Sapiens International Corporation NV (SPNS) 2021 Q1 法說會逐字稿

Welcome to Sapiens International Corporation's 2021 First Quarter Results Call. (Operator Instructions) As a reminder, this conference is being recorded May 4, 2021. It is now my pleasure to introduce your host, Daphna Golden, Sapiens VP, Head of Investor Relations. Daphna, you may now begin.

歡迎參加 Sapiens International Corporation 2021 年第一季業績電話會議。 （操作員指示）溫馨提示：本次會議將於 2021 年 5 月 4 日錄製。現在，我很高興介紹主持人 Daphna Golden，Sapiens 副總裁兼投資者關係主管。 Daphna，現在您可以開始了。

Thank you, and good day, everyone. Our earnings release was issued before the market opened this morning and was posted on the company's website at www.sapiens.com. Here with me today representing Sapiens are Roni Al-Dor, President and CEO; and Roni Giladi, CFO.

謝謝大家，大家好！我們的財報已於今天上午開市前發布，並已發佈在公司網站 www.sapiens.com 上。今天與我一同代表 Sapiens 出席的還有總裁兼執行長 Roni Al-Dor 和財務長 Roni Giladi。

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 disclaims 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本次電話會議的內容。 Sapiens 明確表示不承擔任何更新或修改任何此類前瞻性陳述的義務，無論其原因包括未來事件、新資訊、觀點或預期的變更或其他原因。

On today's call, we will refer to the non-GAAP financial measures. A reconciliation schedule showing GAAP versus 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 1 business day 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.

在今天的電話會議上，我們將參考非公認會計準則 (Non-GAAP) 財務指標。我們已在今早開市前發布的新聞稿中提供了一份對比表，其中列出了公認會計準則 (GAAP) 和非公認會計準則 (Non-GAAP) 業績。本次電話會議的重播將於電話會議結束後一個工作日在公司網站的「投資者關係」板塊或透過我們今天發布的財報中的網站連結提供。

I will turn the call over to Roni Al-Dor, President and CEO of Sapiens. Roni?

我將把電話轉給 Sapiens 總裁兼執行長 Roni Al-Dor。 Roni？

Thank you, Daphna, and hello to everyone joining us today to review Sapiens' First Quarter 2021 Financial Results. I will review highlights from the quarter 1 results and provide an overview of our achievements. Our CFO, Roni Giladi, will discuss the financial and the outlook for 2021.

謝謝 Daphna，也感謝今天與我們一同回顧 Sapiens 2021 年第一季財務表現的各位。我將回顧第一季業績的亮點，並概述我們的成就。我們的財務長 Roni Giladi 將討論 2021 年的財務狀況和展望。

Quarter 1 was a good start to the year. The strong revenue shows our continued focus on the execution of our growth strategy, which contains several pillars: first, to establish long-term customer relationships with the best solution to serve their need and to support their digital transformation initiative; second, to grow our business in our key geographics with our land-and-expand strategy to gain market coverage and become closer with our customers; and third, invest in our products to maintain our market leadership position and competitive advantage.

第一季取得了良好的開局。強勁的營收體現了我們持續專注於執行成長策略，該策略包含以下幾個支柱：首先，透過最佳解決方案與客戶建立長期關係，滿足他們的需求並支持他們的數位轉型計畫；其次，透過「落地並擴張」策略，在關鍵地區拓展業務，擴大市場覆蓋範圍，拉近與客戶的距離；第三，投資於我們的產品，以保持我們的領導地位和競爭。

In quarter 1, revenue climbed once again, reaching a record of $110 million, 22% higher than last year. This achievement delivered a 30% increase in operating income, which operating margin reached 17.2%, up from 16.1% last year. Sapiens is a global company operating across multiple insurance markets and deploying a diversified product offering. This strategy allows us to balance our growth, resource, investment and risk across regions and markets.

