Q4 2024 Sapiens International Corp NV Earnings Call
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To be continued...
Speaker Change: Ladies and gentlemen, thank you for standing by. The conference will begin shortly.
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Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen
Speaker Change: Welcome to Sapiens International Corporation's 2024 fourth quarter financial results call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker Change: It is now my pleasure to introduce your host, Yaffa Cohen Ifrah, Chief Marketing Officer and Head of Investor Relations.
Thank you, Yaffa.
You may now begin.
Speaker Change: Thank you, Operator. I want to welcome you to the SAPIENS Conference Call to review our fourth quarter and full year results for 2024. With me on the call today are Mr. Roni Al-Zour, President and CEO, Mr. Roni Giladi, CFO, and Mr. Alex Zuckerman, Chief Strategy Officer.
Speaker Change: 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.
Speaker Change: The safe harbor provisions in the press release issued today also apply to the content of this call.
Speaker Change: On today's call, we will refer to the non-GAAP financial measures. The reconciliation of GAAP to non-GAAP results has been provided in our press release which was issued before the market opened this morning.
Speaker Change: A replay of this call will be available after the call on our investor relations section of the company website or via the website link which is available in the earnings release we published today.
Speaker Change: I will now turn the call over to Roni Aldor, President and CEO of Sapiens.
Arnie
Speaker Change: Good morning, everyone, and thank you for joining us today for SAPIEN's fourth quarter 2024 earnings call. Our revenue in Q4 was $134 million, a 2.6% increase compared to last year.
Speaker Change: This quarter showcased solid execution across our key regions and continued expansion of our core life businesses.
Speaker Change: In Quarter 4, we signed over 15 deals with new and existing customers across Slythe and PMC.
Speaker Change: Since the launch of our insurance platform in June 2024, we successfully closed three platform deals globally, reflecting the positive impact of our insurance platform.
Thank you again.
Speaker Change: Overall, in 2024, we signed 36 deals with new and existing customers.
Speaker Change: We continue to transition existing customers to the cloud, ending the year with a total of 169 customers on the second cloud, and we see a great potential to accelerate the cloud transition.
Let's drill down into our original performance.
Okay.
Speaker Change: First, as promised, our North America businesses delivered robust growth in 2024.
Speaker Change: During Q4, we closed five wins with new and existing customers. These wins reinforce insurance, trust in Sapiens to innovate and drive business transformation, enabling them to remain competitive.
Speaker Change: Our life and annuity businesses continue to expand in quarter after a few successful North America go live and upgrade for our business application. We also continue to grow with new logos.
Speaker Change: The pipeline for North America life businesses is robust, reaching historical levels.
Yaffa Cohen
Speaker Change: Recognizing our commitment to product innovation, one of our key investment areas and growth driver, Sapiens has been honored for the third consecutive time by Celent.
Speaker Change: We received the 2024 Excellent Award for customer base and support for our underwriting pool for lifetime annuities in North America, reinforcing our leadership in life underwriting solutions.
Speaker Change: These awards recognize Sapient's exceptional solution that empower insurers to streamline their processes and achieve superior customer outcomes.
Speaker Change: Let me switch to discuss our course with PNC North America for 2024.
Speaker Change: In Q4 of 2024, a leading property and casualty underwriting agency, a provider of solutions for specialty insurance needs, including flood and fine arts, went live on BillingPro.
Speaker Change: complementing their core solution of PolicyPro and ClaimsPro already in production. This go live with additional application is an example of how our insurance platform enables customer upselling.
Speaker Change: Overall the PNC team in North America completed over 10 upgrades project this year. We see customers upgrading the entire policy suite, billing and claims.
Speaker Change: Additionally, we execute the cloud transformation for Tier 2 insurance carriers that provide specialty risk solution across North America.
Speaker Change: This project includes upgrading to our latest policy pro-release, which will be completed in early 2025.
Speaker Change: In quarter four, we release version 12.1 of core suite of PNC.
Speaker Change: which include a technology upgrade, significant improvement to operational monitoring, functional enhancement and integration to Sapient Digital Suite for both the agent and the consumer and several insured tech partners.
Speaker Change: Sapiens continues to invest in North America PNC platform with data suite integration set for 2025, which enables AI automation and advanced analytics.
