Q1 2024 Sapiens International Corporation NV Earnings Call

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Operator: Sure.

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Operator:

Yaffa Cohen: Hi May I have your full name please.

Operator: Yeah.

Yaffa Cohen: David Brown from Hey, I E.

This will be BBB and BB BBB to BBB.

Yaffa Cohen: I can't hear you very well could you repeat that.

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Yaffa Cohen: David Brown from <unk> a M E R. A.

Yaffa Cohen: I still can't hear you very well can you say your full name again please.

Yaffa Cohen: Yeah.

Yaffa Cohen: David D. A V I D and Brown B R O W N.

Yaffa Cohen: David Brown.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation's first quarter 2024 financial results conference call. Sapiens issued a press release before the market opened this morning, and it has been posted on the company's website at www.sapiens.com. All participants are presently in listen-only mode.

Ladies and gentlemen, thank you for standing by and welcome to the Sapiens International Corporation's first quarter 2024 financial results Conference call sapiens issue.

Yaffa Cohen: Yeah correct.

Yaffa Cohen: Okay, and what is your phone number.

Yaffa Cohen: Yeah.

Yaffa Cohen: 129603697.

Speaker Change: Okay, and what is the name of your company.

Operator: The press release before the market opened this morning, and it has been posted on the company's website at Www Dot sapiens Dot com.

Yaffa Cohen: Yeah, Hey, I E.

Speaker Change: Okay. Thank you, David and which call are you calling into.

Operator: All participants are presently in listen only mode.

Operator: Following management's formal presentations, instructions will be given for the question and answer session. I would now like to hand the call to Ms. Yaffa Cohen, Sapiens' Chief Marketing Officer and Head of Investor Relations. Yaffa, would you like to begin?

Operator: Following management's formal presentation instructions will be given for the question and answer session I would now like to hand, the call to Miss The Africa in sapiens, Chief Marketing Officer, and head of Investor Relations <unk> would you like to begin.

Yaffa Cohen: Sapiens International.

Yaffa Cohen: Oh.

Speaker Change: Okay. Thank you so much.

Yaffa Cohen: Correct.

Yaffa Cohen: But as long as it would be.

Yaffa Cohen: Okay.

Yaffa Cohen: So and Mr. Alex Zuckerman, Chief strategy Officer.

Roni Al: Following the summary of the results we will be available to answer any questions before we start I would like to remind everyone that this conference call may contain projections or other forward looking statements. The safe Harbor provision in the press release issued today also apply to the content of the call.

Yaffa Cohen: Thank you, Operator. I would like to welcome all of you to Sapiens' Conference Call to review our first quarter 2024 results. With me on the call today are Mr. Roni Aldor, President and CEO, Mr. Roni Giladi, CFO, and Mr. Alex Zukerman, Chief Strategy Officer. Following the summary of the results, we will be available to answer any questions.

Yaffa Cohen: Thank you operator, I would like to welcome all of you to sapiens conference call.

Yaffa Cohen: Our first quarter of 2024 Yep.

Speaker Change: With me on the call today are Mr. Roni Al Dor, President and CEO, Mr. Ronnie <unk>.

Yaffa Cohen: CFO and Mr. Alex Zuckerman, Chief strategy Officer.

Roni Al: Sapiens expressly disclaims any obligation to update or revise any of these forward looking statements.

Yaffa Cohen: Following the summary of the results, we will be available to answer any questions before.

Yaffa Cohen: Before we start, I would like to remind everyone that this conference call may contain projections or other forward-looking statements. The safe harbor provision in the press release issued today also applies to the content of the call. Sapiens expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its view or expectations, or otherwise. On today's call, we will refer to non-GAAP financial measures.

Roni Al: Whether because of future events, new information a change in you or expectations or otherwise.

Yaffa Cohen: Before we start I would like to remind everyone that this conference call may contain projections or other forward looking statements. The safe Harbor provision in the press release issued today also apply to the content of the call.

Roni Al: On today's call, we will refer to non-GAAP financial measures.

Roni Al: A reconciliation of GAAP to non-GAAP results has been provided in our press release issued before the market opened this morning.

Yaffa Cohen: Sapiens expressly disclaims any obligation to update or revise any of these forward looking statements.

Roni Al: A replay of this call will be available after the call on the Investor Relations section of the company website or via the website link which is available in the earnings release, we published today I will turn the call over to one year ago, President and CEO of sapiens.

Yaffa Cohen: Whether because of future events.

Yaffa Cohen: Information.

Yaffa Cohen: You are expectations or otherwise.

Yaffa Cohen: On today's call, we will refer to non-GAAP financial measures.

Yaffa Cohen: A reconciliation of GAAP to non-GAAP results has been provided in our press release issued before the market opened this morning. A replay of this call will be available after the call on the Investor Relations section of the company website or via the website link which is available in the earnings release we published today. I will turn the call over to Roni Aldor, President and CEO of Sapiens. Roni? Thank you, Yaffa.

Yaffa Cohen: Consolidation of GAAP to non-GAAP results has been provided in our press release issued before the market open this morning.

Roni Al: <unk>.

Speaker Change: Thank you Rafa thank you for joining us today.

Roni Al: Let's take a high level look at the first quarter results.

Roni Al: Replay of this call will be available after the call on the Investor Relations section of the company website or via the website link which is available in the earnings release, we published today I will turn the call over to <unk>, President and CEO of sapiens.

Roni Al: After I will walk you through the exciting news that we are taking to lunch or future proof.

Roni Al: This open and integrated sapiens insurance platform.

Roni Al: Then I will touch on the progress related to our 2024 objectives.

Roni Al: Thank you, Yaffa. Thank you for joining us today. Let's take a high-level look at the first quarter results. Then, I will walk you through the exciting new step we are taking to launch our future-proof, AI-based, open, and integrated Sapiens insurance platform. Then I will touch on the progress related to our 2024 objective with the highlights of recent success in key regions. Starting with Q1 highlights, our revenue totaled $134 million, an increase of 7.6% compared to last year. And operating profit was $24 million, or 18.1% of total revenue.

Yaffa Cohen: <unk>.

Roni Al: Thank you Lisa Thank you for joining us today.

Roni Al: Highlights of recent success in key regions.

Roni Al: Let's take a high level look at the first quarter results.

Roni Al: Starting with Q1 highlights our revenue totaled $174 million, an increase of seven 6% compared to last year.

Roni Al: After I will walk you through the exciting news that we are taking to launch all future proof AI base open and integrated sapiens insurance platform.

Roni Al: I'll put it in poultry it was $24 million and 18.1% of total revenue.

Roni Al: Then I will touch on the progress related to our 2024 objectives with the highlights of recent success in key regions.

Roni Al: We experienced people that are involved in all of our key regions.

Roni Al: Starting with Q1 highlights our revenue totaled $134 million, an increase of seven 6% compared to last year and operating profit was $24 million.

Roni Al: Call that on our last earning calls I stated that our 2024 priorities are.

Roni Al: Is on transitional solution to SaaS model recipients insurance platform.

Roni Al: Second leverage our investments to drive performance in all of our key regions North America, EMEA and APAC.

Roni Al: And 18.1% of total revenue we.

Roni Al: We experienced year-over-year growth in all of our key regions. Recall that on our last Irving calls, I stated that our 2024 priorities are, First, to transition our solution to the SAS model with Sapiens Insurance Platform. And second, leverage our investment to drive performance in all of our key regions, North America, EMEA, and APAC. Let's start with Sapiens Insurance Platform Update. The Sapiens Insurance Platform is designed and built to accelerate innovation, deliver sustained value, and empower insurers to grow and remain competitive.

Roni Al: We experienced year over year growth in all of our key regions.

Roni Al: Call that on our last earning calls I stated that our 2024 priorities are.

Roni Al: Let's start with sapiens insurance platform update.

Roni Al: The sentence insurance platform is designed and built to accelerate innovation deliver and sustain federal and empower insurer to grow and remain competitive.

Roni Al: On transition our solution to SaaS model recipients insurance platform.

Roni Al: Second leverage our investments to drive performance in all of our key regions North America, EMEA and APAC.

Roni Al: The second such insurance Plateau is the next generation in the evolution of our insurance solutions.

Roni Al: Let's start with sapiens insurance platform update.

Roni Al: The platform how long is the aspect of coal business processing digital engagement data driven decision, making gen AI and machine learning capabilities.

Roni Al: The second insurance platform is designed and built to accelerate innovation deliver sustained value and empower ensure to goal and remain competitive.

Roni Al: A large ecosystem of complementary capabilities into a coherent pre package and pre configured platform.

Roni Al: The Sapiens SaaS Insurance Platform is the next generation in the evolution of our insurance solutions. The platform harmonizes the aspects of core business processing, digital engagement, data-driven decision-making, gen-AI, and machine learning capabilities into a coherent pre-packaged and pre-configured platform. These provide out-of-the-box solutions focusing on the unique requirements of each business vertical or domain.

Roni Al: The second SaaS insurance Plateau is the next generation in the evolution of our insurance solutions.

Roni Al: This provides out of the box solution focusing on the unique requirements of each business royalty Carl domain.

Roni Al: The platform has more lives in the aspect of <unk> business processing digital engagement data driven decision, making gen AI and machine learning capabilities.

Roni Al: From the customer perspective assistance platform accelerates innovation improve time to market using low code and no code approach.

Roni Al: Large ecosystem of complementary capabilities into a coherent pre packaged and pre configured platform.

Roni Al: We provide our customers with consistent user experience, while reducing their total cost of ownership and increase their efficiency.

Roni Al: These provide out of the box solution focusing on the unique requirements of each business royalty Carl domain.

Roni Al: <unk> does each pre package offerings and unified set of operating tours.

Roni Al: From the customer perspective, the Sapiens platform accelerates innovation and improves time to market using a low-code and no-code approach. We provide our customers with consistent user experience while reducing their total cost of ownership and increasing their efficiency. Leveraging the rich prepackaged offerings and unified set of operating tools, the platform is offered in SaaS subscription-based models.

Roni Al: From the customer perspective recipients platform accelerates innovation improved time to market using low code and no code approach.

Roni Al: Platform is offered in such subscription based model.

Roni Al: Symptoms perspective, the platform offering is geared to increase the wallet share of each deal and then the potential of cross sell.

Roni Al: We provide our customers with consistent user experience, while reducing their total cost of ownership and increase their efficiency leveraging the reach pre package offering and unified set of operating tools. The platform is offered in SaaS subscription based model.

Roni Al: The pre integrated architecture, that's create a compelling proposition to new and existing customer and provides our customers with a strong innovation capabilities and future readiness.

Roni Al: From Sapiens' perspective, the platform offering is geared to increase the wallet share of each deal, enhance the potential for cross-sell via the pre-integrated architecture that creates a compelling proposition for new and existing customers, and provide our customers with strong innovation capabilities and future readiness. All new deals are being structured and priced to be delivered as a service, and our goal is to transition over time our existing customers to the SaaS model in a way that manages and minimizes the near-term impact on our revenue. Moving to AI, we view AI, machine learning, and generative AI models like CGBT as an evolution step.

Roni Al: From <unk> perspective, the platform offering is geared to increase the wallet share of each deal and then the potential of cross sell via the pre integrated architecture, that's create a compelling proposition to new and existing customers and provides our customers with strong innovation.

Roni Al: New deals are being structured and priced to be delivered as a service and our goal is to transition over time, our existing customers to the SaaS model in a way to manage and minimize the near term impact on our revenue.

Roni Al: Moving to a R E.

Roni Al: Capabilities and future readiness.

Roni Al: We view AI machine learning and general TV models like GPT is an evolution steps sapiens is leveraging AI to improve both of our solution and our internal process.

Roni Al: All new deals are being structured and priced to be delivered as a service and our goal is to transition over time, our existing customers to the SaaS model in a way to manage and minimize the near term impact on our revenue.

