Sapiens International Corporation NV (SPNS) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation's Second 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 a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session.

女士們先生們，謝謝你們的支持。歡迎參加 Sapiens International Corporation 2024 年第二季財務業績電話會議。Sapiens 在今天早上開市前發布了一份新聞稿，並已發佈在該公司網站 www.sapiens.com 上。所有參與者目前都處於只聽模式。管理層正式發言後，將給予問答環節的指示。

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?

現在我想將電話轉給 Sapiens 首席行銷長兼投資者關係主管 Yaffa Cohen 女士。雅法，你想開始嗎？

Thank you, operator. I would like to welcome all of you to Sapiens conference call to review our second quarter 2021 results. With me on the call today are Mr. Roni Al-Dor, President and CEO; Mr. Roni Giladi, our CFO; and Mr. Alex Zuckerman, Chief Strategy Officer. Following the summary of the results, we will be available to answer any questions.

謝謝你，接線生。我歡迎大家參加 Sapiens 電話會議，回顧我們 2021 年第二季的表現。今天與我一起參加電話會議的是總裁兼執行長 Roni Al-Dor 先生； Roni Giladi 先生，我們的財務長；以及首席策略長 Alex Zuckerman 先生。在總結結果後，我們將可以回答任何問題。

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 the call. Sapiens expressly disclaim 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.

在開始之前，我想提醒大家，這次電話會議可能包含預測或其他前瞻性陳述。今天發布的新聞稿中的安全港條款也適用於通話內容。Sapiens 明確表示不承擔更新或修改任何這些前瞻性聲明的義務，無論是由於未來事件、新資訊、觀點或期望的變化還是其他原因。

On today's call, we will refer to 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 Roni Al-Dor, President and CEO of Sapiens. Roni?

在今天的電話會議上，我們將提及非公認會計準則財務指標。我們今天早上開市前發布的新聞稿中提供了 GAAP 與非 GAAP 業績的調整表。本次電話會議的重播將在電話會議結束後透過公司網站的投資者關係部分或透過網站連結進行，該連結可在我們今天發布的收益報告中找到。我會將電話轉給 Sapiens 總裁兼執行長 Roni Al-Dor。羅尼？

Thank you, Yaffa. Thank you for joining us today. Let's start by reviewing the second quarter results. Revenue totaled $137 million marking a 6.6% increase compared to last year, while operating profit reached $25 million, representing 18.2% of total revenue. This quarter showcase solid execution with North America deliver double digit growth and Europe delivering mid single digit growth. Our profitability performance was notable this quarter with an operating margin in the target range and a 13% growth in net income.

謝謝你，雅法。感謝您今天加入我們。讓我們先回顧一下第二季的業績。收入總計1.37億美元，較去年成長6.6%，營業利潤達2,500萬美元，佔總營收的18.2%。本季展現了堅實的執行力，北美實現了兩位數的成長，歐洲實現了中個位數的成長。本季我們的獲利表現引人注目，營業利潤率在目標範圍內，淨利潤成長 13%。

Before I discuss the business details, I would like to remind everyone of our 2024 priorities. The first is to transition our solution to SAS model with Sapiens Insurance Platform; and the second is to leverage our investment to drive performance in all of our key regions. Let me explain how we are doing this.

在討論業務細節之前，我想提醒大家我們 2024 年的優先事項。首先是透過 Sapiens Insurance Platform 將我們的解決方案轉換為 SAS 模型；第二是利用我們的投資來推動我們所有關鍵地區的表現。讓我解釋一下我們是如何做到這一點的。

Starting with Sapiens Insurance Platform, Sapiens recent collaboration with Microsoft and accelerate the use of AI in our platform, enhancing it with advanced GenAI capabilities and providing tailored unique solutions. I'm happy to share that our successful launch our intelligent insurance platform in the second quarter. a significant and exciting milestone for Sapiens.

從 Sapiens 保險平台開始，Sapiens 最近與 Microsoft 合作，加速人工智慧在我們平台中的使用，透過先進的 GenAI 功能增強平台並提供量身定制的獨特解決方案。我很高興與大家分享，我們在第二季成功推出了智慧保險平台。對智人來說，這是一個重要且令人興奮的里程碑。

The platform will present the next generation of our insurance solutions and use AI to help our customers drive growth and efficiency. It incorporates digital engagement, data intelligence, and core business process solution with machine learning and Gen-I capabilities. Designed to help insurers seamlessly innovate their offering and process, the platform enables them to stay competitive in a dynamic market with intelligent data-driven business decision and hyper automation of business process.

該平台將展示我們的下一代保險解決方案，並利用人工智慧來幫助我們的客戶推動成長和效率。它將數位參與、數據智慧和核心業務流程解決方案與機器學習和第一代功能相結合。該平台旨在幫助保險公司無縫創新其產品和流程，透過智慧數據驅動的業務決策和業務流程的高度自動化，使他們能夠在動態市場中保持競爭力。

For our customers, the platform's pre-integrated design ensures rapid deployment and seamless implementation, accelerating growth by supporting end-to-end insurance process across all lines of businesses. The platform is delivered throughout such a creation model with new deal structure and price accordingly.

