
Speaker 5: The revenue stream is a mix of recurring and reoccurring in nature.
Speaker 5: Pre-production implementation services include mainly implementation services before go live, which are one time in nature.
Speaker 5: In Q1 2020, revenue from the care and software product and real care and post-production services totaled $81.8 million in representing 66% of total revenues.
Speaker 5: compared to $75.6 million and 64% of total revenue in Q1 of 2022.
Speaker 5: an increase of 8.2%. The gross margin for Q1 2023 was 54.8%.
Speaker 5: compared to 53.5% of last year.
Speaker 5: Revenue from pre-production implementation services totaled $42.9 million representing
Speaker 5: 34% of total revenue compared to $42.1 million and 36% of total revenue fluxed in.
Speaker 5: The gross margin for this group this quarter total 26.8% compared to 29.7% of last year.
Speaker 5: The worst margin for this group this quarter total 26.8% compared to 29.7% of last year.IBLE
Speaker 5: Our software, product and real car and post-production services are significant and growing, representing two-thirds of sapient revenue, with a gross margin of 55%, significantly higher than our pre-production implementation services margin.
Speaker 5: In higher, they now blended, reported growth model.
Speaker 5: I want to turn now to our guidance for 2023. We are increasing our full-year 2023 non-GAAP revenue to a range of $507 million to $512 million.
Speaker 5: compared to previous guidance of $502 to $507 million.
Speaker 5: reflecting an organic growth rate of 7.3%.
Speaker 5: We expect our North America region to continue to build momentum that will translate to revenue growth in the coming quarters.
We are also increasing the guidance for the full year 2023 non-GAP operating margin, to a range of 17.8 to 18.2%.
Compared to the previous guidance,
of a range 17.6% to 18%.
We continue to improve our offshore ratio while implementing efficiency steps in our vision and cooperate while continue our investment in our products.
To summarize, Q1 2023 was a strong quarter for sapiens. Revenue, gross profit and operating profit improved compared to last year.
Our balance sheet and car generation are solid.
We remain committed to our focus on driving growth and profitability.
I will now turn the call back to O'Neill. O'Neill. Thank you, Rony. As we move forward, we remain committed to executing our strategy, leveraging our strength, and delivering sustainable goals and value for our shareholders.
I would like to thank our clients and shareholders for their continued support and trust and we look forward to delivering even greater success in the years to come.
Operator, we are ready to open the call for Q&A. Thank you. Ladies and gentlemen, at this time we will begin the question and answer session.
If you have a question, please press star 1. If you wish to cancel your request, please press star 2. If you are using speaker equipment, come with the handset before pressing the numbers. Please ask your question in a loud and clear voice. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions.
The first question is from Kevin Kumar of Goldman Sachs. Please go ahead.
Thanks for taking my question. I wanted to ask about Europe and the strength in the region this quarter. Ronnie, you called out strength in life and tension. The theory is how did PNC perform in Europe relative to your expectations? And then, you know, in any regions in Europe that you would call out that had really strong performance in the quarter.
Thanks. Ronny Gee? Yes, I would like to start, Kevin, and then Ronny can follow with the product. This quarter we grew about 9% year-over-year on the European market.
We see the growth coming from the German market, the UK and Nordic. This is across Europe . We also see in the quarter that we have some catch-up revenue from previous year, so the 9% is in the high, but we expect to grow in this region at the level of...
high single digits during 2023. Overall it looks promising and good and we'll continue that.
That's helpful. And then, you know, I had a question on the new gross margin disclosure. I believe the software and post-production services gross margin improved year over year by over 100 basis points. So just curious the moving pieces there, you know, that's driving the increase in the gross margins. Thank you.
Yes, on the gross margin, on the blended rate, we see a slight increase from 45 to 45.2%.
The improvement is coming from several factors, obviously increasing highly quality revenue which includes revenue from subscription, term license, and many services like short term cloud solution. This is number one. The second thing, we increase the offshore ratio in the company.
If we look quarter over quarter, we went from 47% in Q1 of 2022 to 51% in Q1 of 2023. So this is another factor in some upside coming from the currency. So overall, we have a good one on that. If we look at the breakdown that we provided this quarter,
breaking these two groups, which is the recurrent and reoccurring versus the one time, we see also improvement on the gross margin coming from the group A, which is the high quality revenue.