Roni Al: Today sapiens has a library of out of the Bulks machine learning models, including predictive models for productivity improvement like renewal prediction and cross selling and the recent litigation like fall protection and loss reserving to name a few.

Roni Al: Moving to AI, we view AI machine learning and generate TV models like chat GBT is an evolution steps sentence is leveraging AI to improve both of our solution and our internal process today.

Roni Al: Sapiens is leveraging AI to improve both of our solutions and our internal processes. Today, Sapiens has a library of out-of-the-box machine learning models, including predictive models for productivity improvement, like renewal prediction and cross-selling, and risk mitigation, like fraud protection and loss reserving, to name a few. These tools can create significant benefits for our customers in the form of increasing premium revenue, better loss ratios, and improved expenses ratios, thereby further increasing the value that our platform provides.

Roni Al: These tools can create significant benefits for our customers in the form of increasing premium revenue better loss ratio and improve expenses ratios, thereby further increasing the value that our platform provides.

Roni Al: Today sapiens has a library of out of the box machine learning models, including predictive models for productivity improvement like renewal prediction and cross selling and the <unk> litigation like fraud protection and loss reserving to name a few these tools can clear.

Roni Al: In the domain of General T V I and following the release of our decision model AI capabilities last year, we announced in quarter, one 2020 for the launch of integrated AI.

Roni Al: Significant benefits for our customer in the form of increasing premium revenue.

Roni Al: The next in line capabilities from sapiens decision.

Roni Al: The loss ratio and improve expenses ratios, thereby further increasing the value that our platform provides.

Roni Al: Integrating machine learning models into a business friendly decision model wealth bench set.

Roni Al: In the domain of generative AI and following the release of our Decision Model AI capabilities last year, we announced in Q1 2024 the launch of Integrated AI, the next in-line capability from Sapiens Decision. Integrating Machine Learning Models into a Business-Friendly Decision Model Workbench, Sapiens Decision users can integrate machine learning models as another component of their decision model diagram.

Roni Al: In the domain of generative AI and following the release of our decision model AI capabilities last year, we announced in quarter, one 2020 for the launch of integrated AI.

Roni Al: Sapiens decision user can integrated machine learning model is another component of build decision model diagram. In addition, as a part of larger development plan for <unk> platform. We are releasing a new generative AI models in the next coming months supporting various aspects of the <unk>.

Roni Al: The next in line capabilities from sapiens decision.

Roni Al: Integrating machine learning models into a business friendly decision model work bench set.

Roni Al: <unk> value change and providing strong efficiency and support and then spend the whole customer set.

Roni Al: Sapiens decision user can integrated machine learning model is another component of the decision model diagram. In addition, as a part of larger development plan for <unk> platform. We are releasing our new generative AI models in the next coming months supporting various aspects of the <unk>.

Roni Al: <unk> is also beginning to use AI, we see and its own delivery system and processes, improving our performance and streamlined our product developing this enable us to offer cutting edge and customer application differentiation and benefits. Our second priority. This year is to.

Roni Al: In addition, as a part of a larger development plan for Sapiens platform, we are releasing our new generative AI models in the coming months, supporting various aspects of the insurance value change and providing strong efficiency and support end-to-end to our customers. Sapiens is also beginning to use AI within its own delivery system and processes, improving our performance and streamlining our product development. This enables us to offer cutting-edge customer application differentiation and benefits.

Roni Al: <unk> value change and providing strong efficiency and supporting NAND spend to our customer.

Roni Al: Leverage our ongoing investment to drive performance in all of our key regions North America, EMEA and APAC.

Roni Al: Sapiens is also beginning to use AI, we see and its own delivery system and processes, improving our performance and streamline our product development.

Roni Al: We encourage our teams in our top focus regions with additional headcount across sales marketing and product marketing as we look to maximize the momentum we are building in these key regions.

Roni Al: This enabled us to offer cutting edge and customer application differentiation and benefits. Our second priority. This year is to leverage our ongoing investment to drive performance in all of our key regions North America, EMEA and APAC.

Roni Al: Our second priority this year is to leverage our ongoing investment to drive performance in all of our key regions, North America, EMEA, and APAC. We are increasing our teams in our top focus regions with additional headcount across sales, marketing, and product marketing as we look to maximize the momentum we are building in these key regions. In North America, our investment in the life solution is proven, highly successful, and in the first quarter, we had a few go live across our life solution, illustration pro, and underwriting pro.

Roni Al: North America, our investment in the life solution has proven highly successful <unk> ended the first quarter. We had a few go lives across our life solution illustration for an underwriting tool.

Roni Al: We increased our teams in our top focus regions with additional head count across sales marketing and product marketing as we look to maximize the momentum we are building in these key regions.

Roni Al: In the workers' compensation space throughout the first quarter comp.

Roni Al: Compensation team has demonstrated progress in the implementation of the three key projects that were signed in 2023.

Roni Al: North America, our investment in the life solution has proven highly successful <unk> ended the first quarter. We had a few go lives across our life solution illustration for an underwriting pool.

Roni Al: As I said in our previous call. This market represents a significant opportunity for sapiens in U S and Canada in the coming years.

Roni Al: In the workers' compensation space, throughout the first quarter, our workers' compensation team demonstrated progress in the implementation of the three key projects that were signed in 2023. As I said in our previous call, this market represents a significant opportunity for Sapiens in the U.S. and Canada in the coming years. This quarter, we made additional investments in our Canadian operation.

Roni Al: In the walk as compensation space throughout the first quarter, our World Cup competition team has demonstrated progress in the implementation of the three key projects that were signed in 2023.

Roni Al: This quarter, we made additional investments in our Canadian operation Champions has been successful serving leading insurance in Canada for more than 15 years with this additional resource we will be able to elevate the level of services, we provide to our customers in Canada.

Roni Al: As I said in our previous call. This market represents a significant opportunity for settles in U S and Canada in the coming years.

Roni Al: Uh huh.

Roni Al: Over the past few months, we strategically prioritize our presence at key trade shows across North America, including Libra.

Roni Al: This quarter, we made additional investment in our Canadian operation <unk> has been successful serving leading insurance in Canada for more than 15 years with these additional <unk>, we will be able to elevate the level of services, we provide to our customers in Canada.

Roni Al: Sapiens has been successfully serving leading insurance companies in Canada for more than 15 years. With this additional resource, we will be able to elevate the level of services we provide to our customers in Canada. Over the past few months, we strategically prioritized our presence at key trade shows across North America, including LIMRA.

Roni Al: H Oyu BBC and insurance innovators.

Roni Al: This aligns with our commitment to expanding market reach and cultivating value.

Roni Al: <unk> connection we've seen the insurance industry.

Roni Al: Over the past few months, we strategically prioritize our presence at the key trade shows across North America, including the Libra.

Roni Al: Participation in this event.

Roni Al: Provide invaluable opportunity to showcase our.

Roni Al: AHOU, the BBC, and Insurance Innovators. This aligns with our commitment to expanding market reach and cultivating valuable connections within the insurance industry. Our participation in these events has provided invaluable opportunities to showcase our innovation solution to a diverse audience of prospects, generating significant interest and potential leads. As we continue to invest in this engagement, we anticipate further strengthening our position in the North America market, driving growth and delivering value to our investors. Moving to Romania and the rest of the world, we had a few successful go-lives with our Edit Suite, TIA Suite, Skip Suite, and Rensurance Master this quarter. I would like to highlight two of our go-lives.

Roni Al: Innovation solution to diverse audience of prospect generating significant interest and potentially.

Roni Al: H Oyu BBC and insurance innovators.

Roni Al: This aligns with our commitment to expanding market reach and cultivating valuable connection we see in the insurance industry. Our participation. In this event has provided invaluable opportunity to showcase.

Roni Al: We continue to invest in this engagement, we anticipate further strengthening our position in North America market driving growth and delivering value to our own vessels.

Roni Al: Moving to EMEA and rest of the World where the few successful go lives. We saw when we did sweets Tia suite skip suite and reinsurance milestone this quarter.

Roni Al: Our innovation solution to diverse audience of prospect generating significant interest and potentially.

Roni Al: As we continue to invest in this engagement, we anticipate further strengthening our position in North America market driving growth and delivering value to our vessels.

Roni Al: I would like to highlight two four go lives.

Roni Al: In the dark region, a priority digital persistence in Europe with successful go live with a German pet insurance brand.

Roni Al: Moving to a NAND because of the world where the few successful go live with our rebid sweets Tia suite Skip suite and reinsurance milestone this quarter.

Roni Al: Those with the SAPIEN Skip suite, so accelerated underwriting digital sales and go to market forces.

Roni Al: We provide close with a competitive edge in a niche market with our low code insurance platform, enabling them to develop and sell new products quickly.

Roni Al: I'd like to highlight two four go lives.

Roni Al: In the Dach region, a priority territory for Sapiens in Europe, they had a successful gold life insurance partnership with a German pet insurance brand, Claios, with the Sapiens Skip Suite to accelerate their underwriting digital sales and go-to-market process. We provide Claios with a competitive edge in a niche market with our low-code insurance platform, enabling them to develop and sell new products quickly on our digital channels. APAC is another region where we had to focus on accelerate our growth.

Roni Al: In the dark region at priority territory for sapiens <unk> with successful go live we said German pet insurance brand.

Roni Al: Our digital channel.

Roni Al: With the SAPIEN skip suite to accelerate their underwriting digital sales and go to market process with.

Roni Al: APAC is another region, where we are focused on accelerating our growth. The go lives in Q1 was office digital insurance, the leading digital insurance in Vietnam was watched closely by our prospects.

Roni Al: We provide close with a competitive edge in the niche market with our low cost insurance platform, enabling them to develop and sell new products quickly.

Roni Al: In the region.

Roni Al: The successful go live help us build customer referrals in apex Apis a death sentence, you did suite for property and casualty.

Roni Al: Our digital channel.

Roni Al: APAC is another region, where we had focused on accelerating our growth.

Roni Al: The goal live in Q1 was Opus, the digital insurance platform, the leading digital insurance platform in Vietnam, was watched closely by our prospects in the region. The successful goal live helped us build customer referrals in APAC. Opus adopts Sapiens EDIT suite for property and casualty, coupled with Sapiens Intelligence, to modernize its core PNC insurance process.

Roni Al: Coupled with sapiens intelligence to modernize its scope P&C insurance forces.

Roni Al: Go lives in Q1 was office digital insurance, the leading digital insurance in Vietnam was watched closely by our prospect individually.

Roni Al: Overall, the demand continued to be strong for P&C platform solution in the manner that's over the world.

Roni Al: The successful go live help us build customer referrals in apex Apis adapt <unk> suite for property and casualty.

Roni Al: There is an increased trend in the P&C claims platform solution.

Roni Al: And the appetite for platform in SaaS model continued to be very strong across all solution lines. The demands for the life and pension platform is also steady across EMEA and APAC.

Roni Al: Coupled with sapiens intelligence to modernize its co P&C insurance policies.

Roni Al: Overall, the demand continues to be strong for PNC platform solutions in India and the rest of the world. There is an increased trend for the PNC claims platform solution, and the appetite for a platform in the SAS model continues to be very strong across all solution lines. The demand for the life and pension platform is also steady across EMEA and APAC.

Roni Al: Overall, the demand continued to be strong for P&C platform solution in EMEA and rest of the world.

Roni Al: In addition, digital over the legacy is a strong theme for sapiens <unk>.

Roni Al: There is an increased trend in the P&C claims platform solution.

Roni Al: Enable us to offer insurance carrier digital over existing legacy as a phase one and then phase two to effectively replace the underlying legacy system.

Roni Al: And the appetite for our platform in SaaS model continued to be very strong across all solution lines.