Speaker Change: The launch of our PNC platform with the product upgrades will help to enhance our competitive position in North America market and aligns with our go-to market strategy of driving increased connection to our data and digital platform offerings.
Moving to Europe and to the rest of the world.
Speaker Change: In Q4, we signed 10 deals across Light and PNC, with new logos, as well as existing customers in Europe and the rest of the world.
Speaker Change: We have had several successful Go-Lite projects for customers with our CoSuite-Lite solution, EbitSuite, TiaSuite, and ReinsuranceMaster.
Speaker Change: In the European market and the rest of the world which includes APAC and South Africa, demand for sapient solution remains robust.
as evidenced by our growing pipeline.
Speaker Change: There is a continued demand for SaaS platforms across all solution lines and tiers. We are also experiencing increasing demand for AI-driven solutions, as clients increasingly want to leverage AI to enhance operational efficiency and elevate customer experience.
Speaker Change: In PNC, the demand for second solution remains strong despite the extended cell cycle, as evidenced by improved deal-close momentum at year-end.
Speaker Change: In the fourth quarter, we signed new PNC deals with both new and existing customers in Europe and the rest of the world.
Speaker Change: In APAC, we continue our market expansion and strong momentum and close an important PNC platform deal with the leading insurer in the Philippines. This is our first win in this country.
Speaker Change: Another highlight is Go Live with Sapiens Data Suite for a long-standing customer base in Africa.
Speaker Change: Having been with Sapiens for nearly two decades, this T1 customer migrated its data platform to the cloud in a consolidated enterprise-wide view to improve performance and productivity while enhancing security and the overall user experience.
A few comments on lack of pension.
Speaker Change: This quarter we signed a new platform deal in Europe, we also completed several goal lights in the region. The demand for safe and slide platforms remains strong, as demonstrated by our growing pipeline
Speaker Change: We see significant uplift in RFPs coming to the market and to sapiens, indicating strong market demand across Europe and South Africa.
Speaker Change: Moving to reinsurance. We continue to expand in North America, Europe, and APAC with our reinsurance master and reinsurance pro solution. And this quarter we close new deals with new and existing customers. Let me highlight a couple.
Speaker Change: In North America, an existing customer, a leading global insurance and investment provider for commercial PNC insurance, selects Sapiens for Insurance Master.
Speaker Change: A major European London market insurer selects Sapiens Rensurance Master to modernize its highly specialized London market operations.
Speaker Change: This is the first London market insurer to utilize Sapien's innovative London Market Operational Reporting Services and Underwriting Supporting Messages feature for ReinsuranceMaster.
Lastly, we close the insurance master deal in the Philippines.
Speaker Change: On the product front, in the third quarter, we rolled out the Sapiens Decision Underwriting Accelerator, a cutting-edge solution designed to enhance underwriting efficiency and significantly improve straight-through processing for property and casualty insurers.
Speaker Change: As I mentioned earlier, we launched our AI-based Sapiens insurance platform in June 2024.
Speaker Change: The platform specializes in meeting the unique requirement of each business vertical or domain.
Speaker Change: We are integrating AI across our core data and digital solutions to enhance automation, improve decision-making, and drive greater efficiency for insurers.
Speaker Change: We enable smarter underwriting, more accurate risk assessment, and streamline claims processing by embedding AI-driven capabilities into our core system.
Speaker Change: Our AI-powered solution leverages advanced data analytics and machine learning to provide actionable insights, optimize workflows, and enhance operational agility.
Speaker Change: Second, Intelligent Start Solution will help insurance modernize their operational improvement, customer experience, and state ahead in digital and data-driven industry.
Speaker Change: We are focused on connecting the power of generative AI within our comprehensive vision of using AI to drive business operations.
Speaker Change: Our latest platform release demonstrates this focus, incorporating powerful AI capabilities that enable both efficiency and decision-making.
Speaker Change: For agent and broker, our platform delivers a digital portal offering a 360-degree view of customer and prospects.
Speaker Change: combining Gen-AI for summarized QA, know your customer, and a suite of machine learning models for strong risk assessment and predictions.
Speaker Change: Claim handlers and underwriters benefit from our co-pilot Gen-AI capabilities, which exponentially amplify their ability to manage tasks.
Speaker Change: Additionally we have streamlined business rules configuration enabling the creation of decision trees and rules via GenAI and automated data mapping for documents and letter using AI.
further enhancing the value we deliver to our users.