對於我們的客戶來說，該平台的預先整合設計可確保快速部署和無縫實施，透過支援所有業務線的端到端保險流程來加速成長。該平台透過這樣的創建模型交付，並相應地提供新的交易結構和價格。

Pivoting now to our second priority for 2024. Let me highlight how we leverage our investment in all of our key regions to drive performance. In North America, our strategic investment in research and development, product innovation and employees together with our new partnership with system integrators have created a robust, effective platform to support our ambitious goals in this region.

現在轉向我們 2024 年的第二個優先事項。讓我強調一下我們如何利用我們在所有關鍵地區的投資來推動績效。在北美，我們在研發、產品創新和員工方面的策略性投資，加上我們與系統整合商的新合作夥伴關係，創建了一個強大、有效的平台，以支持我們在該地區實現雄心勃勃的目標。

The positive momentum in the life business continue. In the second quarter, we signed a new platform built with a leading life accident and health insurance company. The insurance carrier selected the Sapiens platform for life to modernize its platform, expand its TPA services, and enable it to scale quickly as it enters to a new market.

壽險業務持續向好勢頭。第二季度，我們與一家領先的人壽意外和健康保險公司簽署了一個新平台。該保險公司選擇 Sapiens 人壽平台來實現其平台現代化，擴展其 TPA 服務，並使其能夠在進入新市場時快速擴展。

The platform also enables the insurance to implement its long-term care insurance specialty. We are pleased to deliver the end-to-end solution the carrier was looking for and to accommodate its long-term care market needs. Additionally, our live solution had several North America go-live in the quarter including CoreSuite, IllustrationPro, UnderwritingPro, and we continue to progress with customer upgrades.

該平台還使保險公司能夠實施其長期護理保險專業。我們很高興為承運商提供所需的端到端解決方案，並滿足其長期照護市場的需求。此外，我們的即時解決方案已在本季度在北美多個地區上線，包括 CoreSuite、IllustrationPro、UnderwritingPro，我們將繼續推進客戶升級。

One of the go-live that we would like to highlight is Republic Life Insurance. This is a Caribbean, first digital direct to consumer insurer made possible by Sapiens CoreSuite for Life and Annuity and Sapiens DigitalSuite deployed on Microsoft Azure Cloud. Customers can acquire life insurance policies with point-of-sale decision and manage their policies throughout innovating customer portal, providing an enhancement, first-of-its-kind experience in this region.

我們要強調的上線之一是共和人壽保險。這是加勒比海地區第一家直接面向消費者的數位保險公司，由部署在 Microsoft Azure 雲端上的 Sapiens CoreSuite for Life and Annuity 和 Sapiens DigitalSuite 打造。客戶可以透過銷售點決策取得人壽保險保單，並透過創新的客戶入口網站管理其保單，從而提供該地區首創的增強體驗。

Also this quarter, Pan America Life Insurance Group, PALIG, went live with Sapiens IllustrationPro SaaS solution on Microsoft Azure Cloud. Sapiens empower PALIG to consolidate its enterprise illustration standard, streamline process, and extend product offering. After extensive competitor analysis, Pellig selected Sapiens to consolidate illustration and single platform and enable their insurance with a faster time to market within North America market itself.

同樣在本季度，Pan America Life Insurance Group (PALIG) 在 Microsoft Azure 雲端上啟用了 Sapiens IllustrationPro SaaS 解決方案。Sapiens 協助 PALIG 鞏固其企業插圖標準、簡化流程並擴展產品範圍。經過廣泛的競爭對手分析後，Pellig 選擇 Sapiens 來整合插圖和單一平台，並使其保險能夠更快地在北美市場上市。

Sapiens IllustrationPro will accelerate and streamline process providing an exceptional user and agent experience. In property and casualty, several North America projects went live this quarter, and we are progressing with customer upgrade. We continue to invest in our CoreSuite for MPL solutions to promote growth, innovation in the medical professional liability industry.

Sapiens IllustrationPro 將加速和簡化流程，提供卓越的使用者和代理體驗。在財產和傷亡方面，幾個北美項目本季投入使用，我們正在推動客戶升級。我們持續投資 CoreSuite for MPL 解決方案，以促進醫療專業責任產業的成長和創新。

By expanding and augmenting our MPL capability and product for policy administration, finance, claims and risk management, and seamless integration with value-added vendor solution, Sapiens meet the needs of MPL insurers in the rapidly consolidation MPL market.

透過擴展和增強我們在保單管理、財務、索賠和風險管理方面的 MPL 能力和產品，以及與增值供應商解決方案的無縫集成，Sapiens 滿足了 MPL 保險公司在快速整合的 MPL 市場中的需求。

We are proud of our leadership in MPL ecosystem and are committed to this market. Our advanced solution unburden insurers from complex business problems enable business user to take control of the process. We create a synergy between those two worlds, giving MPL insurers a clean bill of health to empower them to succeed.