Roni Al: The demand for the life and pension platform is also steady across EMEA and APAC.

Roni Al: Rising the already established digital form 10.

Roni Al: In addition, digital over legacy is a strong theme for Sapiens. It enables us to offer insurance carrier digital over existing legacy as a phase one, and then phase two to effectively replace the underlying legacy system utilizing the already established digital front end. Moving to product recognition, in the first quarter, we received two salient luminary works.

Roni Al: Moving to towards the types of ammunition in the first quarter. We received two select luminary were.

Roni Al: In addition, digital over legacy is a strong theme for sapiens. This enable us to offer insurance carrier digital over existing legacy as a phase one and then phase III to effectively replace the underlying legacy system utilizing the OLED establish.

Roni Al: Segments was named as the 2020 full luminary in EMEA and APAC for our P&C claims solution.

Roni Al: We also received a <unk> luminary rewards for our claim pool in North America.

Roni Al: Digital form 10.

Roni Al: And cloud recipients has maintained its leading position in 10 Conservative select report.

Roni Al: Moving to product recognition in the first quarter, we received two cylinder luminary were.

Roni Al: Segments was named a 2024 luminary in EMEA and APAC for our PNC claim solution. We also received the Salent Luminary Award for our Claim Pro in North America. I'm proud that Sapiens has maintained its leading position in ten consecutive CELENT reports.

Roni Al: So length recognition reinforce our position as a leading <unk> solution in other calls.

Roni Al: Segments was named as a 2020 full luminary in EMEA and APAC for our P&C claims solution.

Roni Al: Our strong regional presence across multiple lines of business for local and multinational carriers.

Roni Al: We also received a salon luminary rewards for our claim Paul in North America.

Roni Al: Our ecosystem of partners continue to evolve further supporting our customer solution.

Roni Al: Im proud the sapiens <unk> maintain its leading position in 10 Consultative Selim report.

Roni Al: Silent Recognition reinforces our position as a leading claim solution and underscores our strong regional presence across multiple lines of business for local and multinational carriers. Our ecosystem of partners continues to evolve, further supporting our customer solution. In Q1, we announced a strategic partnership with Datacrest, a pioneer in innovative insurance solutions to transform the application process and drive premium growth for P&G insurers. We also announced a partnership with Bina AI, the number one health and wellness check software provider that aims to empower more insurance companies worldwide to use Clients provided health data for improved risk management and value-added services and reduced costs.

Roni Al: In Q1, we announced a strategic partnership with <unk>, a pioneer and innovative insurance solutions.

Roni Al: Select recognition reinforce our position as a leading claims solution in other calls.

Roni Al: So on the application process and drive premium growth for P&C insurers.

Roni Al: Our strong regional presence across multiple lines of business for local and multinational carriers.

Roni Al: Also announced a partnership with <unk>, the number one health and wellness check software provider <unk>.

Roni Al: Our ecosystem of partners continue to evolve further supporting our customer solution.

Roni Al: To empower.

Roni Al: In Q1, we announced a strategic partnership with that occurs at pioneer and innovative insurance solutions to transform the application process and drive premium growth for P&C insurers.

Roni Al: More insurance companies worldwide to use.

Roni Al: Client provided health data for improved risk management and value add services and reduce costs.

Roni Al: Strategic partnership between sapiens and leading in shortage play an important role in future achievement of insurance curves and provide effective way for us for leveraging their cutting edge solutions.

Roni Al: Also announced a partnership with Bina AI, the number one health and wellness checks software provider.

Roni Al: And to empower.

Roni Al: <unk> insurance companies worldwide to use.

Roni Al: Client provided health data for improved risk management and value add services and reduce costs.

Roni Al: Coming to our 2023 will discuss collaborating with system integrators to extend our reach and accelerated growth.

Roni Al: Strategic partnership between Sapiens and leading insurtech companies play an important role in the future achievement of insurance careers and provide an effective way for us to leverage their cutting-edge solutions. Coming out in 2023, we discussed collaborating with System Integrator to expand our reach and accelerate growth. I would like to update you regarding the progress we have made thanks to the work of the new team we built to support this initiative. In North America, Sapiens continues to strengthen its Deloitte-America relationship with a recent expansion into Canada and the Caribbean.

Roni Al: Strategic partnership between sapiens and leading in shortage play an important role in future achievement of insurance carriers and provide effective way for us for leveraging their cutting edge solutions.

Roni Al: I'd like to update you regarding the progress we have made it thanks to the world of the new team will build support this initiative in North America sapiens continued to strengthen its.

Roni Al: Deloitte America relationship with our recent expansion into Canada and the Caribbean.

Roni Al: Coming to our 2023, we discuss collaborating with system integrators to extend our reach and accelerate growth.

Roni Al: Sapiens has recently entered into a joint business relationship with Pwc in the U S, which will <unk>.

Roni Al: I'd like to update you regarding the progress we have made thanks to the world of the new team rebuild support this initiative in North America Sapiens continued to strengthen its the lowest America relationship with our recent expansion into Canada and the Caribbean.

Roni Al: Primarily in the Latin annuity market.

Roni Al: We continue to expand our relationship with LTI mined three from our P&C closely focused to add capabilities for sapiens reinsurance months too.

Roni Al: Sapiens has recently entered into a joint business relationship with PwC in the U.S., which will focus primarily on the Latin and European markets. We continue to expand our relationship with LTI MindTree from a PNC course with a focus to add capabilities for Sapiens Risk Master. In addition, we are engaging more with partners in Europe, mainly for higher tiers, to increase our chance of winning. Another major strategic alliance is our partnership

Roni Al: In addition, we are engaging more with partners in Europe, mainly for higher tier to increase our chance of winning.

Roni Al: <unk> has recently entered into a joint business relationship with Pwc in the U S, which will <unk>.

Roni Al: Primarily in the Latin annuity market.

Roni Al: Another major strategic Alliance is our partnership with Microsoft set.

Roni Al: We continue to extend our relationship with LTI mine three from our P&C closely focused to add capabilities for sapiens reinsurance Marseille in.

Roni Giladi: <unk> is one of the few selected vendor to collaborating strategically is Microsoft on open AI.

Roni Giladi: This partnership is central to <unk>, AI strategy and important to our customer as we view these as a low risk innovation.

Roni Al: In addition, we are engaging more with partners in Europe, mainly for higher tier to increase our chance of winning.

Roni Al: Another major strategic Alliance is our partnership with Microsoft.

Roni Giladi: The Microsoft Global and strategic partnership spans across multiple domain. This collaboration is key to our SaaS architecture and all the activities around.

Roni Al: Sapiens is one of the few selected vendors to collaborate strategically with Microsoft and OpenAI. This partnership is central to Sapiens' AI strategy and important to our customers, as we view this as a low-risk innovation. The Microsoft Global and Strategic Partnership spans across multiple domains. This collaboration is key to our SaaS architecture and all the activities around the ongoing development of our SaaS platform and our cloud operation, ensuring that we are using the most advanced capabilities in that area.

Roni Al: <unk> is one of the few selected vendor to collaborating strategically with Microsoft on open AI.

Roni Giladi: The ongoing development of our SaaS platform and our cloud operation ensuring that we are using the most advanced capabilities in that aspect in conclusion, we had a good start to 2024, we are pleased with our global pulled us, particularly in our key region.

Roni Al: This partnership is central to <unk>, AI strategy and important to our customer as we view this as a low risk innovation.

Roni Al: The Microsoft Global and strategic partnership spans across multiple domain. This collaboration is key to our SaaS architecture and all the activities around.

Roni Giladi: <unk> EMEA and North America, our ongoing investment in our solution in partnership with Microsoft reflect our commitment to innovation and ongoing announcement.

Roni Al: The ongoing development of our SaaS platform and our cloud operation ensuring that we are using the most advanced capabilities in that aspect in conclusion, we had a good start to 2024, we are pleased with our global progress, particularly in our key region.

Roni Al: In conclusion, we had a good start to 2024. We are pleased with our global progress, particularly in our key regions, India and North America. Our ongoing investment in our solution and partnership with Microsoft reflect our commitment to innovation and ongoing enhancement. Providing innovative solutions to our customers remains a top priority. We are confident that our efforts will foster additional growth and generate substantial value for our stakeholders. Now, I would like to turn the call over to Roni Giladi, our CFO. Roni

Roni Giladi: Providing innovative solutions to our customers remains a top priority.

Roni Giladi: We are confident that our efforts will fulfill additional growth and generate substantial value for our stakeholders.

Roni Giladi: <unk> EMEA and North America.

Roni Giladi: Our ongoing investment in our solution and partnership with Microsoft reflect our commitment to innovation and ongoing announcement.

Speaker Change: Now I would like to turn the call to <unk>, our CFO warning.

Speaker Change: Thank you Ravi.

Speaker Change: I will begin my commentary by reviewing the first quarter of 2024 and non-GAAP results followed by comments on the balance sheet and cash flow I will wrap up with our guidance for 2024.

Roni Giladi: Providing innovative solutions to our customers remains a top priority.

Roni Giladi: We are confident that our efforts will foster additional growth and generate substantial value for all stakeholders.

Roni Giladi: However in the first quarter of 2024 was 134 million below an increase of seven 6% compared to $125 million in the first quarter of 2023 and higher than 131 million in previous quarter.

Roni Giladi: Now I would like to turn the call to <unk>, our CFO Bonnie.

Roni Giladi: Thank you Roni.

Roni Giladi: I will begin my commentary by reviewing the first quarter 2024 non-GAAP result, followed by comments on the balance sheet and cash flow. I will wrap up with our guidance for 2024.

Roni Giladi: I will begin my commentary by reviewing the first quarter of 2020 for all non-GAAP results followed by comments on the balance sheet and cash flow I will wrap up with our guidance for 2024.

Roni Giladi: On a constant currency basis, our revenue grew by six 6%.

Roni Giladi: Revenue in the first quarter of 2024 was $134 million, an increase of 7.6% compared to $125 million in the first quarter of 2023 and higher than $131 million in previous quarters. On a constant currency basis, our revenue grew by 6.6%. We will now analyze revenue from three different perspectives.

Roni Giladi: We will now annualized revenue from three different perspectives.

Roni Giladi: Revenue in the first quarter of 2024 hour was $134 million, an increase of seven 6% compared to $125 million in the first quarter of 2023 and.

Roni Giladi: Annualized recurring revenue or <unk>.

Roni Giladi: Numbers for Q1 of 2020 full totaled $168 million.

Roni Giladi: And higher than 131 million in previous quarter.

Roni Giladi: While total revenue grew by seven 6%.

Roni Giladi: On a constant currency basis, our revenue grew by six 6%.

Roni Giladi: Our revenue grew by 12, 7% from Q1 of 2023.

Roni Giladi: We will now analyze the revenue from three different perspectives.

Roni Giladi: Revenue mix.

Roni Giladi: Analyzed recurring revenue, or ARR, numbers for Q1 of 2024 totaled $168 million. While total revenue grew by 7.6%, our ARR revenue grew by 12.7% from Q1 of 2023. Avenue Meek's revenue from recurring software products and recurring post-production services totaled $94 million, compared to $82 million in the same quarter of last year, a $12 million increase or 15.2% growth from Q1 of 2023. We continue our journey of transitioning the recurring post-production services into subscription and A.R.R.

Roni Giladi: A new form of recurring software product and reoccurring postproduction services totaled $94 million compared to 82 million rollout in the same quarter of last year.

Roni Giladi: Annualized recurring revenue or <unk>.

Roni Giladi: Our numbers for Q1 of 2020 full totaled $168 million.

Roni Giladi: While total revenue grew by seven 6% our air revenue grew by 12, 7% from Q1 of 2023.

Roni Giladi: A $12 million increase or 15, 2% growth from Q1 of 2023.