Speaker Change: Our strategic partnership with Microsoft is instrumental in driving our product innovation, which is cutting-edge AI technology that differentiates our platforms digital transformation capabilities in the insurance industry.
Speaker Change: In January 2025, we announced the availability of Sapient SaaS solution in the Microsoft Azure Marketplace.
Speaker Change: Microsoft Azure customers can purchase SAP and SaaS solutions, enabling them to leverage Azure's scalability, reliability, and agility to drive their application development and shape their business strategies.
Moving to system integrators.
Speaker Change: Sapiens continues to make progress this quarter in its collaboration with system integrators. This emerging channel is open doors to insurers that were previously beyond our reach, expanding our market opportunity and our pipeline.
Speaker Change: In 2024, SEC will formalize a commitment and internal process to support an SI alignment model.
Speaker Change: for our go-to market and delivery. As a result, in 2024, we closed a significant light platform deal in North America with the SI partner. Also, SI were involved with a meaningful number of opportunities.
Speaker Change: Sapiens continued to strengthen its existing partnership with Deloitte globally with LTI 9-3 in North America. We also developed a new partnership with Coforge, Morima, Cognizant and other regional FI.
Speaker Change: We are excited about the outcomes our growing SI relationship delivers, and will continue to develop this valuable channel as a top strategic initiative in 2025.
Speaker Change: Before I wrap up, I would like to share our focus for 2025.
Speaker Change: Our commitment to building a robust pipeline and expanding our client base across all key markets remains solid.
Speaker Change: To support this commitment and achieve our goals in 2025 and beyond, we have identified the following areas of focus for our teams and our resources.
Speaker Change: First, platform innovation and advanced AI capabilities. We will continue to invest.
Speaker Change: In Sepin's Intelligent Insurance Platform, focusing on innovation and client success aims to drive sustainable growth globally and improve our competitive position.
Speaker Change: We will continue to actively integrate AI into our offering to enhance various aspects of our customer operation. In addition, we are integrating AI tools into our implementation and delivery process to reduce implementation costs.
Second, increasing cross-cell to expand with existing carcinoma.
Speaker Change: Cross-selling to existing customers presents a significant opportunity for growth, especially considering that most of our customers currently only have one Sapiens product.
Speaker Change: We have done extensive analysis to validate the cross-selling opportunity for our core business application, data, digital, AI, and decision solution.
Speaker Change: By identifying and targeting the specific needs of our customers, we can introduce them to additional solutions that complement their existing solutions.
Speaker Change: We are also increasing our investment in the client management and relationship building by expanding our client partners team and our account management team within our divisions.
Speaker Change: This effort extends across our entire customer base to drive deeper relationships, maximize customer value, and unlock new growth opportunities.
Speaker Change: Cross-selling as a shorter sell cycle compared to acquiring new customers allow us to achieve faster revenue growth.
Speaker Change: Third, accelerating cloud adoption for our existing customers through a scalable and efficient SaaS model. This transition supports our long-term customer relationship and will drive sustained growth and value creation.
Speaker Change: We now have a unique opportunity to accelerate cloud adoption, as our new SaaS solutions offer exclusive benefits such as AI-driven capabilities that are not available in older versions. So, we aim to enhance our growth in our life and pension and annuities businesses globally.
Speaker Change: The demand for life-system transformation is strong, as insurances seek to modernize legacy infrastructure. This market shift presents a significant opportunity for our life offerings.
Speaker Change: Second slide solution featuring market-leading components seamlessly integrated into a powerful platform.
Yaffa Cohen, Roni Al, Yaffa Cohen
Speaker Change: Our Momentus pipeline, which currently is the highest among all Sapiens products.
Speaker Change: And lastly, we continue building out our system integrator partnership globally.
Speaker Change: In 2025, there will be a focus on developing a new pipeline with SI partners while formalizing enablement, training, certification, and joint delivery models to continue to support the strategy.
Speaker Change: There will be an increased focus on maturing the model in North America to support the growth plan in the region.
Speaker Change: In summary, Q4 2024 marked another quarter of growth and operational progress.
Speaker Change: and we remain committed to delivering long-term growth across all of our key territories.
Speaker Change: I will turn the call over to our CFO to provide more details on our financial performance.
