Sapiens International Corp NV

Welcome to Sapiens International Corporation's 2023 Third 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. It is now my pleasure to introduce your host, Jaffa Cohen-Efrach, Chief Marketing Officer and Head of Investor Relations. Thank you, Jaffa. You may now begin.

Thank you, Operator. I want to welcome you to SAPIEN's conference call to review our third quarter results for 2023. With me on the call today are Mr. Ronnie Aldor, President and CEO, Mr. Ron Gilady, CFO, and Mr. Alex Zuckerman, Chief Strategy Officer. 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 projection or other forward-looking statements. The safe harbor provisions in the press release issued today also apply to the content of the call. Settings expressly disclaim any obligation to update or revise any of the forward-looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise. On today's call, we will refer to the non-GAAP financial measures. 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 our 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 Rony Aldor President and CEO of Sapiens. Rony.

Good morning, everyone, and thank you for joining us today for Sapiens' third quarter 2023 earning calls. Sapiens has delivered another strong quarter in 2023, and I want to start highlighting some key points that demonstrate this fact. First and foremost, we remain committed to deliver results that align with the expectation we set earlier this year. In each quarter of three quarters in 2023, we have delivered revenue growth with extending margins. The third quarter was yet another strong quarter for us, marked by further improvement in our operating margins. Revenue in the third quarter of 2023 totaled $130.8 million, up to 9.9% year-over-year. Operate margins this quarter increased to 18.4%. We are seeing continued momentum in key regions. In North America, our investment and increased sales team have contributed to our success in 2023. And in Europe, we have maintained our strong performance and we are excited about our momentum. Let's start with North America. where we are gaining traction through new logos and expansion with existing customers. Revenue in North America increased by 10.7% year-over-year. One example is our recent win with the American Armed Forces Mutual Aid Association, a non-profit financial solution provider for military families and veterans, who selected SAPEN's post-serious customer acquisition start solution consisting with Sapiens Application Pro, Illustration Pro, Underwriting Pro, and Sapiens Intelligence, as part of its legacy modernization and automation initiative. AAFMAA selected Sapiens based on our proven ability to deliver timely quality products and services in a digital environment, enabling them to better serve their members. It is a new Sapiens customer who's implementing his schedule for completion during the second quarter of 2024. Workers' Comp is category where Sapiens is gaining strength in North America. In the third quarter, we announced that South Carolina State Accident Fund, a state agency that offers guaranteed workers' compensation insurance for governmental entities, selected Sapiens Core Suite for workers' compensation to provide a more intuitive system and detailed workflow automation. SAF will also implement SAPIEN's digital suite and SAPIEN's intelligence for more engaging user experience and enhancing processing, respectively delivery through SAPIEN SaaS platform. Moving to EMEA. Europe continues to be a key region for growth. SAPIEN's revenue in the territory increased by 13.8% year-over-year, continued the growth momentum we saw in previous quarters. The Nordics are a focused region in Europe, where we continue to gain ground. In the third quarter, Atkia Life, one of the Finland's top life insurance, chose Sapiens as its partner to lead its core system transformation via Sapiens Core Suite for Life and Pension. Sapiens was selected for its proven experience in complex insurance ecosystem integration and for providing an end-to-end cloud-first digital enhancement platform for individual and group products across life, wealth, and pension insurance. Actia has recently experienced rapid change in customer behavior. Its digital efforts are critical steps towards enhancing efficiency, and elevating the customer experience along the new product offerings. Moving to South Africa. In the first quarter, a long-standing customer of Sapiens in South Africa, a tier one bank, expanded its use of Sapiens Coffees for Life Extension to launch its group risk proposition. The expanded use of Sapiens Coffees for Life Extension is part of the bank's strategy to launch new and improved products to its customer base. Adopting Sapiens Coal Streets for Life and Pension satisfied the requirements for complete and robust policy administration solutions. In addition, the Tier 1 South African Bank, which expanded its relationship with Sapiens into new territory, went live in Namibia. With Sapiens, we did tweets for property and casualty. as the core system for its short-term non-life insurance business there. The bank already used EDIT suite for its core short-term operating in South Africa and Sapiens