我們為自己在 MPL 生態系統中的領導地位感到自豪，並致力於該市場。我們先進的解決方案減輕了保險公司複雜業務問題的負擔，使業務用戶能夠控制流程。我們在這兩個世界之間創造協同效應，為 MPL 保險公司提供乾淨的健康證明，幫助他們取得成功。

Our worker compensation team has made significant progress during the second quarter in implementing the three projects signed in 2023. As mentioned in our previous call, we see this market as a significant opportunity for Sapiens in the US and Canada in the years to come.

我們的工人薪酬團隊在第二季度在實施 2023 年簽署的三個項目方面取得了重大進展。正如我們在先前的電話會議中提到的，我們認為這個市場對美國和加拿大的智人來說是未來幾年的重大機會。

Moving to EMEA and rest of the world, we had a few successful go-live with our IDITSuite, TierSuite, SCIPSuite, and ReinsuranceMaster this quarter. I would like to highlight one of the largest, most complex P&C goal lives with Bangkok Insurance, BKI, a leading insurer in Thailand. BKI went live with Sapiens Property and Casualty Platform, including IDITSuite for P&C, ReinsuranceMaster, and Sapiens DataSuite.

轉向歐洲、中東和非洲以及世界其他地區，本季我們的 IDITSuite、TierSuite、SCIPSuite 和 ReinsuranceMaster 已成功上線。我想強調曼穀保險公司 (BKI) 最大、最複雜的財產和意外傷害目標之一，這是泰國領先的保險公司。BKI 與 Sapiens Property and Casualty Platform 一起上線，包括 IDITSuite for P&C、ReinsuranceMaster 和 Sapiens DataSuite。

We were chosen for our integration capability, end-to-end solution, and proven ability to meet regional regulations. Overall, we see continuous demand in the market for our P&C platform solution. AI is becoming a focus point in this market. We see generative AI model, the Sapient Insurance Platform can support the insurance value chain to provide customers in this region with a higher effectiveness and support achievements.

我們之所以被選中是因為我們的整合能力、端到端解決方案以及經過驗證的滿足地區法規的能力。總體而言，我們看到市場對我們的財產保險平台解決方案的持續需求。人工智慧正成為這個市場的焦點。我們看到生成式AI模型，Sapient保險平台可以支援保險價值鏈，為該地區的客戶提供更高的效率和支援成就。

We see an appetite for an insurance platform as an offering across all solution lines and tiers. The majority of our new business feeds are now SaaS platform-based. As we said in our previous call, digital over legacy is also a theme for Sapiens in the EMEA region. It's particularly effective for smaller carriers and tier organizations. Insurance in the EMEA region want the ability to roll out platforms in multiple countries which may have different languages, currencies, and regulations.

我們看到人們對保險平台作為跨所有解決方案線和層級的產品的興趣。我們的大多數新業務源現在都是基於 SaaS 平台的。正如我們在先前的電話會議中所說，數位超越遺產也是歐洲、中東和非洲地區智人的主題。它對於小型運營商和層級組織尤其有效。歐洲、中東和非洲地區的保險業希望能夠在可能有不同語言、貨幣和法規的多個國家推出平台。

With its global footprint, Sapiens has built this capability into its offering and is uniquely positioned to support clients in successful multi-country implementation. This capability is an important differentiator for us in EMEA.

憑藉其全球足跡，Sapiens 已將這種能力融入其產品中，並具有獨特的優勢來支持客戶成功進行多國實施。這種能力是我們在歐洲、中東和非洲地區的重要優勢。

The increased demand we have seen for our P&C platform in the various regions, including Europe, South Africa, and APAC is reflected in our growth for our pipeline in this market. In the live and pension space, demand is growing across EMEA and APAC, with increasing appetite for more business automation and AI-enabled solution to drag new business to market and improve services.

我們看到歐洲、南非和亞太地區等各個地區對財產險平台的需求不斷增加，這也反映在我們在該市場的產品線成長上。在生活和退休金領域，歐洲、中東和非洲和亞太地區的需求不斷增長，對更多業務自動化和人工智慧解決方案的需求不斷增加，以將新業務推向市場並改善服務。

We are seeing business channels wider to retail, white labeling, especially for bank assurers. We are seeing large life and pension players looking at platform transformation in group and individual investment, pension and annuity in addition to protection in the simpler line of business such as funerals. Those trends are reflected in the strengthening of our pipeline for our life and pension platform across Europe, South Africa, and APAC.

我們看到業務管道更廣泛地擴展到零售、白標，尤其是銀行保險公司。我們看到大型人壽和退休金參與者除了在葬禮等較簡單的業務領域提供保護外，還在考慮團體和個人投資、退休金和年金方面的平台轉型。這些趨勢反映在我們在歐洲、南非和亞太地區的人壽和退休金平台管道的加強。

In the reinsurance space, we also see a growing interest for platforms across EMEA, APAC, and North America to enable capacity and manage solvency as a business look to grow and diversify. Insurers face growing pressure to increase capital to sustain their operation, driven by reassessment of natural catastrophe risks due to climate change and recent surge in inflation rates, which elevate risk liability.