Thank you, Roni.
Speaker Change: Revenue in the fourth quarter of 2024 totaled $134 million, an increase of 2.6% compared to $131 million in the fourth quarter of 2023.
Speaker Change: In Q4 2024, we had currency headwind compared to Q3 of 2024.
Speaker Change: On a constant currency basis, our Q4 revenue were $2 million higher than the reported Q4 revenue.
Speaker Change: Reported revenues for Q4 and the full year were in line with the updated guidance we provided last quarter, despite the currency headwind in Q4.
Speaker Change: For Q4 2024, our annualized recurring revenue, ARR, reached $175 million, reflecting 6.5% increase from Q4 last year.
Speaker Change: Higher than the total reported revenue growth during the same period.
Speaker Change: A revenue mix shows that revenue from recurring software products and reoccurring post-production services increased year-over-year by 7.7% to $97 million compared to $90 million in Q4 of 2023.
Speaker Change: Growth of this segment was higher than the overall reported growth in line with our strategy to increase recurring and reoccurring revenues.
Speaker Change: I want to emphasize that recurring and reoccurring revenues in Q4 2024 represent 72.5% of total revenue, reflecting 3.4% increase compared to Q4 of last year.
Moving on to profitability.
Speaker Change: Gross profit in the quarter was $63 million compared to $59 million in Q4 2023.
Speaker Change: The gross margin in the quarter was 46.7% compared to 45.4% in Q4 2023.
representing an increase of 130 basis points.
Speaker Change: This increase in gross margin was primarily due to higher recurring and reoccurring revenue ratio of total revenue with high gross margin than gross margin from one-time implementation.
Speaker Change: Operating profit in the fourth quarter of 2024 was $24 million.
Similar to Q4 2023.
Speaker Change: Net income attributed to Sapphire shareholders for the fourth quarter of 2024 was $21 million.
of the fourth quarter of last year.
Speaker Change: Turning now to full year results for the 12 months ended December 31st, 2024.
Speaker Change: 2024 revenues totaled $542 million, up 5.4% compared to $515 million in 2023.
Speaker Change: We met our full year updated revenue guidance, which we provided in Q3, despite the currency headwind happened in Q4.
Turning to Revenue Mix.
Speaker Change: In 2024, revenue from recurring software products and reoccurring post-production services total $390 million, compared to $342 million in 2023.
A 48 million increase or 14.1% growth.
Speaker Change: This recurring and reoccurring revenue represents 72% of our total revenue in 2024.
Moving to the graphic breakdown.
Speaker Change: Revenue in North America represents 42% of total revenue. Our European revenue represents 50% and the rest of the world represents 8% of total revenue.
Speaker Change: Growth in 2024 was derived from growth of 6.3% in North America, 4.9% in Europe, and 3.7% in the rest of the world.
We do not have customer concentration.
Speaker Change: As evident by the fact that our top 10 customers represent 21.5% of revenue, with no customer representing more than 5% of total revenue.
Speaker Change: Gross profit increased by $16 million in 2024, while gross profit margin increased by 60 basis points, to 45.9%.
Speaker Change: The main reasons for the gross margin improvement are a better ratio of recurring and reoccurring revenue than last year, and improved in offshore ratio.
Our operating profit increased by $5 million, or 4.8%.
Speaker Change: The operating margin was 18.2%, which is in line with our guidance.
Speaker Change: Despite the increasing gross margin of 60 basis points, our operating margin declined by 10 basis points versus 2023.
Speaker Change: Due to our strategic decision at the beginning of the year to increase investment in sales and marketing in absolute dollar and as a percentage from total revenue.
Speaker Change: Net income attributed to Sapien's shareholder for 2024 was $83 million, up 10.5% from $75 million in 2023.
$1.48 up 9.6% from $1.35 in 2023.
Join me now to our Valentines.
Speaker Change: As of December 31st, 2024, we had cash-in-cash equivalents and short-term deposits totaling $216 million and debts of $40 million.
Speaker Change: In January 2025, we paid the annual debenture coupon of $20 million.
Speaker Change: The last and final payment of $20 million is scheduled for January 2026.
Turning to Adjusted Free Cash Flow.
Speaker Change: In Q4 2024, we generated an adjusted free cash flow of $41 million compared to $37 million in Q4 2023.