core suite for life and pension for its life and annuity businesses. EDIT suite was chosen by the bank for its expansion in Namibia based on its positive experience with the existing Sapiens relationship and successful implementation in Sapiens EDIT suite in South Africa. This win exemplifies how our holistic relationship with our customer through their lifecycle can be growth drivers for Sapiens. Shifting to our product portfolio, we start with product capability and functionality to compete effectively in any region. Sapiens goes further with a comprehensive product offering and dynamic platform that support the entire product lifecycle to bring holistic solutions to customers with business applications, digital data, and decision management products on top of our core P&C and LIFE platforms. All our product segments, including LIFE, P&C, worker compensation, and digital performed well again in the third quarter. We remain committed to provide innovative solutions that meet the evolving needs to our clients. We are receiving awards and endorsements for industry analysts for our course with life and pension platforms in North America and EMEA. These support our growth expectation for this product line in this critical region. In the third quarter, Sapiens' Rensurance Master Platform was named as Luminary Solution in Stellan's Divided Rensurance Solution Global Reports. Sapiens Callsuit for Life and Annuity Platform was named as Luminary Policy Administration Solution by Celent in North America. Sapiens Callsuit for Life and Pension, Celent 2023, excellent awards for the breadth of functionality category in EMEA region and was named a Luminary Solution. On October 2023, we hosted our North America Customer Summit in Tucson, Arizona. I want to take a moment to discuss the importance of our customer summit, which was a critical event for us. This year's summit was the largest ever, with over 500 attendees from 145 companies, including new and long-time customers from all of our business verticals, P&C, workers' comm, life, venture, and decision financial compliance. In addition, we hosted prospects and industry experts from Celent, Datos, Microsoft, and more. We are empowered by the trust and the confidence our customers have in Sapiens. We were also proud to have 23 partners that attended, with 18 sponsoring the events. Microsoft was the gold sponsor, and other industry leaders supported our summit, further underlining the strengths of our partnership and the value they bring to our customers. Our Customer Summit is a platform for meaningful discussion about our roadmap, solution, and industry trends. We have panels featuring industry analysts and customers, offering valuable insights into our industry future and confident insights in our strengths and capabilities for our prospects. This time is focused on our cloud-based digital and data offering across our core suite and business application solution, which enable our customers to grow while realizing operating gains. We had a fantastic feedback from attendees, and there is tremendous excitement around the improvement our offering can bring to their businesses. The success of our customer summit reflects the collective effort of our sales, customer success, marketing, delivery, and management teams in the North America region. Our short leadership and strong partnership spirit enable our customers to run their most critical business functionality successfully. During the conference, we announced the launch of second decision model AI, generative AI solution to enhance automation speed integrated in Microsoft Azure OpenAI services. Decision Model AI, the first product in Sapiens' decision AI portfolio, will address the growing market demand for decision management technology driven by machine learning and AI integration. I want to take a few moments and address the situation in Israel. As you all know, Sapiens is a global company founded the headquarter in Israel. On October 7, Israel was under terror attack by Hamas, a terrorism organization. 1,400 people were killed in the attack, and 242 were kidnapped, civilians, babies, children, and elderly people. This attack forced Israel into a war. Our thoughts are with all the people who are suffering from the situation and those who have lost loved ones. CEPIAT is a mature global organization with key members and operations across the globe. Our global operations include development and support centers in 22 countries, including the United States, Europe, India, and Israel. Additionally, we have global operations centers which well establish a business continuity program among these centers. We are well prepared and organized to continue supporting our customers and employees during these challenging times. In conclusion, we are confident in executing our strategies effectively across our established region in various product categories in which we compete. Our team dedication, highly execution level, has been a factor in our long-term record of success. This confidence fuels our commitment to deliver excellent results to our customers and shareholders. Now I would like to turn it over to C4 to provide more detail on our financial performance.