That's helpful. Thank you very much. The next question is from Mayank Tandon of Needham & Company. Please go ahead.
Hey, good morning. This is actually Kyle Peterson. I'm from my own. Thanks for taking the question. I wanted to touch on the quarter, particularly revenue in Europe . Sounds like there might've been some one-time kind of revenue that you guys kind of talked about, but I guess could you quantify whether there was any kind of one-time.
a signature of contracts and some of a milestone percentage of completion. This is the catch-up. This is not a one-time. This is recurring. By nature, the overall growth in this region by end of year should be at the high single digits.
Okay, that's helpful. And maybe just a follow-up, particularly on the quarterly cadence of the year in terms of the growth rate, should we be thinking of something reasonably linear or should growth rate be a little more back-end weighted given in the macro? Or just how should we...
of the quarter until then we'll be here.
Okay, sounds good. Good quarter. Thanks, guys.
The next question is from Dylan Becker of William Blair. Please go ahead. Maybe starting on the North America side, I know there's been a lot of restructuring over the past several quarters, but it seems like you're really going to start.
Yes, yes.
So about the investment that we are doing, I would like to start with the business development, sales, marketing, partnering, ecosystem, all of this. As we join us again, so she's building together with the team all the marketing activity, the industry all the businesses all the businesses, all the businesses that are trending Trinity we are trying to make sure that our stock market is fundamentally owner noted was Bellelega as we you're talking about rapid.
put more effort on the SDR. Right now over COVID, we are going to many, many events. We are continued to build the relationship with analysts together with Alex. So this is in the marketing on sales. Gary join us, rejoin us and he's now building the team for the...
What we call CEC is the account management. As all of you know, we have many, many accounts in North America that we believe that we can add more and more solutions for them, like the cloud services, like digital data, in any kind of a coastal opportunity.
And then we also invest, we increase the sales organization. So overall, we are filling this process, by the way, next week, week after next, we have a big sales kick off. Many new people join us from a different area. So that's the investment. We believe that we can really see the fruit till the end of the year.
our reinsurance, the component decision management, and the unique solution that we have for the workers' comp that we have a really good pipeline. We also mentioned that we closed deals. We are selected in another one, so it's a lot of activities in this area as well. Got it. That's super. I'm glad we're there.
Maybe in kind of trending it to Ronnie G on a margin front, seeing some nice progression as well. Appreciate the color and breakdown. How should we think about kind of the mixed benefits, right? Software contributing to gross margin. We've got the offshoring piece, but you've also got probably future productivity coming from those sales reps that want to use.
as well.
Yes, we need to see progression on the gross margin, especially in the group pay which include the product revenue and the post-production services. But I would like to emphasize that this impact will be moderate and over several years. It's not a one-time bank.
We are investing and we are making sure that our customers are satisfied. So we see progression but moderate quarter over quarter.
Okay, got it. And maybe one last one if I could too, going back to Roni, you mentioned the data and digital piece too. Understand kind of maybe a complex macro sales environment as well for heavier kind of core systems in nature maybe, but how do you think about like those digital and data capabilities serving as a wedge, helping kind of accelerate maybe some initial modernization efforts and maybe leading to this future? In the US, what data and technology sale isquin with Web
cross-cell of more core components going forward as well. Thanks guys. Hey, this is Alex here.
So we definitely spot on, we see it as a strong potential to contribute in a couple of areas. First, we see that the wallet share of our deals is increasing because of the fact that we are providing in many deals today not only our well-known core solutions but also
the digital platform on top or the data or both of them with cloud services. So a typical deal today for us includes more than one component. And this is one aspect to referring to what you asked. The second one is
We definitely see customers that are tending to start their digitalization journey, which can be a major journey, through first of all dealing with their customer engagement problem, which means a digital component, a portal, web journeys, etc., to unlock their capabilities of working with their end consumers or agents.
and then go to core replacement. So also there, this allows us to insert ourselves into the customer environment to put a fit in the door, to start, and then based on good performance, we can continue to do larger projects on the core.
and vice versa. We can start a project on the core, but when the customer sees our data capabilities, for example, then through the sales process, we suddenly see an increase and more interest in those components as well. So it acts both as an increase to the value of the deal and as a...
stopping points that can lead for additional deals. Got it. Super helpful. Thanks again guys and then congrats. The next question is from Chris Reimer of Barclays. Please go ahead. Hi guys. Thanks for taking my questions. Most
of what I wanted to ask has been already addressed, but I wanted to touch on the reorganization in the U.S. and the improvement in the execution setup that you mentioned you had there. Do you think that that kind of reorganization is necessary in any of your other geographies? And then just touching on the offshore ratio.