第一季度，營收再次攀升，達到創紀錄的1.1億美元，較去年同期成長22%。此業績推動營業收入成長30%，營業利益率達17.2%，高於去年的16.1%。 Sapiens是一家全球性公司，業務遍及多個保險市場，並部署多元化的產品組合。這項策略使我們能夠平衡跨地區和市場的成長、資源、投資和風險。

Over the past quarter, we continued to experience strong industry demand of our core and digital offering globally. In North America, we have grown our business in recent years, from strategic M&A and organic growth, including investment in the integration and R&D. In the Life & Annuity space in North America, we are starting to see growth in our pipeline for CoreSuite Life & Annuities.

在過去一個季度，我們的核心及數位化產品在全球範圍內持續獲得產業強勁需求。近年來，我們在北美的業務成長主要體現在策略併購和有機成長，包括對整合和研發的投資。在北美的壽險及年金領域，CoreSuite 壽險及年金產品線也開始成長。

To support this pipeline into 2022, we are initiating a partnership program with the leading system integrators towards such projects. Our Life components continue to demonstrate growth year-over-year in the market. Our insurance offerings, which include ReinsurancePro and GO, continue to grow, and ReinsuranceMaster continues to attract interest from top-tier carriers in North America and globally.

為了支援這些產品線進入2022年，我們正在與領先的系統整合商啟動一項合作計劃，以推進此類專案。我們的人壽保險產品在市場上持續呈現逐年成長。我們的保險產品（包括ReinsurancePro和GO）持續成長，而ReinsuranceMaster也持續吸引北美乃至全球頂級保險公司的注意。

On the CoreSuite P&C front, we have experienced rapid growth in the recent years. Delivering multiple transformation projects require substantial resource and knowledge. The CoreSuite P&C business is facing growing pains, which resulted in delivery challenges. We are currently increasing resource in order to support existing transformation projects as well as new business towards the end of the year.

在CoreSuite P&C業務方面，我們近年來經歷了快速成長。交付多個轉型專案需要大量的資源和知識。 CoreSuite P&C業務正面臨成長的陣痛，這導致了交付方面的挑戰。我們目前正在增加資源，以支持現有的轉型項目以及年底前的新業務。

In parallel, we are executing a plan to carefully manage and control the growth. To advance our growth in North America, I'm excited to welcome Jamie Yoder, who joined us last week as the President and General Manager of our North America business. Jamie will have overall responsibility for all of our end-to-end business in this region. Jamie brings extensive leadership experience in both P&C and Life, including launching SaaS and cloud-native businesses and holding senior positions with global insurance system integrators.

同時，我們正在實施一項計劃，以謹慎地管理和控製成長。為了推動我們在北美地區的成長，我很高興歡迎 Jamie Yoder 加入，他上週加入我們，擔任北美業務總裁兼總經理。傑米將全面負責我們在該地區的所有端到端業務。傑米在財產險和人壽保險領域擁有豐富的領導經驗，包括推出 SaaS 和雲端原生業務，以及在全球保險系統整合商中擔任高階職位。

Most recently, Jamie was President of Snapsheet, a leading technology innovator in the insurance claims space. Before that, he was the Insurance Advisory Leader for PwC, both in the U.S. and globally, advising clients across P&C and Life on the management and transformation initiatives. Before PwC, Jamie also led the Insurance Practice and served on the Management Committee at Diamond Management & Technology Consultants, which PwC acquired in 2010.

Jamie 最近擔任 Snapsheet 總裁，該公司是保險理賠領域的領先技術創新者。在此之前，他曾擔任普華永道美國及全球保險諮詢主管，為財產險和人壽保險領域的客戶提供管理和轉型方面的諮詢服務。在加入普華永道之前，Jamie 也曾領導 Diamond Management & Technology Consultants 的保險業務，並擔任該公司管理委員會成員。該公司於 2010 年被普華永道收購。

A key objective for Sapiens is to further increase our presence in this region, build strong customer relationships and expand our market share. We are confident that Jamie's experience in large-scale transformations, along with his relationship with the top-tier insurance carriers and system integrators, will be an asset for Sapiens. His insurance expertise can significantly contribute to our road map and direction. While our model remains one-hand-to-shake, we also aim to expand our partnerships with system integrators as per market demand. I'm confident that we will resume growth in North America towards the end of 2021.

