Sapiens International Corp NV

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. It is now my pleasure to introduce your host, Yaffa Coy-Nifrach, Chief Marketing Officer and Head of Investor Relations. Thank you, Yaffa. You may now begin.

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. Ronny Aldor, President and CEO, Mr. Ronny Giladi, 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 projections or other forward-looking statements. The safe harbor provisions in the press release issued today also apply to the content of this call. Sapiens expressly disclaimed any obligation to update or revise any of these 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 gap to non-gap result has been provided in our press release, which was 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 now turn the call over to Roni Aldor, President and CEO of Sapiens. Roni?

Good morning, everyone, and thank you for joining us today for SAPIEN's fourth quarter 2024 earning call. Our revenue in Q4 was $134 million, a 2.6% increase compared to last year. This quarter showcased solid execution across our key regions and continued expansion of our core life businesses. In quarter four, we signed over 15 deals with new and existing customers across Life and PNC. 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. Overall, in 2024, we signed 36 deals with new and existing customers, We continue to transition existing customers to the cloud, ending the year with a total of 169 customers on the Sapiens cloud, and we see a great potential to accelerate the cloud transition. Let's drill down into our regional performance. First, as promised, our North America businesses deliver robust growth in 2024. 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. 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. The pipeline for North America life businesses is robust, reaching historical levels. 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. We received the 2024 Excellent Award for Customer Base and support for Underwriting Pro, for life and annuities in North America, reinforcing our leadership in life underwriting solutions. These awards recognize Sapient's exceptional solution that empower insurers to streamline their processes and achieve superior customer outcomes. Let me switch to discuss our course with PNC in North America for 2024. In Q4 of 2024, a leading property and casualty underwriting agency, a provider of solution for specialty insurance need, including flood and fine arts, went live on BillingPro, 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. 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. Additionally, we execute the cloud transformation for tier two insurance carriers that provide specialty risk solution across North America. This project includes upgrading to our latest Policy Pro release, which will be completed in early 2025. In quarter four, we release version 12.1 of Core Suite of PNC, which include a technology upgrade, significant improvement to operational monitoring, functional enhancement and integration to Sapiens Digital Suite for both the agent and the consumer and several insurtech partners. These enhancements provide our customer with additional capabilities and improvements that enable businesses growth and enhance platform sufficiency, easy to use distribution and automation. Sapiens continue to invest in North America PNC platform with data suite integration set for 2025, which enables AI automation and advanced analytics. 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 offering. Moving to Europe and to the rest of the world, In Q4, we signed 10 deals across Life and PNC with new logos, as well as existing customers in Europe and the rest of the world. We have had several successful Go-Life projects for customers with our Core Suite Clive solution, EDIT Suite, TIA Suite, and Reinsurance Master. In the European market and the rest of the world, which includes APAC and South Africa, Demand for sapient solutions remains robust, as evidenced by our growing pipeline. 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. In P&C, the demand for Sapiens solutions remains strong despite the extended sales cycle as evidenced by improved deal close momentum at year-end. In the fourth quarter, we signed new P&C deals with both new and existing customers in Europe and the rest of the world. I want to highlight a few new wins this quarter including a leading Sapiens customer in the Nordic region who migrated to the Sapiens Cloud with a significant SaaS agreement, leveraging our Microsoft Cloud strategy and investments. In APAC, we continue our market expansion and strong momentum and close an important PNC platform deal with a leading insurer in the Philippines. This is our first win in this country. Another highlight is Go Live with Sapiens Data Suite for a long-standing customer base in Africa. Having been with Sapiens for nearly two decades, this tier one 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 life and pension. This quarter we signed a new platform deal in Europe We also completed several goal lives in the region. The demand for Sapiens Life platform remains strong, as demonstrated by our growing pipeline. We see significant uplift in RFPs coming to the market and to Sapiens, indicating strong market demand across Europe and South Africa. Although sales cycle in the life tend to be more extended than P&C, as the offset deal size are much larger. Moving to reinsurance. We continue to expand in North America, Europe, and APAC with our Reinsurance Master and Reinsurance Pro solution. And in this quarter, we close new deals with new and existing customers. Let me highlight a couple. In North America, an existing customer, a leading global insurance and investment provider for commercial P&C insurance select Sapiens Reinsurance Master. A major European London market insurer selects Sapiens Reinsurance Master to modernize its highly specialized London market operations. This is the first London market insurer to utilize Sapiens' innovative London market operational reporting services and underwriting supporting messages feature for Reinsurance Master. Lastly, we closed an insurance master deal in the Philippines. 