Are you reaching an inflection point? Just how well positioned do you feel with your total head count right now and how your position going forward? Okay, this is Ronnie Aldor. I will take the first call and Ronnie Gilady can take the second one.
So in terms of the investment, as I showed you two things from the US investment. One sales and marketing, we don't need to do any reorganization in Europe because this is we are from the last few years we build it. Last year we put much more effort in Germany.
Over the last 12 months we go from 47% to 51% as we stand for Q1 2023. We in the management think that over a few years we can reach the level of 60%. This is something that we saw in other companies in the market.
We feel it's doable to provide our product and services with high quality. So this is a target for the midterm that we have. We are growing our offshore over quarter. The attrition rate is obviously globally going down, so this is mainly delayed increase in BLF shore.
But obviously, every quarter we'd like to step up on the observation. Got it. I would like to add one point that I just missed. Just to explain for everybody about the main reason that we are doing this investment in sales and marketing at this moment.
because we decided a year ago to bring back our course with life to the US. So as all of you remember, in the last many years we have invested in our product. We are very nice in Europe , but we decided this is a good time to enter back to the US.
and we also show the results. That's one. The second one is the Co-Suite PMC. We have some delivery challenges in R&D, as we mentioned a few times.
In the previous call, right now it's much more stable. I think we have excellent product to offer to the market. So as we are feeling comfortable with our offering and we have much more reference, this is the right time to increase the sales and marketing. So those are the two main areas, the two core solutions in PNC life.
call that right now it's much more stable, I think we have excellent product to offer to the market, so as we are feeling comfortable with our offering and we have much more reference, this is the right time to increase the sales and marketing. So those are the two main areas, the two core solutions in P&C life.
Thank you. That's it for me. If there are any additional questions, please press star 1. If you wish to cancel your request, please press star 2.
Thank you. That's it for me. If there are any additional questions, please press star 1. If you wish to cancel your request, please press star 2. Please stand by while we poll for more questions.
The next question is from Surinder Thind of Jeffries. Please go ahead. Can you hear me?
Thank you. My question pertains to FX. You used to previously provide FX disclosures, but those were removed this quarter. Any color there on that decision?
ISA and this is Ron E. Gee. If we look at this quarter, the effects on the revenue level was headwind for us.
Without this, the company would grow even faster than this, a few points better. On the profitability level, it's the opposite. The currency, especially the Shekel, was tailwind for us and supported our improvement in the operation margin. The currency on the global basis is unknown. There was a lot of fluctuation.
So, we gave the guidance based on last week's currency going forward. So this is for the full year.
Got it. And then if I remember correctly, your guidance assumed a minus 0.5% FX time limit. Is that still true at this point with the updated guide? No, no, no. No, no. We are providing guidance based on the last week and based on the result of the business result.
So for your revenue guidance.
What is the assumed FX impact at this point? When you do guidance last quarter, the assumption was that FX would be minus 0.5% headwind. Is that still true? No, no, no.
Currently the KMC tailwind is continuing going forward if I'm looking at the remainder of the year. So we have upside of tailwinds from KMC going forward. It can change but KMC is creating tailwinds.
Got it, thank you. I think that's it for me. Thank you. There are no further questions at this time. Before I ask Ms. Yapakoenifra to go ahead with her closing statement, I would like to remind participants that a replay of this call is scheduled to begin in two hours.
In the US, please call 1-888-269-0005. In Israel, please call 03-925-938. And internationally, please call 972-3-925-938. Yaffa, would you like to make your concluding statement?
Yes, thank you, Yoni. Thank you for joining the call today. We look forward to speaking with you again on our next call. Please note that we are hosting a virtual one-on-one meeting with the New Dam Technology and Media Conference on Thursday, May 18. We are also attending the Jeffrey Foster Conference in California on May 31 and June 1.
first quarter 2023 results conference call. Thank you for your participation. You may go ahead and disconnect.