Speaker Change: During 2024, we generated a just-of-free cash flow of $75 million, compared to $71 million in 2023.
Speaker Change: Our adjusted free cash flow represents 89.5% of our long gap net income, proving our business model of converting net profit to free cash flow.
Let me now introduce our guidance for 2025.
Evening.
Speaker Change: Non-GAAP revenue in the range of $553 million to $558 million, representing growth of 2.4% at the midpoint.
Speaker Change: This growth assumes currency headwinds on revenue mainly to the Euro and Pound, which has weakened by 4 and 2% respectively.
Speaker Change: This is the USA dollar. On a constant KNC basis, our growth rate would be 3.4%.
Profit.
Speaker Change: Non-GAAP operating profit in the range of 98 to 102 million with operating margin of 18% at the midpoint.
Speaker Change: On a constant exchange rate, our operating profit would be higher and imply an operating margin of 18.7%.
Speaker Change: The negative currency impact on operating profit is mainly due to the Euro and Pound weakening versus the USA Dollar and the strengthening of the Israeli Shekel versus the USA Dollar.
Let me elaborate on the factors impacting our 2025 guidance.
Speaker Change: In Q3 2024 Earning Calls, we discussed the factors impacting 2024 and 2025 growth.
From Michigan to Sauce
Co-op PNC North America and macroeconomic uncertainty.
Speaker Change: We will now provide an update on these verbals as they relate to our growth outlook.
They transitioned to SARS.
Speaker Change: We anticipate a similar impact on growth in 2025, as we mentioned in the earning call of Q3.
Speaker Change: with the transition of an existing customer and the signing of new SAAS contracts expected to create an estimated 2-3% revenue headwind.
Copenhagen, North America
Macroeconomic uncertainty continues to persist across global markets.
Speaker Change: Including North America, the Middle East, and other regions. We do not control these factors and cannot predict when they will stabilize.
Speaker Change: Those macroeconomic factors can lead to delay in signing new deals, which can in turn impact our revenue growth.
Speaker Change: In late Q4 of 2024, we had a strong deal closing momentum.
Speaker Change: Even with this strong deal-closing momentum, the timing of these closing effects the pace of revenue realization in 2025, and as a result, our overall growth.
Speaker Change: I want to reiterate that we remain focused on accelerating a growth trajectory. To accelerate our growth beyond 2025, we are taking the following steps.
Speaker Change: 1. Expanding new logo acquisitions globally. We are strengthening our sales team, introducing our comprehensive insurance platform, and deepening our relationship with system integrators.
Speaker Change: Since we started our initiative to work with SI, we signed two new logos in North America through SI partnerships.
Roni Giladi, Roni Al, Yaffa Cohen
Driving cross-sell opportunity with existing customers.
Speaker Change: We are expanding our team and leveraging our pre-integrated insurance platform as a key enabler to cross-sell additional applications and maximize customer value.
Speaker Change: In 2024, gross selling grew by 18% compared to last year.
Three.
Advancing the Transition of Existing Customers to Cloud and Subscription
In 2023, we successfully migrated seven customers to the cloud.
followed by additional 10 cloud migrations in 2024.
Speaker Change: The total number of cloud customers at the end of 2024 was 169, and we are focused on accelerating this momentum in the coming years.
Speaker Change: Currently, 28% of our customers are on the cloud, and our goal is to reach over 60% of our total customers within the next 5 years.
Reinforcing our commitment to long-term growth and higher ARR ratio.
Speaker Change: Before handing the call back to Roni and Dor, I want to reiterate that we remain focused on successful execution of our strategy, prioritizing sustainable growth and profitability.
Roni Aldor: I will now turn the call back to Roni Aldo. Roni? Thank you, Roni. We deliver a solid fourth quarter reflecting the progress across our key markets. Our continued investment in our insurance platform remains a critical driver for growth.
Most importantly
Roni Aldor: We are committed to deliver long-term growth across all of our key territories and reinforce our position as a trusted provider.
Roni Aldor: of Intelligent Insurance Solutions. I want to thank our global team for their commitment to excellence and growth and our investor for their ongoing support of Sapiens. I will now ask the operator to please open the call for questions.
Roni Aldor: Thank you. Ladies and gentlemen, at this time we will begin the question and answer session.