在再保險領域，我們也看到，隨著企業尋求發展和多元化，歐洲、中東和非洲、亞太地區和北美地區對平台的興趣日益濃厚，以提高容量並管理償付能力。由於氣候變遷導致的自然災害風險的重新評估以及近期通膨率的飆升，導致風險責任上升，保險公司面臨越來越大的增加資本以維持營運的壓力。

Accordingly, the demand for reinsurers is on the rise, creating a favorable market for reinsurers. The current trends we see in the reinsurance market are in the increase of reinsurance rate and cost for reinsurers and strict underwriting terms and conditions in reinsurance contract. Insurers must comply with the reinsurance requirement and, therefore, must adapt and fine-tune their underwriting guidelines and practices. and

因此，對再保險公司的需求不斷增加，為再保險公司創造了有利的市場。目前再保險市場的趨勢是再保險費率和再保險公司成本的增加以及再保險合約中嚴格的承保條款和條件。保險公司必須遵守再保險要求，因此必須調整和調整其承保指南和實務。和

Sapiens reinsurance solution enables reinsurance to automate and manage end-to-end programs, covering both seeded and assumed. Sapiens is the world's leading software vendor for reinsurance with over 100 customers using our insurance solutions.

Sapiens 再保險解決方案使再保險能夠自動化和管理端到端計劃，涵蓋種子計劃和假設計劃。Sapiens 是全球領先的再保險軟體供應商，擁有 100 多家客戶使用我們的保險解決方案。

Moving to our marketing activity, the second quarter is typically our event season. And this quarter we participate in 20 thresholds globally: 14 in North America, four in Europe, and two in APAC. We are encouraged by the feedback we received from trade show participants and the potential new businesses leads that we'll generate.

轉向我們的行銷活動，第二季通常是我們的活動季節。本季我們參與了全球 20 個門檻：北美 14 個、歐洲 4 個、亞太地區 2 個。我們對貿易展參與者的回饋以及我們將產生的潛在新業務線索感到鼓舞。

Our North America Client Summit is scheduled for September in Austin, Texas. We look forward to updating you on this exciting event at our next investor call.

我們的北美客戶高峰會定於 9 月在德克薩斯州奧斯汀舉行。我們期待在下次投資者電話會議上向您通報這一激動人心的事件的最新情況。

In conclusion, the second quarter demonstrates strong financial and operating performance marked by solid revenue growth and profitability. We are effectively executing our 2024 priorities, including transitioning to SAS model with Sapiens Insurance Platform, and leveraging our investment across key region.

總之，第二季展現了強勁的財務和營運業績，以穩健的收入成長和獲利能力為標誌。我們正在有效執行 2024 年的優先事項，包括透過 Sapiens Insurance Platform 過渡到 SAS 模式，並利用我們在關鍵地區的投資。

Our success in North America, our positive momentum in our life, pension, and annuity line of business, and our ongoing innovations in all of our product lines demonstrate our commitment to deliver innovative, comprehensive solution globally.

我們在北美的成功，我們在人壽、退休金和年金業務領域的積極勢頭，以及我們所有產品線的持續創新，都表明我們致力於在全球範圍內提供創新、全面的解決方案。

Now I would like to turn the call to Roni Giladi, our CFO. Roni?

現在我想把電話轉給我們的財務長羅尼·吉拉迪 (Roni Giladi)。羅尼？

Thank you, Roni. I will begin my commentary by reviewing the second quarter 2024 non-GAAP results, followed by comments on the balance sheet and cash flow. I will wrap up with our guidance for 2024. Revenue in the second quarter of 2024 was $137 million, an increase of 6.6% compared to $128 million in the second quarter of 2023.

謝謝你，羅尼。我將首先回顧 2024 年第二季非 GAAP 業績，然後對資產負債表和現金流量進行評論。最後我將介紹 2024 年的指導。2024年第二季營收為1.37億美元，較2023年第二季的1.28億美元成長6.6%。

On a constant currency basis, our revenue grew by 7.1%, reaching total revenue of $138 million. ARR for Q2 of 2024 total $169 million, reflecting growth of 12.1% compared to Q2 of 2023. We continue our journey of shifting revenue to subscription from recurring and non-recurring revenues.

以固定匯率計算，我們的營收成長了 7.1%，總營收達到 1.38 億美元。 ARR2024 年第二季總計 1.69 億美元，較 2023 年第二季成長 12.1%。我們繼續將收入從經常性和非經常性收入轉向訂閱的旅程。

Revenue mix. Revenue from recurring software product and reoccurring post-production services totalled $98 million compared to $83 million in the same quarter of last year. A $15 million increase, or 18.7% growth from Q2 of 2023.

收入組合。經常性軟體產品和經常性後製服務的收入總計 9,800 萬美元，而去年同期為 8,300 萬美元。增加 1500 萬美元，較 2023 年第二季成長 18.7%。

Geographic breakdown. Revenue in North America was $58 million, compared to $52 million in the comparable quarter, an increase of 11.1%, or $6 million. Revenue in Europe was $66 million, a year over year increase of 5%. On a constant currency basis, revenue in Europe grew by 6%, reaching $67 million.