Sapiens 的一個關鍵目標是進一步提升我們在該地區的業務，建立穩固的客戶關係並擴大我們的市場份額。我們相信，Jamie 在大規模轉型方面的經驗，以及他與頂級保險公司和系統整合商的關係，將成為 Sapiens 的寶貴資產。他的保險專業知識將對我們的發展路線圖和方向做出重大貢獻。雖然我們的模式仍然是「一握手」模式，但我們也計劃根據市場需求擴大與系統整合商的合作夥伴關係。我相信，我們將在 2021 年底恢復北美地區的成長。

Moving now to European markets. Our investment in Europe over the last several years is paying off, both in our market presence and our product portfolio position. We have achieved year-over-year revenue growth across the board, and the pipeline is robust. We entered the year with positive momentum in all European markets we are currently operating in and have delivered strong results. Our acquisition in Iberian and DACH region have already achieved strong results, helping us execute our land-and-expand strategy and accelerate our growth in these high-potential markets.

現在轉向歐洲市場。過去幾年，我們在歐洲的投資正在取得回報，無論是市場佔有率還是產品組合地位都得到了提升。我們實現了全面營收年增，產品線也十分強勁。今年，我們在所有目前營運的歐洲市場都保持了良好的發展勢頭，並取得了強勁的業績。我們在伊比利亞半島和德國、奧地利和瑞士地區的收購已經取得了顯著成效，這幫助我們實施「落地並擴張」策略，並加速了我們在這些高潛力市場的成長。

With TIA, our most recent acquisition, we are investing to fully integrate the company's R&D, professional services, sales and operations into Sapiens. The added value we offer to the 70 customers that join Sapiens with the acquisition includes our broad digital and data offering and managed services. TIA increases our market presence and deep knowledge in this region. I am pleased to share that we already see tremendous synergies between the companies. This has resulted in new cross-sell and upsell business in future opportunities.

我們最近收購了TIA，並正在投資將其研發、專業服務、銷售和營運業務全面整合到Sapiens。此次收購將為加入Sapiens的70位客戶提供附加價值，包括我們廣泛的數位和數據產品以及託管服務。 TIA提升了我們在該地區的市場影響力和深度認知。我很高興地告訴大家，我們已經看到了兩家公司之間巨大的協同效應，這為未來新的交叉銷售和追加銷售業務帶來了機會。

Looking at the Rest-of-the-World, APAC and South Africa are showing positive momentum, and we continue to expand our business, offering our customers in the region additional value and exploring new opportunities. Since TIA has a strong presence also in South Africa, we benefit from the acquisition in the region as well. In 2 weeks, we are hosting our 2021 virtual European and Rest-of-the-World customer event. I'm looking forward to this event in which we will host many new customers that have joined us in the last 2 years, including those that became part of the Sapiens family through acquisitions.

放眼世界其他地區，亞太地區和南非市場呈現正面勢頭，我們持續拓展業務，為該地區的客戶提供更多價值，並探索新的機會。由於TIA在南非也擁有強大的影響力，我們也將從此次收購中受益。兩週後，我們將舉辦2021年歐洲及世界其他地區線上客戶活動。我非常期待這場活動，屆時我們將迎來許多在過去兩年中加入我們的新客戶，包括那些透過收購成為Sapiens大家庭一員的客戶。

In summary, our quarter 1 solid results validate our strategy of building global diversity with a broad business portfolio to provide the foundation to Sapiens' continued performance and growth across the various regions and market segments we're operating in. The global Sapiens team has delivered new wins and upsells. Let me share with you some of the wins we have announced during the quarter.