Speaker Change: 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. Please ask your questions in a loud and clear voice. Your questions will be polled in the order they are received. Please stand by while we poll for your questions.
Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen
The first question is from...
Dylan Becker of William Blair. Please go ahead.
Hey guys, nice job here. Maybe, um, Roni, a
Yaffa Cohen, Roni Al, Yaffa Cohen
Speaker Change: You touched on a lot of the cloud customers landing more wall-to-wall, having that kind of full-sweep adoption approach due to the integration of the platform. I wonder how that kind of fuels your confidence in those two initiatives given you do have a vast ecosystem of customers to migrate, and it seems that their propensity to kind of spend more and adopt more of the core platform continues to grow into the cloud as well.
Yes, hi, this is Roni Al.
Speaker Change: To answer your question about the cloud and the platform, in both areas we feel very comfortable.
For the new clients, this is almost standard, so it's...
Speaker Change: We are more trying to convince the customers to vote, but we are not pushing, and this is our plan for the future, for in the upgrade situation that they will have, to push them to the cloud.
So that's for myself, maybe Alex wants to add.
Speaker Change: So there, just to add to what Roni said, this is Alex.
and when it comes to the existing customers so
again reiterate what Roni said
Speaker Change: We increased the pace of transferring existing customers from on-prem to cloud, a place to continue and focus on that to reach the 60% level within the next five years. This is one clear target.
Speaker Change: The second one is the modular notion of the platform allows us to come back to our customer, to the existing customer base.
Speaker Change: and find their missing solutions that we can provide. So we see a large white space within our customer base.
and Roni Giladi, Roni Al, Yaffa Cohen
Speaker Change: Yaffa Cohen, Yaffa Cohen, Roni Giladi, Roni Al, Yaffa Cohen, Roni Al, Yaffa Cohen, Roni
Speaker Change: the team at Sapiens that looks after existing accounts and we are encouraging them to go stronger after this customer base.
Speaker Change: Maybe one more sentence into that, this year we've been able to transfer 10 existing customers to the cloud.
We see also increasing momentum on this opportunity.
Speaker Change: We've also been able to transfer big accounts that give a confidence that we are being able to do this with many customers of us going forward, and this gives us the notion of reaching 60% in five years.
Got it. Okay. Thank you all. That was really helpful.
Speaker Change: Maybe to the life side seems to be another area of notable strength.
Speaker Change: Can you kind of give us a sense, maybe, the dynamics, obviously, on that space that are pushing for faster modernization now, and maybe how we can kind of reconcile that or look back at some of the trends you've seen play out, or you're seeing play out maybe on the life side, relative to how the P&T modernization opportunity has played out over the last several years, too, because that sounds really exciting as well.
So this is Alex again
and Yaffa Cohen.
Speaker Change: Strong emphasis of carriers to replace systems and to drive modernization on the life side.
distribution, Yaffa Cohen Foundation.
This is a combination of factors. One is...
the overall digitalization of the world.
Speaker Change: and the strong competition that requires them to be tech savvy.
Speaker Change: The second part is the macroeconomics, the volatile stock market, the interest rate, the inflation, the old drive.
and Yaffa Cohen, Yaffa Cohen and Yaffa Cohen.
Speaker Change: that on this case provide a strong differentiation because we managed to combine.
Speaker Change: Yaffa Cohen, Yaffa Cohen, Roni Giladi, Roni Al, Yaffa Cohen, Roni Al, Yaffa Cohen, Roni
Speaker Change: combined offering that really ticked the boxes for the majority of needs of our customers. And we see great adoption on the platform notion with the customers. It's a strong differentiation compared to our competition in the market.
Roni Giladi, Roni Al, Yaffa Cohen
Speaker Change: Okay, great. Thanks, Hollis. Really helpful there. Maybe one last clarification for Roni G. Here, you guys gave out the constant currency revenue number and impact in the 2024, but any sense on constant currency from an ARR perspective in the quarter? And you can have a think about 25 given the post-production strength we continue to see in the business. Thanks, guys.
Thank you.
and Roni Giladi, Roni Al, Yaffa Cohen
Speaker Change: And as we mentioned, we'd like to do a transition to the cloud which will support this ARR. And what we discussed a minute ago, and obviously all the new customers are automatically on the cloud, on subscription based. So both of these factors will impact the ARR growth and increase the growth rate to 10% and onwards.