地理細分。北美地區的營收為 5,800 萬美元，較去年同期的 5,200 萬美元成長 11.1%，即 600 萬美元。歐洲營收為 6,600 萬美元，年增 5%。以固定匯率計算，歐洲營收成長 6%，達到 6,700 萬美元。

Revenue in the rest of the world, which includes South Africa and APAC, was $13 million, a decrease of $0.5 million, or $2 million increase compared to previous quarter. Gross margin this quarter was 45.7% compared to 45.2% in Q2 of 2023, an increase of 50 basis points. This increase is steady improvement in the last several quarters and was mainly due to higher ratio of recurring and reoccurring revenue versus one-time revenue and increase in the offshore ratio by 1% to 52.2%. from overall company.

包括南非和亞太地區在內的世界其他地區的收入為 1,300 萬美元，比上一季減少 50 萬美元，增加 200 萬美元。本季毛利率為 45.7%，較 2023 年第二季的 45.2% 成長 50 個基點。這一成長在過去幾季中穩步改善，主要是由於經常性和經常性收入與一次性收入的比率較高，以及離岸比率增加了 1% 至 52.2%。從公司整體來看。

Profitability. Operating profit and margin in the second quarter of 2024 was $25 million and 18.2% of total revenue compared to $23 million and 18.2% in Q2 of 2023. Although gross margin improved, the operating margin remained at the same level due to strategic decision to increase our sales and marketing investment to further accelerate growth into 2025 and beyond, as mentioned earlier this year.

盈利能力。2024 年第二季的營業利潤和利潤率為 2,500 萬美元，佔總收入的 18.2%，而 2023 年第二季的營業利潤和利潤率為 2,300 萬美元，佔總收入的 18.2%。正如今年稍早所提到的，儘管毛利率有所改善，但由於我們增加銷售和行銷投資以進一步加速成長到 2025 年及以後的策略決策，營業利潤率仍保持在同一水平。

Net income attributed to Sapian shareholders for the second quarter of 2024 was $21 million, up 13.1% from $19 million in Q2 of 2023. Earning per diluted share was $0.37. for the second quarter of 2024. Up 12% from $0.33 cent for the second quarter of 2023. Turning to our balance sheet. As of June 30, 2024, we had cash in cash equivalent and short-term deposit totaling $186 million and debt of $40 million.

2024 年第二季歸屬於 Sapian 股東的淨利為 2,100 萬美元，比 2023 年第二季的 1,900 萬美元成長 13.1%。稀釋後每股收益為 0.37 美元。 2024 年第二季。較 2023 年第二季的 0.33 美分上漲 12%。轉向我們的資產負債表。截至2024年6月30日，我們的現金等價物及短期存款總計1.86億美元，債務為4,000萬美元。

On April 18, 2024, we paid cash dividend of $16 million or $0.28 per share for the second half of 2023. Adjusted free cash flow for the second quarter of 2024 was $6 million compared to $12 million in Q2 of 2023, mainly due to temporary time difference between revenue cognition and payment milestone. Also in this quarter, Maalot S&P Global, a part of the global rating firm Standard & Poor's financial services, has confirmed the long-term issue rating for Sapiens as AA- with stable outlook, while also confirming the rating for Sapiens (inaudible) venture as AA-. The rating confirmation reflects the ongoing confidence of the market and experts in Sapiens.

2024年4月18日，我們支付2023年下半年現金股利1,600萬美元，即每股0.28美元。2024 年第二季調整後自由現金流為 600 萬美元，而 2023 年第二季為 1,200 萬美元，這主要是由於收入認知和付款里程碑之間存在暫時的時間差異。同樣在本季度，全球評級公司標準普爾金融服務公司旗下的 Maalot S&P Global 確認 Sapiens 的長期發行評級為 AA-，展望穩定，同時也確認了 Sapiens（聽不清）風險投資公司的評級作為AA-。此次評級確認反映了市場和專家對 Sapiens 的持續信心。

Moving to our guidance, we are reiterating our 2024 guidance We expect non-GAAP revenue and operating margin in the range of $550 million to $555 million and 18.1% to 18.5% on profit, respectively. I will now turn the call back to Roni Al Dor. Roni?

轉向我們的指導，我們重申 2024 年指導，我們預計非 GAAP 收入和營業利潤率分別在 5.5 億至 5.55 億美元和 18.1% 至 18.5% 的利潤範圍內。現在我將把電話轉回羅尼·阿爾·多爾。羅尼？

Thank you, Roni. This quarter demonstrates solid execution highlighted by double-digit growth in North America and mid-single-digit growth in Europe. Our profitability performance was particularly impressive with our 13% growth in net income. Given our performance to date and the outlook for the remainder of the year, we remain confident in meeting our 2024 guidance. This ends our prepared remarks.