Roni Giladi: We continue our journey of transitioning the reoccurring with both production services into subscription and they're not.

Roni Giladi: Revenue mix.

Roni Giladi: Revenue from recurring software product and reoccurring postproduction services totaled $94 million compared to $82 million in the same quarter of last year.

Roni Giladi: Our revenue and we are pleased with our momentum.

Roni Giladi: Youll roughly breakdown.

Roni Giladi: Revenue in North America was $55 million compared to $50 million in the year ago quarter, an increase of nine 5% or 5 billion below.

Roni Giladi: A $12 million increase or 15, 2% growth from Q1 of 2023.

Roni Giladi: We continue our journey of transitioning the reoccurring postproduction services into subscription revenue.

Roni Giladi: Revenue in Europe was $69 million a year over year increase of six 4% compared to $65 million.

Roni Giladi: Revenue and we are pleased with our momentum.

Roni Giladi: revenue, and we are pleased with our momentum. Geographic Breakdown: Revenue in North America was $55 million, compared to $50 million in the year-ago quarter. An increase of 9.5%, or $5 million. Revenue in Europe was $69 million, a year-over-year increase of 6.4%, compared to $65 million. I want to remind you that revenue in Q1 of 2023 was higher than normal, mainly due to catch-up from the previous quarter. And therefore, we only grew by 6.4% quarter over quarter.

Roni Giladi: I want to remind you that revenue in Q1 of 2023, where the higher than normal mainly due to catch up from previous quarter and therefore, we only grew by six 4% quarter over quarter.

Roni Giladi: Youll graphics breakdown.

Roni Giladi: Revenue North America was $55 million compared to $50 million in the year ago quarter, an increase of nine 5% or <unk> 5 billion.

Roni Giladi: Revenue in Europe was $69 million a year over year increase of six 4% compared to $65 million.

Roni Giladi: Revenue rest of World, which includes South Africa, and APAC was $10 million, an increase of five 4% compared to prior year quarter.

Roni Giladi: I want to remind you that revenue in Q1 of 2023, where the higher than normal mainly due to catch up from previous quarter and therefore, we only grew by six 4% quarter over quarter.

Roni Giladi: Gross margin.

Roni Giladi: Gross margin this quarter reached 45, 4% compared to 45, 2% in Q1 of 2023.

Roni Giladi: An increase of 20 basis points.

Roni Giladi: Revenue in the rest of the world, which includes South Africa and APAC, was $10 million, an increase of 5.4% compared to the prior year's quota. Walter Mulder, Gross margin this quarter reached 45.4% compared to 45.2% in Q1 of 2023, an increase of 20 basis points. This increase is mainly due to a higher ratio of recurring and reoccurring revenues versus one-time revenue from implementation. Profit

Roni Giladi: Revenue rest of World, which includes South Africa, and APAC was $10 million, an increase of five 4% compared to prior year quarter.

Roni Giladi: This increase is mainly due to higher ratio of reoccurring and reoccurring revenues versus one time revenue from implementation.

Roni Giladi: Gross margin.

Roni Giladi: Profitability.

Roni Giladi: Gross margin this quarter reached 45, 4% compared to 45, 2% in Q1 of 2023.

Roni Giladi: Operating profit and margin in the first quarter of 2024 was three 4 million and 18, 1% of total revenue.

Roni Giladi: An increase of 20 basis points. This.

Roni Giladi: Respectively, compared with 23 million and 18% in Q1 of 2023.

Roni Giladi: This increase is mainly due to higher ratio of reoccurring and reoccurring revenues versus one time revenue from implementation.

Roni Giladi: As we discussed in previous Investor call. We have made strategic decision to continue our transition to SaaS and increase our sales and marketing investment to further accelerate growth into 2025 and beyond.

Roni Giladi: Profitability.

Roni Giladi: Operating profit and margin in the first quarter of 2024 was $24 million and 18.1% of total revenue, respectively, compared with $23 million and 18% in Q1 of 2023. As we discussed in previous investor calls, we have made strategic decisions to continue our transition to SaaS and increase our sales and marketing investment to further accelerate growth into 2025 and beyond. To achieve that, we say our profitability margin will stay at the same level as 2023, in the range of 18.1 to 18.5%, and our absolute operating profit should grow year over year. As you can see, in Q1, our operating margin was in our target range, and operating profit grew by 7.8%.

Roni Giladi: Operating profit and margin in the first quarter of 2024 was $24 million.

Roni Giladi: And 18, 1% of total revenue.

Roni Giladi: To achieve that we mentioned our profitability margin will stay the same level as 2023 in the range of $18 one to 18, 5%.

Roni Giladi: Respectively, compared with 23 million.

Roni Giladi: And 18% in Q1 of 2023.

Roni Giladi: As we discussed in previous Investor call. We have made strategic decision to continue our transition to SaaS and increase our sales and marketing investment to further accelerate growth into 2025 and beyond.

Roni Giladi: Absolute operating profit should grow year over year.

Roni Giladi: As you can see in Q1, our operating margin target.

Roni Giladi: Target range and operating profit grew by seven 8%.

Roni Giladi: To achieve that we mentioned our profitability margin will stay the same level as 2023 in the range of $18 one to 18, 5%.

Roni Giladi: Yeah.

Roni Giladi: During the quarter with net financial income of $1 1 million coming mainly from interest income from bank deposits of $1 7 million, which was partially offset by dividend interest.

Roni Giladi: In our absolute operating profit should grow year over year.

Roni Giladi: As you can see in Q1, our operating margin was in our target range and operating profit grew by seven 8%.

Roni Giladi: This compares to net financial expenses of $1 $2 million in Q1 of 2023.

Roni Giladi: Net income attributed to <unk> shareholder for the first quarter of 2020 full was $20 million up 18, 4% from $17 million in Q1 of 2023.

Roni Giladi: During the quarter, we had net financial income of $1.1 million, coming mainly from interest income from bank deposits of $1.7 million, which was partially offset by debenture interest. This compared to net financial expenses of $1.2 million in Q1 of 2023. Debt income attributed to Sapiens shareholders for the first quarter of 2024 was $20 million, up 18.4% from $17 million in Q1 of 2023. Earnings per diluted share was $0.36 for the first quarter of 2024, up 16.1% from $0.31 in the first quarter of 2023.

Roni Giladi: During the quarter with net financial income of $1 1 million coming mainly from interest income from bank deposits of $1 7 million, which was partially offset by the benefit of interest.

Roni Giladi: Earnings per diluted share.

Roni Giladi: This compared to net financial expenses of $1 2 million in Q1 of 2023.

Roni Giladi: <unk> for the first quarter of 2024 up 16, 1% from 31 of the first quarter of 2023.

Roni Giladi: Net income attributed to <unk> shareholders for the first quarter of 2024 was $20 million.

Roni Giladi: Turning to our balance sheet.

Roni Giladi: As of March 31, 2024, we had cash and cash equivalents and short term deposits totaling $196 million and debt of $40 million.

Roni Giladi: Up 18, 4% from $17 million in Q1 of 2023.

Roni Giladi: Any bit of diluted share.

Roni Giladi: 36 <unk>.

Roni Giladi: For the first quarter of 2024 up 16, 1% from 31 of the first quarter of 2023.

Roni Giladi: Adjusted free cash flow.

Roni Giladi: For the first quarter of 2024, we generated adjusted free cash flow of 17 million.

Roni Giladi: Turning to our balance sheet, as of March 31st, 2024, we had cash-in-cash equivalents and short-term deposits totaling $196 million and debt of $40 million. Adjusted Free Cash Flow; For the first quarter of 2024, we generated a just and free cash flow of $17 million compared to $20 million in the first quarter of 2023. Our adjusted free cash flow in the first quarter of 2024 was 83.5% of our non-GAAP net income and in line with our target.

Roni Giladi: Turning to our balance sheet.

Roni Giladi: Compared to $20 million in the first quarter of 2023.

Roni Giladi: As of March 31, 2024, we had cash and cash equivalents and short term deposits totaling $196 million and desktop $40 million.

Roni Giladi: Our adjusted free cash flow in the first quarter of 2024 was 83, 5% of our non-GAAP net income and in line with our targets.

Roni Giladi: Adjusted free cash flow.

Roni Giladi: For the first quarter of 2024, we generated adjusted free cash flow of 17 million compared to $20 million in the third quarter of 2023.

Roni Al: During the quarter, we declared a cash dividend of $60 million or 28 cents for the shield.

Roni Al: For the second half of 2023.

Roni Al: Dividend was paid to our shareholders equity at 18 2024.

Roni Giladi: Our adjusted free cash flow in the first quarter of 2024 was 83, 5% of our non-GAAP net income and in line with our targets.

Operator: Today, we are reiterating our 2020 full guidance.

Operator: We expect non-GAAP revenue and operating margin in the range of $550 million to 555, and a pinpoint 1% to 18, 5% respectively.

Roni Giladi: During the quarter, we declared a cash dividend of 16 million or 28 cents per share.

Roni Giladi: For the second half of 2023.

Myanak Tandon: I'll turn now the call back to Orlando only.

Roni Giladi: The dividend was paid to our shareholders on April 18 2024.

Roni Giladi: During the quarter, we declared a cash dividend of $16 million, or $0.28 per share, for the second half of 2023. The dividend was paid to our shareholders on April 18, 2024. Today, we are reiterating our 2024 guidance. We expect non-GAAP revenue and operating margin in the range of 550 million to 555 and 18.1% to 18.5%, respectively.

Operator: We delivered a strong first quarter, we remain committed to delivering results that are aligned with the expectation we set early this year.

Roni Giladi: Today, we are reiterating our 2024 guidance, we expect non-GAAP revenue and operating margin in the range of $550 million to 555.

Speaker Change: To close our prepared remarks and open the call for questions. Operator, we are ready to open.

Roni Giladi: Pinpoint 1% to 18, 5% respectively.

Roni Al: I will now turn the call back to Roni Eldor. Roni?

Myanak Tandon: The call for questions.

Speaker Change: I will turn now the call back to only adult only.

Myanak Tandon: Thank you.

Myanak Tandon: Ladies and gentlemen.

Roni Eldor: Thank you Ronny we delivered a strong first quarter, we remain committed to delivering results that are aligned with the expectation. We set early this year I want to close our prepared remarks and open the call for questions. Operator, we are ready to open.

Myanak Tandon: 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 request. Please press star two.

Roni Al: Thank you, Roni. We delivered a strong first quarter. We remain committed to delivering results that align with the expectations we set early this year. I want to close our prepared statement and open the call for questions. Operator, we are ready to open the call for questions. Ladies and gentlemen... At this time, we will begin the questions...

Speaker Change: If you are using speaker equipment congdon lift the handset before pressing the numbers. Please ask your question in a loud and clear voice.

Operator: 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, kindly lift the handset before pressing the numbers.

Speaker Change: The call for questions.

Speaker Change: Your questions will be pulled in the order they are received.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen.

Myanak Tandon: Please standby, while we poll for your questions.

Operator: 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 request. Please press star two.

Operator: If you are using speaker equipment kangri lift the handset before pressing the numbers. Please ask your question in a loud and clear voice.

Roni Al: The first question is from Marianna tandem.

Operator: Please ask your question in a loud and clear voice. Your questions will be polled in the order that they are received. Please stand by while we poll for your question. The first question is from Myanak Tandon of Needham & Company. Please go ahead.

Speaker Change: Needham <unk> company. Please go ahead.

Myanak Tandon: Your questions will be pulled in the order they are received.

Speaker Change: Thank you hi, Ronnie and Ronnie Congrats on the start to the year great.

Myanak Tandon: Please standby, while we poll for your questions.

Speaker Change: Great quarter. Thank you.

Roni Al: To start with.

Speaker Change: The first question.