Thank you guys. Appreciate it.
Thank you. Thank you.
Speaker Change: The next question is from Chris Reimer of Barclays. Please go ahead.
Chris Reimer: Hi, thanks for taking my question. I was wondering if you had been thinking about MNA in the pipeline and...
and Roni Al, Yaffa Cohen.
Speaker Change: Yaffa Cohen, Yaffa Cohen, Roni Giladi, Roni Al, Yaffa Cohen, Roni Al, Yaffa Cohen, Roni
Speaker Change: We have an internal team that is looking for that and we are pursuing several opportunities
Speaker Change: Yaffa Cohen, Yaffa Cohen, Roni Giladi, Roni Al, Yaffa Cohen, Roni Al, Yaffa Cohen, Roni
Speaker Change: I can emphasize that during 2024, we had a good opportunity in the European market.
Yaffa Cohen, Roni Al, Roni Al, Yaffa Cohen
Speaker Change: I am mentioning this to show the confidence that we are really engaged in this opportunity and we are looking in 2025 to complete at least one M&A in the next, until the end of the year. So, fully engaged in this opportunity to execute, we have the cash.
and you are ready to do so.
for it.
Speaker Change: Great, thanks for that. That's great color. That's it for me.
Speaker Change: The next question is from Alexei Gogolev of J.P. Morgan. Please go ahead.
Speaker Change: Hello everyone. Roni G, I was wondering if you can elaborate on the comment you made about customer concentration.
Speaker Change: I've noticed that the top trend now represents 21.5% versus 18.8% in 2023.
Speaker Change: Hi, Alexei. This is Roni. Obviously, I think we have amazing metrics in terms of customer concentration.
There isn't anyone dependent on the customer, as I mentioned.
Speaker Change: Going forward we are looking to keep this momentum of the same level 21 20 percent of the top 10 and Less than 5 percent from the overall we do not see IDs for this customer mostly no tricks for seconds
Speaker Change: Okay, thank you. And then a follow-up on Dylan's question about cloud. So as I understood, you've added 10 customers to Sapien's cloud in 2024.
Speaker Change: It sounds like you're looking to add another 200 over the next...
five years
Um, can you talk about, uh, uh,
Roni Giladi, Roni Al, Yaffa Cohen
and others to migrate to the cloud.
Speaker Change: Yes, obviously the growth from 28% to 60% looks a lot, but if you dive into the figures, we basically came from two verticals. The first one that is ongoing all the time, as Enroni and Alex mentioned.
Speaker Change: All new deals that we are signing are on the cloud subscription.
and Yaffa Cohen, Yaffa Cohen and Yaffa Cohen.
Yaffa Cohen, Yaffa Cohen, Roni Giladi, Roni Al, Yaffa Cohen
Speaker Change: Last year we did 10, we are looking to increase these factors even to 15, 20 and 30 going forward and that the adoption for subscription slash cloud is going bigger and bigger as we speak.
Speaker Change: So coming from two verticals, new customer and shifting existing one to a cloud.
total in 2024.
a similar number to 20.
23, but could you maybe talk about that?
for the contribution.
Speaker Change: to ARR and the average size of those fields have been...
has increased year over year.
Speaker Change: No, the contribution did not decrease. But in the early years, the contribution today is slightly smaller than as we continue.
Yaffa Cohen, Roni Al, Yaffa Cohen
Speaker Change: Are those deals mostly in PNC or in life or equally? Across the board.
Okay, perfect. Thank you, Roni.
Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen
There are no further questions at this time.
Roni Giladi, Roni Al, Yaffa Cohen
Speaker Change: Before I ask Ms. Yaffa Cohen-Frosch to go ahead with her closing statement,
Speaker Change: I would like to remind participants that a replay of this call is scheduled to begin in two hours. In the U.S., please call 1-888-269-0005. In Israel, please call 03-9255-938. And internationally, please call 9723-9255-938. Ms. Cohen-Ifrach, please go ahead.
Speaker Change: Thank you for joining our call today. We look forward to discussing our first quarter results on the next earning call. We welcome you to contact us if you have any further questions. Thank you.
Thank you. This concludes the Sapiens International Corporation.
Speaker Change: 4th Quarter 2024 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.
Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen
Roni Giladi, Roni Al, Yaffa Cohen