謝謝你，羅尼。本季展現穩健的執行力，北美地區實現兩位數成長，歐洲實現中個位數成長。我們的獲利表現尤其令人印象深刻，淨利潤成長了 13%。鑑於我們迄今為止的業績和今年剩餘時間的前景，我們仍然有信心達到 2024 年的指導目標。我們準備好的演講到此結束。

Operator, we are ready to open the call for q-and-a.

接線員，我們已準備好開始問答通話。

Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session.

謝謝。女士們、先生們，現在我們將開始問答環節。

(Operator instructions)

（操作員說明）

Dylan Becker of William Blair.

威廉布萊爾的迪倫貝克爾。

Hey gentlemen, nice job here. Maybe Roni, starting with you, you called out the Microsoft partnership, the intelligence insurance platform. Maybe, can you give us a sense of early receptivity, customer feedback, how they're looking to leverage that embedded intelligence in their core systems to drive better decisioning?

嘿先生們，幹得好。也許羅尼，從你開始，你提到了微軟的合作關係，即情報保險平台。也許，您能否讓我們了解早期的接受度、客戶回饋，以及他們如何利用核心系統中的嵌入式智慧來推動更好的決策？

And maybe Roni G, for you on the flip side of that, what this can mean for that broader business mix given some of the ongoing strength we've seen in post-production and ARR?

也許 Roni G，從另一方面來說，鑑於我們在後製和 ARR 方面看到的一些持續優勢，這對於更廣泛的業務組合意味著什麼？

Hi Dylan, with your permission I will ask Alex to answer about questions about Microsoft, okay?

你好，迪倫，如果你允許的話，我會請亞歷克斯回答有關微軟的問題，好嗎？

Of course, of course, yes.

當然，當然，是的。

Hi Dylan, this is Alex speaking. We have a strategic partnership with Microsoft around not only general AI, Gen-AI and other AI, but in general across the cloud and the Power BI as well. And as Roni mentioned, we released our intelligent platform The part of this intelligent platform is the massive usage of Gen-AI and algorithmic AI within the business processes.

嗨迪倫，我是亞歷克斯。我們與微軟建立了策略合作夥伴關係，不僅圍繞通用人工智慧、Gen-AI 和其他人工智慧，而且圍繞雲端和 Power BI 領域。正如 Roni 所提到的，我們發布了我們的智慧平台。

We see a tremendous interest in the market. We get really, really good feedback, both from our customer base and from the analyst community. And we're already running a POC with the customer in order to put the first of that into production. And the feedback so far is quite encouraging.

我們看到了市場的巨大興趣。我們從客戶群和分析師社群得到了非常非常好的回饋。我們已經與客戶一起運行 POC，以便將第一個專案投入生產。到目前為止的回饋非常令人鼓舞。

The market is very, very looking into how can Gen-AI be used to enhance efficiency and to provide better service to the customer.

市場非常非常關注如何利用 Gen-AI 來提高效率並為客戶提供更好的服務。

Thanks, Alex I will follow up regarding the second question. This is Roni G. Obviously the partnership with Microsoft is significant for Sapiens and also for our customers and prospects. We see this avenue first of all to bring new logo on board. Again, with the support of Microsoft, we feel more powerful when we are offering our product. So, additional new logo down the road. And, as Alex mentioned, we are doing conferences together with Microsoft globally.

謝謝，亞歷克斯，我將跟進第二個問題。我是 Roni G。我們首先看到這條途徑是為了引入新的標誌。同樣，在微軟的支持下，我們在提供產品時感到更強大。因此，未來還會有更多新標誌。而且，正如 Alex 所提到的，我們正在全球範圍內與 Microsoft 一起舉辦會議。

The second one is the existing customer base. As all of you know, we have today about 150 customers that are already in the cloud, but we have many others that we sold the product many years ago, and we'd like to transition them to the cloud in the coming years. This can generate additional revenue stream, which is recurring in nature, ARR, and accelerate the growth of this line.

第二個是現有的客戶群。眾所周知，我們現在有大約 150 個客戶已經在雲端中，但我們還有許多其他客戶是我們多年前銷售的產品，我們希望在未來幾年將他們遷移到雲端。這可以產生額外的收入流（本質上是經常性的 ARR），並加速該產品線的成長。

Obviously, we do not expect this to happen in one year or two years. This is a trend over the next five years, but can create significant revenue stream going forward. Significant.

顯然，我們預計這一情況不會在一兩年內發生。這是未來五年的趨勢，但可以在未來創造可觀的收入來源。重要的。

Okay, great. That's really helpful. Thank you both. Maybe going back to Roni A or maybe Roni G here, can you see North America revenue accelerate again? I know you guys have made some strong investments and a push there. Any type or sense of the types of wins that you're seeing here? Has that kind of shifted at all? Maybe what Microsoft can unlock in moving up market there, but the broader kind of pipeline transformation if you will in North America would be great.