Speaker Change: Around just the guidance maybe the framework for next three quarters. If you could just talk about what.

Myanak Tandon: The first question is from <unk> Tandon.

Roni Al: You should expect in terms of the trajectory in terms of revenue and also on the margin front.

Myanak Tandon: Needham <unk> company. Please go ahead.

Myanak Tandon: Thank you. Hi Roni and Roni.

Roni Al: Any seasonality any things that will affect one or two quarters, just wanted to get a better sense of the trajectory of both growth and margins over the course of 2024.

Myanak Tandon: Thank you hi, Ronnie and Ronnie Congrats on the start to the year great.

Myanak Tandon: Great quarter.

Myanak Tandon: Congratulations on the start to the year. A great quarter. Thank you, to start with. The first question is around just the guidance, maybe the framework for the next three quarters, if you could just talk about what we should expect in terms of trajectory in terms of revenue and also on the margin front, just any seasonality, any things that will affect one or two quarters. Just want to get a better sense of the trajectory of both growth and margins over the course of 2024.

Myanak Tandon: Thank you.

Myanak Tandon: To start with the first question is around just the guidance.

Speaker Change: Hi, Mike.

Lonnie: This is lonnie.

Myanak Tandon: The framework for the next three quarters, if you could just talk about what.

Roni Al: So as we mentioned we are reiterating our EBITDA guidance.

Myanak Tandon: What we should expect in terms of the trajectory in terms of revenue and also on the margin front, just any seasonality any things that will affect one or two quarters, just wanted to get a better sense of the trajectory of both growth and margins over the course of 2024.

Roni Al: We start Dave and plan and we continue growing consumer consecutively quarter over quarter to reach the full year guidance in terms of revenue.

Myanak Tandon: In terms of profitability and we hate that it also the margin between $18, one and $18 five.

Roni Al: Hi, this is Roni. So, as we mentioned, we are reiterating our yearly guidance. We start revenue in-plan, and we continue growing consecutively quarter over quarter to reach the full year guidance in terms of revenue. In terms of profitability, we reiterate also that we are balancing between a few factors. The first one is the pace of transition to SaaS. Obviously, if we accelerate this, it can also affect profitability, and the second one is the investment in sales and marketing in order to build a pipeline for better growth for the coming years 2025 and going onwards. With that, we are balancing profitability, so the range will remain 18.1 to 18.5.

Myanak Tandon: Hi.

Ronnie: This is ronnie.

Roni Al: So as we mentioned we are reiterating our yearly guidance.

Roni Al: These two we are balancing between.

Roni Al: We start the revenue in plan in May continue growing consecutively quarter over quarter to reach the full year guidance in terms of revenue.

Roni Al: Few factors. The first one is the pace of transition to SaaS, obviously, if we accelerated these effects also profitability.

Myanak Tandon: And the second one is the investment in sales and marketing also build a pipeline for better growth for the coming years, 2025, and going onwards with that balancing of profitability. So the range, we remain $18 one to 18 complex.

Roni Al: In terms of profitability and we hated it also the margin between $18, one and $18 five.

Roni Al: This way we are balancing between a few factors. The first one is the pace of transition to SaaS. Obviously, if we accelerate do you seek an effect also profitability.

Roni Al: Okay. So it should be fairly linear over the next three quarters I think.

Roni Al: And the second one is the investment in sales and marketing in order to build a pipeline for better growth for the coming years 2025, and going onwards with that we are balancing of profitability. So the range, we remain $18 one to $18 five.

Roni Al: Great.

Roni Al: In terms of revenue in terms of profitability, we leave that there.

Roni Al: The range is to balance between what I mentioned to three factors.

Speaker Change: Got it and then just as a quick follow up I wanted to ask about the SaaS conversion. So are you pushing this with your clients or are your clients coming to you and saying that we want to move over to the SaaS platform and can you help us out.

Myanak Tandon: Okay, so it should be fairly linear over the next three quarters, I think.

Speaker Change: Okay. So it should be fairly linear over the next three quarters I think.

Roni Al: Wayne Caring, Greg Correct, correct. In terms of revenue, in terms of profitability, we leave the range to balance between what I mentioned, the three factors.

Myanak Tandon: Great.

Roni Al: Correct correct in terms of revenue in terms of profitability, we leave that there.

Roni Al: Driving that and then also what are the financial implications of that longer term both in terms of growth and profitability as you move more to that.

Roni Al: The range is balanced between what I mentioned to three factors.

Roni Al: With a SaaS model.

Myanak Tandon: And then just as a quick follow-up, I wanted to ask about the SaaS conversion. So, are you pushing this with your clients, or are your clients coming to you and saying that they want to move over to the SaaS platform, and can you help them out? Just what is driving that? And then also, what are the financial implications of that longer term, both in terms of growth and profitability as you move more to the SaaS model?

Speaker Change: Got it and then just as a quick follow up I wanted to ask about the SaaS conversion. So are you pushing this with your clients or are your clients coming to you and saying that we want to move over to the SaaS platform and can you help us out.

Roni Al: So some new prospects that can save yielded some prospect.

Roni Al: <unk> on subscription Mdc's, all favor as a matter of fact, we have only one proposal today.

Myanak Tandon: Driving that and then also one of the financial implications of that longer term, both in terms of growth and profitability as you move more to.

Roni Al: The SaaS solution and this is what we also engage our customers in terms of existing customers.

Roni Al: So from a new prospect, I can say to you that some prospects insist on subscription, and this is in our favor. As a matter of fact, we have only one proposal today.

Roni Al: I would say that we are more on the pushing side.

Myanak Tandon: SaaS model.

Roni Al: So from a new prospects that can save yielded some prospect they insist on subscription.

Roni Al: They're doing a great wells and influence the full solution SaaS cloud all of that is bundled together with their solution moving to the cloud.

Roni Al: And this is all favor as a matter of fact, we have only one proposal today.

Roni Al: This is a SaaS solution, and this is what we are offering to our customers. In terms of existing customers, I would say that we are more on the pushing side. When they are doing upgrades, we are offering a full solution, SaaS, and cloud. All of that is bundled together with their solution moving to the cloud. In terms of the implications of the financial, we mentioned the beginning of the year, obviously the transition to start the impact on revenue profitability. We believe that this transition can affect around 1% of our organic growth, so basically have a headwind on that, and then on profitability, about 50 basis points, got it, and this is FACTO in the guidance.

Myanak Tandon: In terms of the implication of the financials.

Roni Al: <unk> solution and this is what we're offering to our customers in terms of existing customers I would say that we are more on the pushing side.

Dylan Tyler Becker: Mentioned beginning of the year, obviously transition to SaaS or implication on revenue and profitability.

Dylan Tyler Becker: Believe that this transition can effect around 1% of our organic growth so basically.

Roni Al: Wind out doing upgrade wells are influencing full solution SaaS cloud all of that is bundled together with their solution moving to the cloud.

Speaker Change: A headwind on that end.

Speaker Change: And then on profitability about 60 basis points.

Roni Al: In terms of the application of the financial we.

Dylan Tyler Becker: Okay.

Speaker Change: Got it okay.

Roni Al: We mentioned beginning of the year, obviously transition to SaaS or implication on revenue and profitability.

Speaker Change: And this is factored into guidance.

Dylan Tyler Becker: Okay.

Speaker Change: I appreciate all the color, thanks, Rami and Ronnie.

Roni Al: We believe that this transition can effect around 1% of our organic growth. So basically you have.

Speaker Change: Thank you. Thank you.

Speaker Change: The next question.

Roni Al: A headwind on that and then on profitability about 50 basis points.

Dylan Tyler Becker: From Kevin Kumar.

Speaker Change: Sorry, Dylan Becker.

Alex Zukerman: William Blair. Please go ahead.

Roni Al: Okay.

Roni Al: Got it and these are the same this is a factor in the guidance.

Speaker Change: Hey, everyone.

Speaker Change: Richard you, taking the questions here.

Roni Al: Okay.

Alex Zukerman: Ronnie bolt Ronnie I was thinking of some of the points on on the push versus pull side.

Myanak Tandon: Appreciate all the call outs, thanks Roni and Roni. Thank you.

Speaker Change: I appreciate all the color, thanks, Ronny and Ronnie.

Alex Zukerman: I know we're early in this transition, but you do have about a quarter of the customers that are kind of along this journey I wonder if there is anything that those customers are pointing to resonating with that initial value proposition of the efficiency that those customers are seeing.

Speaker Change: Thank you. Thank you.

Speaker Change: The next question.

Dylan Tyler Becker: is from Kevin Kumar. Sorry, Dylan Becker, and William Blair. Please go ahead.

Kevin Kumar: It's from Kevin Kumar.

Speaker Change: Sorry, Dylan Becker.

Dylan Tyler Becker: William Blair. Please go ahead.

Dylan Tyler Becker: Hey, everyone. Appreciate you taking the questions here. Maybe Roni, both Ronis, could stick with some of the points on the push versus pull side.

Speaker Change: Hey, everyone. I appreciate you taking the questions here any Ronnie I was thinking about some of the points on the push versus pull side.

Alex Zukerman: That's showing up more so in those kind of migration conversations that you're having and kind of validates the value proposition and that can kind of help support some of that pipeline momentum from a conversion perspective.

Speaker Change: I know we're early in this transition, but you do have about a quarter of the customers that are kind of along this journey I wonder if there's anything that those customers are pointing to resonating with that initial value proposition the efficiency that those customers are seeing.

Alex Zukerman: This is Alex Zuckerman speaking.

Alex Zukerman: So we definitely see how the market resonates with.

Dylan Tyler Becker: I know we're early in this transition, but you do have about a quarter of the customers that are kind of along this journey. I wonder if there's anything that those customers are pointing to as responding to that initial value proposition, the efficiency that those customers are seeing? That's showing up more so in those kind of migration conversations where you are having to kind of validate the value proposition, and that can kind of help support some of that pipeline momentum from a conversion perspective.

Alex Zukerman: Strategy.

Speaker Change: That's showing up more so in those kind of migration conversations that you're having to kind of validate the value proposition and that can kind of help support some of that pipeline momentum from a conversion perspective.

Alex Zukerman: Our value offering.

Alex Zukerman: Bye bye packaging with all on the platform and they'd be able to also provide a turnkey solution looking after the major aspects of all their business of the customers in a very comprehensive and cohesive manner. We see we see the interest and we see the interest.

Alex Zukerman: We definitely see how the market resonates with our strategy and our value offering. By packaging it all on the platform and being able to provide a turnkey solution, looking after the major aspects of all the business of the customers in a very comprehensive and cohesive manner, we see the interest of more and more large customers to work with a small number of vendors that can provide them with a full proposition rather than split it between a large number of vendors and many, many smaller interactions.

Dylan Tyler Becker: Insight data and this is Alex Zuckerman speaking.

Alex Zukerman: So we definitely see how the market resonates with our with our strategy and our value offering.

Alex Zukerman: More and more large customers to work with a small number of vendors that can provide them a full proposition rather than splitting two allows a number of vendors are many many smaller interactions and comprehensive of the solution and the fact that we bring in out of the box approach, let's cover the entire business.

Alex Zukerman: Bye bye packaging it all on the platform and they'd be able to provide a turnkey solution looking after the major aspects of all their business of the customers in a very comprehensive and cohesive manner. We see we see the interest and we see the interest.

Dylan Tyler Becker: Central and we definitely see how we present it into the pipeline.

Alex Zukerman: Our small and more large customers to work with a smaller number of vendors that can provide them a full proposition rather than splitting two allows a number of vendors are many many smaller interactions and comprehensive of the solution and the fact that we bring it out of the box approach that cover the entire business.

Dylan Tyler Becker: And.

Dylan Tyler Becker: So this is one path.

Dylan Tyler Becker: What comes together with it is the increase of the end.

