Sapiens International Corp NV

Welcome to Sapiens International Corporation's 2025 First Quarter Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. It is now my pleasure to introduce your host, Yafa Kohani-Frah, Chief Marketing Officer and Head of Investor Relations. Thank you, Yafa. You may now begin.

Thank you, Operator. I want to welcome you to the Sapiens Conference Call to review our first quarter of 2025 results. With me on the call today are Mr. Rony Aldor, President and CEO, Mr. Rony Dinadi, CFO, and Mr. Alec Zuckerman, Chief Strategy Officer. Following the summary of the results, we will all 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 applies to the content of the call. Statements expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in viewer expectations, or otherwise. 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. A replay of this call will be available after the call on our infrastructure relations section of the company website or via the website link, which is available in the early 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 Sapiens' first quarter 2025 Earning Call. This quarter showcased solid operational execution across our key regions, led by continued momentum in our last business with notable strength in North America. Demand is building for our solution and we believe we are well positioned with Robust Portfolio to meet the growing needs of our clients and capture new opportunities in the market. I would like to begin by discussing two exciting strategic M&A transactions that Sapiens recently announced. Sapiens has implemented a growth strategy that includes several levers to accelerate our businesses. an important one of which is acquisitions. Our approach is to explore strategic M&A opportunity and target that with assist sapiens to reach its strategic objectives, typically around the following areas. Adding complementary solutions to our portfolio that strengthen our value proposition and adding new capabilities to our platform offerings. Accelerate customer acquisition, attract top insurance talent, and drive scalable geographic expansion. On April 22nd, we announced the acquisition of Cadela, a leading intelligent automation company serving blue-chip life insurance clients in APAC market. This acquisition enhances the capabilities of our life platform and expands our footprint in APAC. Candela offers an end-to-end smart insurance automation platform along with digital services and solutions. The company brings 23 customers to seconds, primarily in the rapidly growing market of Singapore, Malaysia, Thailand, and Hong Kong, and South Africa. With an expanded physical presence in the region, we are better positioned to accelerate penetration gains in the APAC market. With nearly 30 years of deep industry expertise and teams of over 100 employees, Candela's strong track record will serve as an important catalyst to support Sapiens' strategy in APAC, while providing innovating new capabilities to Sapiens' global customer base. Candela's solutions are complementary to Sapiens' life insurance platform, which we intend to leverage to enhance our life offering globally. In addition to Candela, on April 28th, we announced the acquisition of Advantage Go, a leading commercial insurance software provider specializing in underwriting broadband solutions for both London market and broader global specialty and commercial markets. This strategic acquisition significantly enhanced September's global P&T proposition Adding cutting-edge underwriting workbench capabilities that address one of the most critical challenges in the P&C industry today. Managing, assessing, and writing risk more effectively. Our analysis shows that this market segment is rapidly growing across both North America and EMEA in correlation with insurers' need to improve their risk management. With Advantage Go, servants will expand across the London specialty market and other specialty hubs such as Bermuda and Singapore, and in the specialty and commercial markets across Kenya, APAC, and North America. Our vision is to integrate Advantage Go's solution into servants' insurance platform for PNC while also offering them as a standalone product. This approach enables us to address both new prospects and existing customers, enhancing our value proposition across multiple markets. This acquisition aligns with certain strategies to accelerate penetration to the London specialty market, enhance its value proposition to the P&C insurers, and strengthen its support for the insurance market. The London specialty market is a global hub for complex and high-risk insurance and reinsurance, where brokers and underwriters negotiate bespoke coverage primarily through London and London company markets. The London specialty market is one of the largest in the world and represents a significant opportunity for Sapiens to expand its footprint. The underwriting workbench segment is growing significantly as insurers recognize the value of sophisticated decision support tools. The demand for underwriting workbench is growing, and according to the research firm Celent, the number of workbench deals is expected to rise in 2025 and 2026. Advantage Go will also strengthen safety and value proposition in North America P&C market by enhancing its capability for insurers operating in the complex specialty and commercial lines. Now, moving on discuss the first quarter of 2025. Revenue in the first quarter of 2025 total $136 million compared to $134 million in the first quarter of 2024. In Q1 2025, we had a negative currency impact compared to Q1 2024. On a constant currency basis, our revenue would have been $2 million higher. In Q1, we continue to sign new deals and extend relationships with existing customers across both light and pink sea segments. Less than one year since the launch of our insurance platform, we are already seeing promising customer adoption, a clear indication that our strategic investments are resonating with the market and delivering results. We are continuing with transition of existing customers to the cloud, while also onboarding all new customers to Satan's cloud. Let's drill down into our original performance. First, our North America businesses continue its growth trajectory this quarter with accelerating demand for lifetime annuity solutions. Our lifetime annuity business has benefited from strategic investment we have made to drive growth, and our new business wins reflect the success of this initiative. In the first quarter, we have multiple wins with new and existing customers. which underscore insurers' confidence in settings to innovate, support businesses' transformation, and help solidify their competitive positions. During the first quarter, we signed a new life platform deal in North America, which is incremental to the two life platform deals signed in North America last year. As we reported this quarter, a major U.S. multi-line insurer expanded its partnership with us by selecting Sapiens' insurance platform for life and annuities, which includes Sapiens Core Suite for life and annuities, Sapiens Data Suite, and Sapiens Cloud Services. For nearly decades, this existing customer has successfully utilized Sapiens Underacting Pro, and the implementation of Sapiens' insurance platform will further accelerate its digital transformation. In addition, this quarter we had several goal lights across our last solution, course with Illustration Pro and Underwriting Pro, while also making innovative progress with several important project updates. During the first quarter of 2025, we announced the release of