好的，太好了。這真的很有幫助。謝謝你們倆。也許回到 Roni A 或 Roni G 這裡，你能看到北美收入再次加速嗎？我知道你們已經在那裡進行了一些強有力的投資和推動。您在這裡看到的勝利類型有什麼類型或感覺嗎？這種情況有改變嗎？也許微軟可以在北美的高端市場中釋放出什麼，但如果你願意的話，在北美進行更廣泛的管道轉型將是很棒的。

Yes, I will take it. As all of you know, in North America, we have almost five different types of business. Just to remind you, we have the life, including our CoreSuite and what we call component. And then we have on the P&C, we have our CoreSuite on the workers' comp. And then we have our decision management, and then we have the reinsurance.

是的，我會接受的。眾所周知，在北美，我們幾乎有五種不同類型的業務。只是提醒您，我們有生命，包括我們的 CoreSuite 和我們所說的組件。然後我們在 P&C 方面，我們在工人補償方面有 CoreSuite。然後我們有決策管理，然後我們有再保險。

So overall, we are continuing to grow on the life, very good on both component and CoreSuite. Workers comp, as we mentioned last year, we signed the three deals. We extended these deals, but we are looking further to new ones. And then Sapiens Reinsurance. So those are the areas that we see grow. The CoreSuite P&C is more stable right now. And so the overall, those are the areas that we are seeing huge growth.

總的來說，我們的生命力正在繼續增長，在組件和 CoreSuite 方面都非常好。工人補償，正如我們去年提到的，我們簽署了三份協議。我們延長了這些交易，但我們正在進一步尋找新的交易。然後是 Sapiens 再保險公司。這些是我們看到成長的領域。CoreSuite P&C 現在更加穩定。總的來說，這些是我們看到巨大成長的領域。

And just to remind all of you, in the CoreSuite life, we just brought them back in the last two to three years. And based on the contract that we signed and we plan to sign, it's a huge growth. And I think the combination that we are coming now with continued CoreSuite and the component plus all digital, and we are including on the platform, it looks very positive.

只是提醒大家，在 CoreSuite 生活中，我們只是在過去兩三年內將它們帶回來。根據我們簽署的和計劃簽署的合同，這是一個巨大的增長。我認為我們現在與持續的 CoreSuite 和組件加上所有數字的組合，以及我們包含在平台上的組合，看起來非常積極。

Kevin Kumar, Goldman Sachs.

凱文庫馬爾，高盛。

Hi, thanks for taking my questions. I wanted to ask about kind of the revenue segments and the trends you're seeing there. The pre-production revenue is continuing to kind of decline and you're seeing kind of strengthen the software post-production side. So, you know, maybe can you talk a little bit about kind of the drivers there of that and how do you think that kind of shakes out for the remainder of the year? That would be helpful. Thanks.

您好，感謝您回答我的問題。我想問一下您所看到的收入部門和趨勢。前期製作收入持續下降，而您會看到軟體後製方面有所加強。所以，你知道，也許你可以談談那裡的驅動因素，以及你認為今年剩餘時間這種情況會如何發展？那會有幫助的。謝謝。

Hi, Kevin, I will take this. This is Roni G. Yes, we can see this trend of implementation or pre-production implementation service slightly going down. If you remember, early in the year we announced that we are moving to subscription globally all products of the company. And the idea is a shift from two line items, one is from the implementation, the other one is from the reoccurring services, into the subscription revenue line.

嗨，凱文，我會接受這個。我是 Roni G。如果您還記得，今年年初我們宣布我們將在全球訂閱該公司的所有產品。這個想法是從兩個項目（一個是實施項目，另一個是重複服務項目）轉變為訂閱收入項目。

So obviously, this has impact also on the pre-production implementation services. And we see the trend of going up on the post-production services and software products. So this is one phenomena that impacts our revenue stream on that.

顯然，這也會對預生產實施服務產生影響。我們看到後製服務和軟體產品呈現上升趨勢。所以這是一個影響我們收入來源的現象。

The second one is we had some delay in signing new logo deals in early in the first half of the year. We are very encouraged on early Q3 of progressing significantly with prospective customer that will fulfill this revenue line item also.

第二個是我們在上半年簽署新標誌協議方面出現了一些延遲。我們對第三季初與潛在客戶的重大進展感到非常鼓舞，這些客戶也將實現這項收入項目。

Great, thank you for that. And then maybe one on just kind of where you're allocating new resources. Roni, I think you talked about increases in sales and marketing investments. What segments of the market do you see the most opportunity? Where are you allocating some of these new resources? Any color there would be helpful.

太好了，謝謝你。然後也許是關於你在哪裡分配新資源的問題。羅尼，我想您談到了銷售和行銷投資的增加。您認為哪些細分市場最有機會？您將這些新資源分配到哪裡？任何顏色都會有幫助。

Hi. Firstly, we already made the majority of the investment, so meaning hiring, organizing, management, and so on. So we are -- it took us time, but right now we are on board. And the majority is, first of all, we say it's in North America and in Europe. The challenge in Europe that we are -- because we are working in many territories and we have language issues and so on, so it's almost like a seven different regions, including South Africa and Asia.