Dylan Tyler Becker: Of the wallet share of the deals because we move.

Alex Zukerman: The comprehensiveness of the solution and the fact that we bring an out-of-the-box approach that covers the entire business end-to-end, we definitely see how it resonates with the pipeline. And so this is one part. What goes together with it is the increase in the wallet share of the deals because we move gradually. And we have already seen this over the past couple of years, but this is growing constantly. Deals are larger because we provide more value and more capabilities. And also, the cloud aspect and the SaaS aspect definitely drive this forward.

Dylan Tyler Becker: Gradually and we already see it over the past.

Dylan Tyler Becker: A couple of years, but this is a growing constantly visa allows us because we provide more value and more capabilities and also the cloud, especially in the south aspects definitely drive this forward.

Alex Zukerman: <unk>, we definitely see how it resonates into their pipeline.

Alex Zukerman: And.

Alex Zukerman: So this is one path that what comes together with it is the increase of the aim of the wallet share of the deals because we move a garage.

Speaker Change: Okay, Okay that makes sense thanks, guys.

Roni Al: And maybe just switching over to Ronnie to nice to see the encouraging.

Speaker Change: Hi, Julian we already see it over the past couple.

Roni Al: And then strengthened in North America, and kind of the additional investment in go to market in Canada.

Alex Zukerman: A couple of years, but this is a growing constantly BSA allows us because we provide more value and more capabilities and also the cloud aspect in the south aspects definitely drive this fall.

Roni Al: Right way of thinking about the drivers there is it is it a function of platform maturity and the content that you guys are able to deliver it again, obviously you can go to market capacity.

Dylan Tyler Becker: Okay, that makes sense. Thanks, Alex. And maybe switch over to Roni, too.

Speaker Change: Okay, Okay that makes sense thanks, guys.

Roni Al: Supporting that pipeline is it more work with DSI is all of the above I guess any kind of additional color on what's driving the momentum there.

Roni: And maybe switching over to Ronnie to nice to see the encouraging momentum and strength in North America and kind of the additional investment in go to market in Canada, I guess, what's the right way of thinking about the drivers. There is it is it a function of platform maturity and the content that you guys are able to deliver again, obviously go to market capacity.

Dylan Tyler Becker: It's nice to see the encouraging momentum and strength in North America and kind of the additional investment and go-to-market in Canada. I guess what's the right way of thinking about the kind of drivers there? Is it a function of platform maturity and the content that you guys are able to deliver? Or is it, again, obviously, go-to-market capacity to support that pipeline? Is it more work with DSIs, all of the above? I guess, any kind of additional color, and what's the feeling like there?

Roni Al: As you mentioned is yes, yes, and yes.

Roni Al: Is that coming from the investment that we are.

Roni Al: Yes, we did and we continue to do on the front of the marketing sales customer CEC, what we call managing the huge amount of customer base.

Dylan Tyler Becker: <unk>.

Dylan Tyler Becker: Fortinet pipeline is it more work with ESI to all of the above I guess any kind of additional color on what's really good momentum there.

Roni Al: <unk> and ASI.

Roni Al: As you mentioned, yes, yes, and yes come from the investment that we did and we continue to do in front of marketing, sales, customer service, CC, what we call managing a huge number of customer base and the SI. As you know, for marketing and SI, it takes time, you know, it's building the pipeline and so on. That's one.

Roni Al: As you know for marketing in there and as sites take time, I'd say building the pipeline and so that's one and second is the wide offering that we have.

Dylan Tyler Becker: As you mentioned is is yes, yes, and yes is coming from the investment that we.

Roni Al: We did and we continue to do on the in front of their marketing sales customer cc, what we call managing the huge amount of customer base.

Roni Al: As you know we are very strong.

Roni Al: Close three deals last year and the workers comp it say gave us.

Roni Al: <unk> and ASI.

Roni Al: Jay do you want to fall can also.

Roni Al: As you know for marketing.

Roni Al: Future named <unk>, then we have the insurance part.

Roni Al: And as sites take time.

Roni Al: Building the pipeline and so that's one.

Roni Al: And second is the wide offering that we have. As you know, we are very strong; we closed three deals last year on workers' comp. It gave us a huge amount of work and also a future, investing in the R&D there. Then we have the reinsurance part, really the nice, very nice momentum on the life side based on the component and cost suite. Again, just to remind all the investors that, a year and a half or two years ago, we decided to penetrate the US again with our cost suite life. We had already signed two deals. Right now, we have a very strong pipeline. We have a few customers already selecting us. We are in some kind of engagement process right now to close the deal.

Roni Al: The really the nice very nice momentum on the life side based on the component in cost suite again, just to remind the all the vessels that we are.

Roni Al: And second is that the wide offerings that we have as you know we are very strong.

Roni Al: Class III deals last year in the walk as Colm I'd say give us.

Roni Al: In an hour or two years ago, we decided to to penetrate again to U S. We sell of course with Clive we already signed two deals slipped and we have very strong pipeline we are.

Roni Al: Huge.

Roni Al: I want to fall can also.

Roni Al: Future and investing into R&D. There then we have the reinsurance part.

Roni Al: The really the nice very nice momentum on the life side based on the component and core suite again, just to remind the or the older vessels that we are.

Kevin Kumar: Few customer already select us we are in and some kinds of engagement process right now to close them. So that said cellphones.

Kevin Kumar: Decision is stable, but we see a lot of momentum and also sapiens say.

Roni Al: Now for two years ago, we decided to to penetrate again to U S. With our course with Clive we already signed two deals side now we have very strong pipeline. We are few few customer already select us we are in and some kinds of engagement process like proud to close them. So that said the third point.

Kevin Kumar: Yes, the incremental decision.

Kevin Kumar: The there's still we have challenges on the P&C very competitive situation, but we are the.

Kevin Kumar: Delivery of our unique offering so so all in all it said anything together is.

Roni Al: So that's the third point. The decision is stable, but we see a lot of momentum and also say we are implementing our decision. Still, we have challenges in the P&C business, a very competitive situation, but we believe in our unique offering. So all in all, many things together are good momentum.

Speaker Change: So good momentum.

Roni Al: A decision is stable, but we see a lot of momentum and also sapiens say, where we are.

Speaker Change: Great. Thanks, Ron I think I'll just.

Roni Giladi: Thanks.

Roni Al: The mental decision.

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

Roni Al: The the still we have challenges on the P&C.

Roni Al: The competitive situation, but we.

Speaker Change: Alright, Thanks for taking my question I wanted to touch on.

Roni Al: Delivery of our unique offering so so all in all it Sam anything together is.

Roni: Migrations are bit more just.

Roni Al: So good momentum.

Roni Giladi: Can you talk about the activity during the quarter or was that in line with your expectations and was there any material kind of negative impact to revenue recognition at all in the quarter I know you're targeting about one point of impact for the year, but just curious kind of how the quarter played out.

Dylan Tyler Becker: Great. Thanks, Roni. Thanks, Alex.

Speaker Change: Great. Thanks, Brian.

Dylan Tyler Becker: Thanks. Thank you.

Dylan Tyler Becker: Thanks.

Dylan Tyler Becker: Sure.

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

Dylan Tyler Becker: Yeah.

Dylan Tyler Becker: The next question is from Kevin Kumar of Goldman Sachs. Please go ahead.

Kevin Kumar: Hi, thanks for taking my question. I wanted to touch on cloud migrations a bit more.

Kevin Kumar: Alright, Thanks for taking my question I wanted to touch on.

Roni Giladi: And we think the army so obviously with the new customer and you mentioned all what we offer is on subscription SaaS solution. So and we are starting to decelerate in North America, a year ago. So there is no end in Europe.

Kevin Kumar: Cloud migrations are bit more just can.

Kevin Kumar: Can you talk about the activity during the quarter or was that in line with your expectations and was there any material kind of negative impact to revenue recognition at all in the quarter I know you're targeting about one point of impact for the year, but just curious kind of how the quarter played out.

Kevin Kumar: Firstly right now full on that.

Roni Giladi: Just can you talk about the activity during the quarter? Was that in line with your expectations? And was there any material kind of negative impact or revenue recognition at all in the quarter? I know you're targeting about one point of impact for the year, but just curious about how the quarter played out. Thanks.

Kevin Kumar: Hi, Kevin This is the army so obviously with the <unk>.

Kevin Kumar: So we do not see any major impact to transition now the modulation for existing customer. This is Jeremy that we take several years.

Roni Giladi: New customers, we mentioned all what we offer is on subscription SaaS solution.

Roni Giladi: Hi Kevin, this is Roni. So, obviously, with new customers, as we mentioned, all that we offer is on subscription. It's a solution, and we started this in North America a year ago. So, there is no, and in Europe, we are partially, and right now, full on that.

Kevin Kumar: We are also doing this in a way that we do not want to have significantly deriving wisdom mentioned, we anticipate only 1% and needs to draw in a reasonable pace and so we are completely doing this with transition some of the customer, but it will take a journey of several years of our existing customers.

Roni: And we are starting to decelerate in North America, a year ago. So there is no end in Europe.

Roni: Firstly in right now full on that.

Roni Giladi: So, we do not see any major impact or transition. Now, the migration for existing customers is a journey that will take several years. We are also doing this in a way that we do not want to significantly hurt revenue, as we mentioned. We anticipate only 1%, and it's growing at a reasonable pace. So, we are continually doing this. We transition some of our customers, but it will take a journey of several years for our existing customers.

Roni: So we do not see any major impact to transition now the migration for existing customer. This is journey that will take several years.

Alex Zukerman: Got it that's helpful and then.

Roni Giladi: We are also doing this in a way that we do not want to have significantly the revenue as we mentioned, we anticipate only 1% and needs to draw in a reasonable pace and so we're continuing doing this with transition some of our customers, but it will take a journey of several years of.

Speaker Change: I wanted to ask about the partnership with Microsoft that was called out a few times.

Speaker Change: Yes can you just talk a bit more about the generic capabilities.

Alex Zukerman: They are being offered the carriers there.

Alex Zukerman: How they're leveraging those capabilities and maybe how that differentiates <unk>.

Roni Giladi: Our existing customers.

Alex Zukerman: And there are in the marketplace.

Kevin Kumar: Got it, that's helpful. And then... I wanted to ask about the partnership with Microsoft that was called out a few times. I guess, can you just talk a bit more about the Gen-I capabilities that are being offered to carriers there and how they're leveraging those capabilities, and maybe how that differentiates Sapiens in the marketplace?

Speaker Change: Got it that's helpful and then.

Alex Zukerman: Eight <unk> so.

Kevin Kumar: I wanted to ask about the partnership with Microsoft that was called out a few times.

Alex Zukerman: So few things about our Gen AI initiatives first of all we have a strategic partnership with Microsoft them or so.

Kevin Kumar: Yes can you just talk a bit more about the generic capabilities.

Kevin Kumar: They are being offered to carriers areas.

Alex Zukerman: So we really joined forces together.

Kevin Kumar: How they're leveraging those capabilities.

Alex Zukerman: To provide the next level solutions through the industry and we work very closely with Lora.

Kevin Kumar: And maybe how that differentiation in the marketplace.

Alex Zukerman: Hey, it's Alex. So, a few things about our Gen-AI initiative. First of all, we have a strategic partnership with Microsoft, so we really join forces together to provide the next level of solutions to the industry, and we work very closely with Gen-AI experts and labs and get great support from them. This really helps us to generate the right actuals there.

Kevin Kumar: Yeah.

Alex Zukerman: <unk> exports and labs, and we get a great support from them. This really helps us to to generate the right use cases in terms of the.

Kevin Kumar: Eight <unk> so.

Alex Zukerman: So few things about our Gen AI initiatives first of all.

Alex Zukerman: The app to Isa So our data platform includes several aspects of AI.

Alex Zukerman: We have a strategic partnership with Microsoft.