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. As I mentioned earlier, we launched our AI-based Sapiens insurance platform in June 2024. The platform specialize in meeting the unique requirement of each business vertical or domain. We are integrating AI across our core data and digital solution to enhance automation, improve decision making, and drive greater efficiency for insurers. We enable smarter underwriting, more accurate risk assessment, and streamline claims processing by embedding AI-driven capabilities into our core system. Our AI-powered solution leverage advanced data analytics and machine learning to provide actionable insight, optimize workflows, and enhance operational agility. Sapient's intelligent SaaS solution will help insurance modernize their operational improvement, customer experience, and stay ahead in digital and data-driven industry. We are focused on connecting the power of generative AI within our comprehensive vision of using AI to drive business operations. Our latest platform release demonstrates this focus, incorporating powerful AI capabilities that enable both efficiency and decision-making. For agent and broker, our platform delivers a digital portal offering a 360-degree view of customer and prospects, combining GenAI for summarized QA, know your customer, and a suite of machine learning models for strong risk assessment and predictions. Claim handlers and underwriters benefit from our co-pilot GenAI capabilities, which exponentially amplify their ability to manage tasks. Additionally, we have streamlined business rules configuration, enabling the creation of decision trees and rules via GenAI and automated data mapping for documents and later using AI. Looking ahead, we have reached a roadmap to create holistic and GenAI co-pilot experience across the entire platform, further enhancing the value we deliver to our users. Our strategic partnership with Microsoft is instrumental in driving our product innovation, which is cutting-edge AI technology that differentiates our platform's digital transformation capabilities in the insurance industry. In January 2025, we announced the availability of Sapiens SaaS solution in the Microsoft Azure Marketplace. Microsoft Azure customers can purchase Sapiens SaaS solution, enabling them to leverage Azure scalability, reliability, and agility to drive their application development and shape their business strategies. Moving to system integrators. Sapiens continue 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. In 2024, Sapiens formalized a commitment and internal process to support an SI alignment model for our go-to market and delivery. As a result, in 2024, we closed a significant live platform deal in North America with the SI partner, Also, SI were involved with a meaningful number of opportunities. Sapiens continued to strengthen its existing partnership with Deloitte globally and with LTI Maintree in North America. We also developed new partnership with CoForge, LORIMA, Cognizant, and other regional SI. We are excited about the outcomes our growing SI relationship deliver and will continue to develop this valuable channel as a top strategic initiative in 2025. Before I wrap up, I would like to share our focus for 2025. Our commitment to building a robust pipeline and expanding our client base across all key markets remains solid. 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. First, platform innovation and advanced AI capabilities. We will continue to invest in Sapiens Intelligent Insurance Platform, focusing on innovation and client success aims to drive sustainable growth globally and improve our competitive position. We will continue to actively integrate AI into 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 implementational costs. Second, increasing cross-sell to expand with existing customers. Cross-selling to existing customers presents a significant opportunity for growth a specialty considering that most of our customers currently only have one Sapiens product. We have done extensive analysis to validate the cross-selling opportunity for our core business application, data, digital, AI, and decision solution. By identifying and targeting the specific needs of our customers, we can introduce them to additional solutions that complement their existing solution. 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. This effort extends across our entire customer base to drive deeper relationship, maximize customer value, and unlock new growth opportunities. Cross-selling as a shorter sales cycle compared to acquiring new customers allow us to achieve faster revenue growth. Third, accelerating cloud adoption for our existing customer through a scalable and efficient SaaS model. This transition supports our long-term customer relationship and will drive sustained growth and value creation. We now have a unique opportunity to accelerate cloud adoption as our new SaaS solution offers exclusive benefits such as AI-driven capabilities that are not available in older versions. Four, we aim to enhance our growth in our life and pension and annuities businesses globally. The demand for life system transformation is strong as insurers seek to modernize legacy infrastructure. This market shift presents a significant opportunity for our life offerings. Sapiens Life solution featuring market leading components seamlessly integrated into a powerful platform provide a strong competitive advantage in differentiation. This position us as a market leader and we are already gaining significant momentum. Our objective is to capitalize our Momentus pipeline, which currently is the highest among all Sapiens products. And lastly, we continue building out our system integrator partnership globally. 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. there will be an increased focus on maturing the model in North America to support the growth plan in the region. In summary, Q4 2024 marked another quarter of growth and operational progress, and we remain committed to delivering long-term growth across all of our key territories. I will turn the call over to our CFO to provide more details on our financial performance.