你好。首先，我們已經進行了大部分投資，這意味著招募、組織、管理等等。所以我們——我們花了一些時間，但現在我們已經上船了。首先，我們說大多數是在北美和歐洲。我們在歐洲面臨的挑戰 - 因為我們在許多地區工作，並且有語言問題等等，所以它幾乎就像七個不同的地區，包括南非和亞洲。

So in terms of the investment, and I can say overall,we are doing it in all the segments in a marketing, gross marketing sales and also existing customers. In terms of alliances and SI, we hired, last year we hired a dedicated SI manager in North America. In the last half years, we hired the same position in Europe. So all the idea to start to work with alliances is we are putting also investment there.

因此，就投資而言，我可以說總體而言，我們正在行銷、總行銷銷售以及現有客戶的所有細分市場中進行投資。在聯盟和SI方面，我們聘請了去年我們在北美聘請了一位專門的SI經理。近半年，我們在歐洲聘請了同樣的職位。因此，開始與聯盟合作的所有想法都是我們也在其中進行投資。

Chris Reimer, Barclays.

克里斯·雷默，巴克萊銀行。

Hi, congratulations on the strong results and thanks for taking my questions. I was wondering if you could talk about how carriers today are prioritizing their large core system modernizations and if there's any one point that leads that decision making process? And then following on that, are you seeing any changes in timeline, sales timelines due to the transition or people who want to not transition -- anything about the timeline?

您好，祝賀您取得了優異的成績，並感謝您提出我的問題。我想知道您是否可以談談當今的運營商如何優先考慮其大型核心系統現代化，以及是否有任何一點可以引導這一決策過程？接下來，您是否看到時間表、銷售時間表因過渡或不想過渡的人而發生任何變化 - 關於時間表的任何變化？

This is Alex speaking. So in general, we keep seeing a high interest of carriers in core replacement. The main drivers are, first of all, operational efficiency especially in a volatile market financially-wise. Carriers are always looking to how can they improve their operation, reduce their operating costs, and be more efficient. This is beefed up a lot today with the capabilities of data management, including AI and digital capabilities and cloud capabilities, a lot of them in order to both drive operational efficiency and also growth in particular areas.

這是亞歷克斯的講話。因此，總的來說，我們一直看到運營商對核心更換抱有很高的興趣。主要驅動因素首先是營運效率，尤其是在財務方面波動的市場。營運商一直在尋求如何改善營運、降低營運成本並提高效率。如今，資料管理功能（包括人工智慧、數位功能和雲端功能）大大增強了這一點，其中許多功能都是為了提高營運效率和特定領域的成長。

The trend is still strong in terms of core replacement interest. Sometimes we see a bit longer times that the carriers take to perform their due diligence and be the processor especially in our case since we moved into a larger build with the platform. We're not selling only the core but actually selling a turnkey solution with digital, with data capabilities, with AI and the core together with our SaaS offering. So there's multiple aspects for them to review.

就核心更換興趣而言，趨勢仍然強勁。有時我們會看到營運商需要更長的時間來執行盡職調查並成為處理者，特別是在我們的案例中，因為我們進入了更大的平台建置。我們不僅銷售核心，而且實際上銷售具有數位、數據功能、人工智慧和核心以及我們的 SaaS 產品的統包解決方案。因此，他們需要審查多個方面。

It takes a bit more time sometimes in their review and analysis, but a strong trend of interest in core placement since legacy solutions are more and more prohibiting the business from going forward and from reducing its operating costs.

有時，他們的審查和分析需要花費更多的時間，但由於遺留解決方案越來越阻礙業務發展並降低其營運成本，因此對核心佈局產生了強烈的興趣。

So the sales cycle, you would say, it's still pretty long? One-and-a-half, two years?

那你會說銷售週期還是相當長嗎？一年半，兩年？

The sell cycle would move between, let's say, the nine months for smaller, maybe non-core deals of our different applications of digital to the area of 12 to 18 to 24 even months on the large core transformation. This is more or less not changing compared to the last year.

銷售週期將在不同數位應用的較小規模（可能是非核心）交易的 9 個月到大型核心轉型的 12 至 18 至 24 個月之間移動。與去年相比，這一點或多或少沒有變化。

(Operator instructions)

（操作員說明）

There are no further questions at this time. Before I ask Ms. Yaffa Cohen to go ahead with her closing statement, 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 972-3- 9255-938.

目前沒有其他問題。在我請雅法·科恩女士繼續她的結束語之前，我想提醒與會者，本次電話會議計劃在兩小時後開始重播。在美國，請致電 1-888-269-0005。在以色列，請致電 03-9255-938。國際電話請電 972-3-9255-938。

Ms. Cohen, would you like to make your concluding statement?

科恩女士，您願意做一下總結發言嗎？

Yes. Thank you, everyone, for joining our call today. We look forward to discussing our third quarter results on our next earning call. We welcome you to contact us if you have any further questions.

是的。謝謝大家今天加入我們的電話會議。我們期待在下一次財報電話會議上討論我們的第三季業績。如果您還有任何疑問，歡迎您與我們聯絡。

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

謝謝。Sapiens International Corporation 2024 年第二季業績電話會議至此結束。感謝您的參與。您可以繼續並斷開連線。