Alex Zukerman: So we really joined forces together to provide the next level solutions to the industry and we work very closely with Lilly and <unk> exports and labs and get a great support from them. This really helps us to to generate the right use cases in terms of the.

Alex Zukerman: <unk>.

Alex Zukerman: Machine learning predictive analytics model. We currently for example, deploying some of them with some of our customers one customer in South Africa, one customer renewal work, whether we deploy it.

Alex Zukerman: Machine learning use cases as a baseline on top of that we are developing a set of generative AI capabilities. The supposed to areas of the business one is across the external value chain, meaning providing.

Alex Zukerman: So our data platform includes several aspects of AI from a more machine learning, predictive analytics model. We currently, for example, deploy some of them with some of our customers, one customer in South Africa, and one customer in Europe, when we deploy those machine learning use cases as a baseline. On top of that, we are developing a set of generative AI capabilities to support two areas of the business. One is across the external value chain, meaning providing co-pilot and Gen AI capabilities for the different roles and players in the insurance value chain, claim handlers, underwriters, customer service, et cetera, to provide them with, actually, let's say, the ability to perform their role on steroids, bringing operational efficiency, better accuracy, and speed to their performance.

Alex Zukerman: The app to Alastair so our data platform includes several aspects of AI from more machine learning predictive analytics model. We currently for example, deploy some of them with some of our customers one customer in South Africa, Taiwan customer renewal when we deploy it.

Alex Zukerman: Co pilot and Jim AI capabilities for the different roles and players in the insurance value chain claim handlers underwriters customer service et cetera will provide them actually.

Alex Zukerman: Those machine learning use cases.

Alex Zukerman: As a baseline on top of that we are developing a set of generative AI capabilities to <unk>.

Alex Zukerman: Let's say ability to perform their role on steroids bring.

Alex Zukerman: Both to areas of the business one is across the external value chain, meaning providing a co pilot and Jen AI capabilities for the different roles and players in the insurance value chain claim handlers underwriters customer service et cetera to provide them actually.

Alex Zukerman: Bringing operational efficiency better accuracy and speed to their performance.

Alex Zukerman: The other pilots, where we invest is on the let's call. It more of the back office. So the inbound of the of.

Alex Zukerman: Of the platform our ability to to run automatic configuration from document to configure a real released first release of our decision model with the ability to automatically create configuration.

Alex Zukerman: Our let's say ability to perform their role on steroids.

Alex Zukerman: <unk> operational efficiency, better accuracy and speed to their performance.

Kevin Kumar: Just by getting the scope document in word of PBF form a customer and then automatically configure that now we are doing second stage.

Alex Zukerman: The other part where we invest is in the, let's call it more the back office or the inbound of the platform, ability to run automatic configuration from document to configure. We released the first release of our decision model with the ability to automatically create configuration just by getting a scope document in Word or PDF for the customer and then automatically configure that. Now we are doing the second stage. The vision is also to continue with this approach to our core systems.

Alex Zukerman: The other pilots, where we invest is on the let's call. It more of the back office. So the inbound of the of the platform our ability to to run automatic configuration from document to configure. We released first release of our decision model, we have the ability to automatically create configuration.

Kevin Kumar: And the vision is also to continue with this approach to our quality systems.

Kevin Kumar: Today also we developed capabilities to run data migration using AI to map the different Samsung <unk> too.

Alex Zukerman: Just by getting the scope document in word of PDF form a customer and then automatically configure that now we are doing second stage.

Chris Reimer: <unk> from Soc platform to target platform and about how to create documents and letters within the platform. This is all today run on January <unk>. So we have already deployed some cases.

Alex Zukerman: And the vision is also to continue with this approach to our core systems and today also we developed capabilities to run data migration using AI to map the different feeds from solo two.

Alex Zukerman: Today also we developed capabilities to run data migration using AI to map the different fields from source platform to target platform and about how to create documents and letters within the platform. This is all today run on GenAI.

Chris Reimer: And moving forward with the roadmap.

Chris Reimer: To deploy additional the reaction of our customers is very strong. This is a super interesting for them. The market is definitely looking for those capabilities.

Alex Zukerman: From Soc platform to target platform.

Chris Reimer: And we feel it is becoming a differentiator on our side.

Alex Zukerman: And about how to create documents and letters within the platform. This is all today, Ron Lindsay NII. So we have already deployed some cases.

Kevin Kumar: So we have already deployed some cases, and we are moving forward with the roadmap to deploy additional ones. The reaction of our customers is very strong. This is super interesting for them. The market is definitely looking for those capabilities, and we feel it is becoming a differentiator on our side.

Chris Reimer: Okay.

Speaker Change: That's helpful. Thank you.

Kevin Kumar: And moving forward with the roadmap to air to deploy additional the reaction of our customers is very strongly is super interesting for them. The market is definitely looking for those capabilities.

Speaker Change: The next question is from Christopher Terry MA of Barclays. Please go ahead.

Speaker Change: Hi, Thanks for taking my questions and congratulations on the strong results.

Kevin Kumar: And we feel it is becoming a differentiator on our side.

Alex Zukerman: Actually all the topics where.

Alex Zukerman: <unk> mentioned already.

Kevin Kumar: That's helpful. Thank you.

Alex Zukerman: Already but I was wondering if you could just comment on how.

Kevin Kumar: Okay.

Speaker Change: That's helpful. Thank you.

Kevin Kumar: Yeah.

Alex Zukerman: How you see the company positioned.

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

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

Alex Zukerman: In terms of competition, especially in light of the move to the SaaS model.

Chris Reimer: Hi, thanks for taking my questions and congratulations on the strong results. Actually, all the topics were mentioned already, but I was wondering if you could just comment on how you see the company positioned in terms of competition, especially in light of the move to the SAS model, and then just on those legacy customers. What are some of the challenges they're facing, if any, or is it just a matter of time? before they do transition.

Alex Zukerman: Then just on those legacy customers what are some of the challenges they're facing.

Chris Reimer: Hi, Thanks for taking my questions and congratulations on the strong results.

Alex Zukerman: Any or is it just a matter of time.

Chris Reimer: Actually all the topics where a.

Alex Zukerman: Before they do transition.

Chris Reimer: You mentioned already but I was wondering if you could just comment on.

Alex Zukerman: Okay. This is Alex speaking so when we look at our competition sapiens <unk> is a unique company aimed effectively play in both P&C life, North America, Europe and APAC. So when we talk about competition is quite fragmented.

Chris Reimer: How you see the company positioned in terms of competition, especially in light of the move to the SaaS model and then just on those legacy customers. What are some of the challenges they're facing if any or is it just a matter of time.

Speaker Change: The answer to several aspects.

Chris Reimer: Before they do transition.

Alex Zukerman: In North America market.

Alex Zukerman: Okay, this is Alex speaking. So, when we look at our competition, you know, Sapiens is a unique company in the fact that we compete in both PNC Life, North America, Europe, and APAC. So, when we talk about competition, it's quite fragmented, so let me split the answer into several aspects. In the North American market, SaaS itself is not a differentiator in our favor. All the leading players and leading competitors are SaaS, so we are on a par with them.

Alex Zukerman: The Stasi satisfy.

Chris Reimer: Okay. This is Alex speaking so when we look at our competition and also <unk> is a unique company and the fact that we play in both P&C life, North America, Europe and APAC. So when we talk about competition is quite fragmented. So let me split the answer to several aspects.

Alex Zukerman: Is not a differentiator to our favor all the leading all the leading players in our leading competitors on SaaS, where we are on deal.

Alex Zukerman: Them.

Alex Zukerman: And we met the standards of the market as all are expected to run a software SaaS capability.

Alex Zukerman: In North America market.

Alex Zukerman: And so on the on the P&C side, we feel we are on the same level as our competitors in terms of the cloud maturity in some cases, we see a strong advantage to our P&C platform in terms of the upgrade the ability. This is one of the largest challenges for a soft comp.

Alex Zukerman: This asset sale fees.

Alex Zukerman: Is not a differentiator to our favor all the leading all the leading players and you know our leading competitors are SaaS. So we are on pace.

Alex Zukerman: And we match the standards of the market, as all are expected to run a SaaS capability. So on the PNC side, we feel we are on the same level as our competitors in terms of cloud maturity. In some cases, we see a strong advantage to our PNC platform in terms of upgradability. This is one of the largest challenges for SaaS companies in our business to go to a seamless and rapid upgrade process.

Alex Zukerman: With them.

Alex Zukerman: And we met the standards of the market as all are expected to run as a SaaS capability.

Alex Zukerman: And as you know business to go through a seamless and rapid upgrade process. This is where we excel. So this is a small differentiate lifesaver.

Alex Zukerman: And so on the on the P&C side, we feel we are on the same level as our competitors in terms of the cloud maturity in some cases, we see a strong advantage through our P&C platform in terms of the upgrade the ability. This is one of the largest challenges for SaaS companies.

Alex Zukerman: When we look so this is on the P&C side, when we look at the workers compensation side.

Alex Zukerman: We.

Alex Zukerman: Our analysis shows that we are in a very leading position our win rate is very strong our the combination of the technical capabilities of the platform and the richness of the functionality definitely puts us in a strong leading position in the market compared to all our competitors.

Alex Zukerman: Now business to go to a seamless and rapid upgrade process. This is where we excel. So this is a small differentiate lifesaver.

Alex Zukerman: This is where we excel. So this is a small differentiator to our favor. So this is on the PNC side. When we look at the workers' compensation side, our analysis shows that we are in a very leading position. Our win rate is very strong.

Alex Zukerman: When we look so this is on the P&C side, when we look at the workers compensation side.

Alex Zukerman: Similarly, when we look at the life side of course, we have competition in the market, but I think that we are.

Alex Zukerman: We.

Alex Zukerman: Our analysis shows that we are in a very leading position our win rate is very strong our the combination of the technical capabilities of the platform and the richness of the functionality definitely puts us in a strong leading position in the market compared to all our competitors.

Alex Zukerman: Positions very well compared to them both from the technical perspective, the maturity of our cloud proposition on life. They usage of automation tools of Gen AI within the platform.

Alex Zukerman: The combination of the technical capabilities of the platform and the richness of the functionality definitely puts us in a strong leading position in the market compared to all our competitors. Similarly, when we look at the life side, of course, we have competition in the market, but I think that we are positioned very well compared to them, both from the technical perspective, the maturity of our cloud proposition for life, the use of automation tools, and Gen AI within the platform.

Alex Zukerman: And on top of that the fact that we bring to the market the combination of our call.

Alex Zukerman: Similarly, when we look on the life side of course, we have competition in the market, but the things that we are.

Alex Zukerman: <unk> suites together with the life component of illustration underwriting in <unk>, which is a standalone. They are very powerful product combined with our call. We feel there is an unprecedented a proposition to the market the strong differentiator.

Alex Zukerman: Positioned very well compared to them both from the technical perspective, the maturity of our cloud proposition on life. They usage of automation tools of Gen AI within the platform.

Alex Zukerman: And on top of that, the fact that we bring to the market the combination of a core suite together with the life components of illustration, underwriting, and E-App, which as standalone products are very powerful products, combined with our core, we feel there is an unprecedented proposition to the market, a strong differentiator, and we start to see that in the pipeline. So that's the North America market. I think when we look at the European and APAC markets... We see the same story on the life side, so very similar to what we see in North America.

Alex Zukerman: And we start to see that reflecting in the pipeline.

Alex Zukerman: And on top of that the fact that we bring to the market the combination of our call.

Alex Zukerman: So thats the North America market.

Alex Zukerman: Sweet together with the life component a registration underwriting in <unk>, which is a standalone. They are very powerful products combined with our call. We feel there is an unprecedented a proposition to the market the strong differentiator.

Alex Zukerman: I think when we look at the European and APAC markets.