StepN's Underwriting Pro version 14, which has our award-winning, most advanced automated underwriting and new business case management system for life and annuities insurers. The release delivers significant technical enhancements, accelerates greater operational efficiency, seamless communication, and advanced AI-driven capabilities. Also, during this quarter, we announced the latest release of Sapiens Illustration Pro and Sapiens Application Pro, featuring enhanced automation, risk intelligence, and operational efficiency, empowering agents and advisors to illustrate policies, manage users, and integrate seamlessly with underwriting and sales platforms. Turning to work and compensation, this market continues to hold strong potential for statements throughout the US and Canada over the coming years. Over the course of the first quarter, our workers' compensation team has demonstrated the progress in the implementation of several key projects, as evidenced by the completion of two goal lines we see in Coreswift for critical workers' compensation upgrades. Let me switch to discussing the performance of our Coreswift PNC in North America. Sapiens continues to invest in North America's PNC platform with data suite integration set for 2025, which enables AI information and advanced analytics. I need to share that we signed a new PMC deal for client processing with North America-based customers in this quarter. With continued diligent investment in our platform, we are seeing initial positive trends in 2025, And as I mentioned before, the acquisition of Advantage Gold will enhance our P&C platform for North America market. Moving to Europe and the rest of the world. In European market and the rest of the world, which includes APAC and South Africa, demand for second solution remains solid. In quarter one, we secure multiple deals across Light and P&C with new logos, as well as existing customers in the region. We had a numerous successful go-live projects for customers with our EDITH Suite, ScoreSuite for Life, TIA Suite and Reinsurance Master Upgrades. A significant highlight in the quarter is the go-live with our existing P&C Customer Inbox as a leading insurance in the UK and second partner for over a decade. eSports provides tailored solutions for businesses and high-net-worth private clients. This importance sets forward indicative of eSports' commitment to enhancing business performance, resilience, and customer satisfaction. I want to highlight that eSports UK, with relation to Setem's latest cloud-native architecture, delivered an immediate average improvement of 30% in application speed along with improved operations productivity and more consistent services delivery. P&C expansion is a top priority for Settance, and the recent acquisition of Advantage Go strengthened our value proposition in specialty and commercial P&C markets while providing immediate access to the London specialty market. Moving to the life and pension segments. This quarter, we signed new deals with Universal Life, a living life and health insurance based in Cyprus. As part of the conditional agreement, Unilife will leverage second-course rates for life and pension to modernize its core insurance process and drive strategic growth initiatives. Following an extensive evaluation process, Unilab chose Sapiens, which validates our superior digital SaaS solution for both individual and group life pension projects. Also this quarter, one of the largest global life insurers has selected Sapiens' insurance platform for life and pension to drive digital transformation for its Czech Republic business, modernize its core insurance process, and accelerate its growth strategy. The insurer was looking to replace its legacy platform with innovative core systems that would empower the company to integrate new technologies and expand functionalities as it scales. Sapiens' robust cloud-based digital platform will optimize efficiency, simplify policy and trends management, and improve digital engagement for both customers and brokers. This collaboration expands Sapiens' presence in Central and Eastern Europe, reinforcing our commitment to delivering innovative insurance solutions worldwide. Moving to reinsurance, we are seeing growing demand for insurers across all tiers, high, medium, and low, as they look modernized and streamlined reinsurance operations. We continue to expand across North America, Europe, and APA with our reinsurance master and reinsurance store solutions. Moving to APAC region. The momentum at the end of last year has continued into the first quarter of 2025. The region remains a priority for us and will continue to focus on accelerating growth, which the Candela acquisition supports. In the quarter, we secure a new APAC win for PMC with Pioneer Insurers and Surety Corporation. The leading insurance provider in Philippines, Pioneer chose Sapient's insurance platform to drive its digital transformation and UX enhancement. This is an important new win in the region that reinforces our strategy to improving core processing throughout our advanced technology, enabling our customers to navigate evolving market trends with precision. Innovation remains a cornerstone of our playbook. Our AI-based acceptance insurance platform continues to evolve with specializations in addressing the unique requirements of each business vertical or domain. We are integrating AI across our core data digital solution to enhance automation, improve decision-making, and drive greater efficiencies for insurers. By embedding AI-driven capability into our core system, we enable smarter underwriting, more accurate risk assessments, and streamlined claims processing. Our roadmap is robust as we continue to develop a holistic, Gen-AI-based co-pilot experience across the entire platform, further enhancing the value we deliver to our customers. Before I wrap up, I would like to reiterate our focus for 2025. We are committed to building a robust pipeline and expanding our client base across all key markets. To support this commitment and achieve our goals, we are focusing our teams and resources on, first, platform innovation and advanced AI capabilities. we will continue investing in Sapiens Intelligent Insurance Platform to drive sustainable growth globally and improving our competitive position. Second, increase cross-sell to expand relationships with existing customers. Cross-selling to existing customers represents a significant opportunity for growth. Third, accelerating cloud adoption for our existing customers through a scalable, efficient SaaS model. Our advanced solutions are experiencing strong momentum in customer utilization and we remain on pace to achieve our target penetration rate over 60% within the next five years. Four, enhance growth in our life businesses globally. The demand for life system transformation is strong as insurers seek To modernize legacy infrastructure, the market shifts present a significant opportunity for our life offerings. Fifth, we will continue building out our system integration partnership globally. Our partner is strong standing and we are enthusiastic about the new opportunity resulting from our collaboration with system integrators throughout the global market we are operating in. And lastly, following the Advantage Goals position, we see an opportunity to expand our global P&C platform with underactive workbench and risk management capability and strengthen Sapiens' value proposition across global commercial specialty and London market segments. I will turn the call over to our CFO to provide more detail on our financial performance, Rony.