Alex Zukerman: And we see the same story on the life side, so very similar to what we see in North America. The combination of strong technical architecture cloud maturity and functional richness really puts us in a driving position with the life in Europe and in APAC.

Alex Zukerman: And we start to see that reflecting in the pipeline.

Alex Zukerman: So thats the North America market.

Chris Reimer: In P&C, we are considered by all analysts and by the market is it's a two horse race on the big guys. It's Austin Guidewire, leading the market on the P&C side.

Alex Zukerman: When we look at the European and APAC market.

Alex Zukerman: We see the same story on the life side, so very similar to what we see in North America. The combination of strong technical architecture cloud maturity and functional richness really puts us in a driving position with the life in Europe and in APAC.

Alex Zukerman: The combination of strong technical architecture, cloud maturity, and functional richness really puts us in a driving position with life in Europe and in APAC. PNC is considered by all analysts and by the market as it's a two-horse race between the big guys. It's us and Guidewire leading the market on the PNC side. And when we look at APAC, and I think we have also talked about it before, we see a large opportunity for us in APAC. Definitely see ourselves as the leading position in Southeast Asia, both on life and PNC, and we intend to leverage this strong position.

Chris Reimer: And when we look in APAC and I think we also booked a reform.

Chris Reimer: We see large large opportunity for us in APAC.

Chris Reimer: And definitely we see ourselves as the leading position in southeast Asia.

Alex Zukerman: In P&C, we are considered by all analysts and by the market is it's a two horse race on the big guys. It's Austin Guidewire, leading the market on the P&C side.

Roni: Both on life, and P&C and we intend to leverage this strong position.

Alexei Mihaylovich Gogolev: Oh, Thanks, that's great color and just if you could touch on you mentioned that the transition from your current customers would take years.

Alex Zukerman: And when we look in APAC and I think we also talked about with where we see large large opportunity for us in APAC.

Lead scanner: Just wondering what were the contributing factors to that is it just a matter of time.

Alex Zukerman: We definitely see ourselves as the leading position in southeast Asia.

Alex Zukerman: Both on life, and P&C and we intend to leverage this strong position.

Lead scanner: Or is it internal decisions or are there some technical challenges.

Speaker Change: Hi, This is Oh, I mean, there arent any technical issues is a mental its investment from the customer and obviously some suffers during this transition to them.

Chris Reimer: Oh, thanks. That's a great color.

Speaker Change: Thanks, that's great color and just if you could touch on you mentioned that the transition from your current customers would take years I was just wondering what were the contributing factors to that is it just a matter of time.

Roni Giladi: They are not technically we did the almost across all the product of this transition and we continue with the pace of the customer.

Speaker Change: Or is it internal decisions or are there are some technical challenges.

Speaker Change: Got it alright, thanks for that that's it for me.

Chris Reimer: And just so you could touch on, you mentioned that the transition for your current customers would take years. I was just wondering, what were the contributing factors to that? Is it just a matter of time, or is it internal decisions, or are there some technical challenges?

Speaker Change: Hi. This is all named arent any technical issues is a metal of investments on the customer and obviously from <unk> during this transition to them.

Speaker Change: Thank you. Thank you.

Roni Giladi: The next question is from Alex egg overlap.

Speaker Change: J P. Morgan. Please go ahead.

Roni Giladi: Hi, this is Roni. There aren't any technical issues. It's a matter of investment from the customer and, obviously, from Sapiens doing this transition to them. There are not technically any problems; we did this transition across almost all the products. We'll continue with the pace of the customer.

Speaker Change: They are not technically we did the almost across all the product of this transition.

Roni Giladi: Hi, This is Amit Khanna on for electrical go ask my first question was I saw you broke out organic constant currency growth for total revenue did you have to break that out for European revenue as well.

Chris Reimer: Mm-hmm. Got it. All right. Thanks for that. That's it for me.

Roni: We'll continue with the pace of the customer.

Chris Reimer: Got it alright, thanks for that that's it for me.

Chris Reimer: Thanks. Thank you. The next question is from Alexei Gogolev of J.P. Morgan.

Speaker Change: Thanks. Thank you. Thank you.

Roni Giladi: Obviously the impact on the OPM.

Alexei Mihaylovich Gogolev: The next question is from Alex Sorry go ahead.

Alexei Mihaylovich Gogolev: The next question is from Alexei Gogolev, of J.P. Morgan. Please go ahead. Hi, this is a lead scanner for Alexei Gogolev. My first question was, I saw you broke out.

Roni Giladi: The entire impact is coming to the OPM is.

Alexei Mihaylovich Gogolev: Of J P. Morgan. Please go ahead.

Roni Giladi: Our North America relatively impactful currency headwind.

Alexei Mihaylovich Gogolev: Alright.

Speaker Change: On for Alexia.

Roni Giladi: I would like to wait to interact with what I mentioned earlier that in Q1 of 2023 with catch up revenue in European market and we said at the in Q1 2023 in the conference call and even right now and if we eliminate these catch up the company would go almost how ya.

Lead scanner: Your question was.

Lead scanner: Sorry, you broke out.

Lead scanner: Constant currency growth for total revenue did you happen to break that out for European revenue as well.

Roni Giladi: Obviously, the impact on the European market, the entire impact is coming to the European market, as North America does not have an impact on the currency headwind. I would like to reiterate what I mentioned earlier, that in Q1 of 2023, we had catch-up revenue in the European market. We said it in the conference call and even right now.

Alexei Mihaylovich Gogolev: Obviously, the impact on their well being.

Roni Giladi: The entire impact has come into the <unk>.

Roni Giladi: Our North America do not have impact on the currency headwind.

Roni Giladi: Single high single digits. So the entire impact of currency. This quarter was on the open market, but without the cade the catch up that I mentioned, you won't be market, we grow a high single digits.

Roni Giladi: I would like to reiterate what I mentioned earlier that in Q1 of 2023 with catch up revenue in European market and we said at the in Q1 2023 in the conference call and even right now.

Roni Giladi: And if we eliminate this catch-up, the company would grow almost a high single digit. So the entire impact of currency this quarter was on the European market. But without the catch-up that I mentioned, the European market would grow a high single digit. Got it. Thank you.

Speaker Change: Got it. Thank you and then my other question is why.

Roni Giladi: If we eliminate this catch up and the company would go almost day, how you single high single digits. So the entire impact of currency. This quarter was on the open market, but without the cade the catch up that I mentioned European market. We go a high single digits.

Roni Giladi: But the cash conversion and this quarter you saw last year, because typically we see two currently Q a skin care collection quarters here.

Roni Giladi: Yes overall, the cash collection was Vita land between 80% to 85% of.

Yaffa Cohen: non-GAAP net income. This is an overall perspective is you compare Q1 to Q1.

Roni Giladi: And then my other question is, why was the cash collection in this quarter worse than we saw last year because, typically, we see two Q&A sessions, a speaker Overall, the cash collection was within our range, between 80% to 85% of non-GAAP net income. This is an overall perspective. If you compare Q1 to Q1, what we saw in Q4 of 2023, we had very significant cash collection that obviously had an impact on Q1, and also a different approach in Q4 of 2023. So, as you know, cash is almost balanced, it's not P&L, this is the main impact between the two. So we are without a range, and Q4 of 2023 was much higher than Q4 of 2022.

Roni Giladi: Okay.

Speaker Change: Got it. Thank you and then my other question.

Yaffa Cohen: What we saw in Q4 2023, we have very significant cash collection that obviously have an impact on the Q1.

Roni Giladi: But the cash conversion in this quarter than we saw last year, because typically we see chips.

Roni Giladi: I think our collection quarters here.

Operator:

Yaffa Cohen: Different approach in Q4 of 2023, so as you know cash is almost biologics P&L. This is the main the impact between the two so we are without range. In Q4 2023 was much higher than Q4 2020.

Roni Giladi: Overall, the cash collection, we it was with our MGA between 80% to 85% of <unk>.

Roni Giladi: non-GAAP net income this is an overall perspective, if you compare Q1 to Q1.

Roni Giladi: What we saw in Q4 2023, we have very significant cash collection that obviously have an impact on the Q1.

Yaffa Cohen: Got it thank you so much.

Yaffa Cohen: Thank you.

Roni Giladi: And also different approach in Q4 of 2023. So as you know cash is almost violence. It's not P&L. This is the main the impact between the two so we are without range. In Q4 2023 was much higher than Q4 2022.

Speaker Change: There are no further questions at this time before I ask.

Yaffa Cohen: The Africa and to go ahead with her closing statement I would like to remind all participants that a replay of this call will be scheduled and are scheduled to begin in two hours.

Yaffa Cohen: In the U S. Please call 188269.

Speaker Change: Got it thank you so much.

Speaker Change: Thank you.

Yaffa Cohen: Oh five.

Operator: There are no further questions at this time. Before I ask Miss Yaffa Cohen to go ahead with her closing statement, I would like to remind all 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 03-925-5938, and internationally, please call 972-3925-5938. Yaffa, would you like to make your closing statement?

Roni Giladi: Okay.

Yaffa Cohen: In Israel, Please call Oh free 90 255938.

Speaker Change: There are no further questions at this time.

Operator: Before I ask Mr.

Speaker Change: Africa and to go ahead with her closing statement I would like to remind all participants that a replay of this call will be scheduled scheduled to begin in two hours.

Yaffa Cohen: And internationally please call nine.

Yaffa Cohen: <unk> 249 to five <unk>.

Yaffa Cohen: 5938.

Yaffa Cohen: Yeah would you.

Operator: In the U S. Please call 188.

Operator: To make your closing statement.

Operator: Yes. Thank you. Thank you for joining the call today. Please note that sapiens will be participating in three upcoming conferences.

Operator: 8269005 <unk>.

Yaffa Cohen: In Israel, Please call Oh free 90 55938.

Operator: Needham Technology media and consumer conference next week.

Yaffa Cohen: And internationally please call.

Speaker Change: <unk> seven to 49 255938.

Operator: In New York May 14, 2015, we will also be at the Jefferies Software conference on May 29th in Rds on the William Blair growth Conference on June <unk>, well be happy to meet with you.

Yaffa Cohen: <unk> would you like to make your closing statement.

Yaffa Cohen: Yes, thank you. Thank you for joining us on the call today. Please note that Sapiens will be participating in three upcoming conferences. First, the Needham Technology Media and Consumer Conference next week in New York on May 14th and 15th. We will also be at the Jeffrey Software Conference on May 29th and May 30th, and the William Blair Growth Conference on June 6th. We will be happy to meet with you if you attend. We are always happy to answer follow-up questions, so feel free to contact us after this call. Thank you.

Yaffa Cohen: Yes. Thank you. Thank you for joining the call today, please know that savings will be participating in three upcoming conferences.

Operator: <unk> is the right time.

Operator: We are always happy to answer follow up question for free with free to contact us. After this call. Thank you.

Yaffa Cohen: <unk> technology media and consumer conference next week.

Yaffa Cohen: In New York May 14, 2015, we will also be at the Jefferies Software conference on May 29th May already and the William Blair Cross Conference on June <unk>, well be happy to meet with you or is your plan.

Speaker Change: Thank you. This concludes the sapiens International Corporation first quarter 2024.

Operator: <unk> Conference call. Thank you for your participation you May now go ahead and disconnect.

Operator: Yes.

Yaffa Cohen: We're always happy to answer follow up questions. Please free to contact us. After this call. Thank you.

Operator: Thank you. This concludes the Sapiens International Corporation first quarter 2024 results conference call. Thank you for your participation. You may now go ahead and disconnect.

Speaker Change: Thank you. This concludes the sapiens International Corporation first quarter 2024.

Operator: <unk> Conference call. Thank you for your participation you May now go ahead and disconnect.

Operator: Yeah.

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