總而言之，我們第一季的穩健業績驗證了我們建立全球多元化策略，並透過廣泛的業務組合為Sapiens在各個地區和細分市場的持續業績和成長奠定了基礎。 Sapiens的全球團隊取得了新的成果和銷售成長。讓我與大家分享我們在本季宣布的一些成果。

A Tier 1 South African financial services institution and existing Life & Annuity customer of Sapiens chose to expand its relationship with us. The customer, which offers banking and insurance services, has selected Sapiens' IDITSuite for Property & Casualty to support its personal and commercial lines of the business. This is just one example of demand, mainly by large carriers, for a solution for both P&C and Life, positions Sapiens with a significant advantage in the market.

南非一家一級金融服務機構，同時也是 Sapiens 現有的壽險和年金客戶，選擇拓展與我們的業務關係。該客戶提供銀行和保險服務，並已選擇 Sapiens 的財產和意外險 IDITSuite 來支援其個人和商業業務。這只是一個例證，主要來自大型保險公司對財產和意外險及壽險解決方案的需求，這使得 Sapiens 在市場上佔據了顯著優勢。

U.S.-based Clear Blue Insurance Group has also selected Sapiens' ReinsurancePro in quarter 1. ReinsurancePro was created and designed for the reinsurance needs for P&C carriers. This product gives Clear Blue a strong platform to manage complex reinsurance transactions and quickly respond to new reinsurance needs.

總部位於美國的 Clear Blue 保險集團也在第一季選擇了 Sapiens 的 ReinsurancePro。 ReinsurancePro 專為滿足財產和意外傷害保險公司的再保險需求而設計。該產品為 Clear Blue 提供了一個強大的平台，能夠管理複雜的再保險交易，並快速回應新的再保險需求。

On the Life side, we expanded our partnership with Atos to deliver transformational Life & Pension business process outsourcing services to one of its customers. Atos is one of the largest system integrators in Europe. Their selection of Sapiens' Life solution, which fully integrated to a wide range of Atos' digital BI and customer experience services, validate our leadership position.

在人壽保險方面，我們拓展了與Atos的合作，為其一家客戶提供轉型人壽和退休金業務流程外包服務。 Atos是歐洲最大的系統整合商之一。他們選擇Sapiens的人壽解決方案，該解決方案與Atos廣泛的數位商業智慧和客戶體驗服務完全集成，這鞏固了我們的領導地位。

This leads me to the product front. Sapiens' focus on R&D investment delivers consistent returns and provide product distinction and competitive edge. The growing interest in our Life offerings, supported by prestigious industry awards that we won in late 2020, is reflected in strong bookings expected to translate to revenue in the coming quarters.

這讓我想到了產品方面。 Sapiens 對研發投入的重視帶來了持續的回報，並帶來了產品的獨特性和競爭優勢。由於我們在 2020 年底榮獲的多項行業大獎，人們對我們 Life 產品的興趣日益濃厚，這體現在強勁的預訂量上，預計將在未來幾季轉化為收入。

We released a new version of our CoreSuite for Life & Annuities last month. This latest version takes the cloud-based open architecture one step further. It features an enhanced library of pre-configured life insurance products, built-in digital and analytics and low code/no code tools, empowering users to tailor and launch new products rapidly. These enhancements ensure faster implementation, rapid go-to-market for our customers and even greater sales efficiency.

我們上個月發布了新版 CoreSuite for Life & Annuities。最新版本進一步提升了基於雲端的開放式架構。它包含增強的預配置人壽保險產品庫、內建數位和分析功能以及低程式碼/無程式碼工具，使用戶能夠快速自訂和發布新產品。這些增強功能確保了更快的實施速度、客戶快速上市，並提高了銷售效率。

We continue to see strong and growing interest in our IDITSuite for P&C across EMEA and APAC. This includes interest in IDITSuite as a stand-alone as well as in combination with our Digital suite and Sapiens intelligence, including the managed services and cloud deployment approach. We also see increasing interest in our recently launched proposition of IDIT Go, designed to serve the lower tiers and greenfield insurers.

我們持續關注歐洲、中東和非洲地區以及亞太地區客戶對我們以財產險和意外險的 IDITSuite 解決方案的興趣，而這種興趣日益增長。這包括對 IDITSuite 的獨立使用，以及與我們的數位套件和 Sapiens 智慧系統（包括託管服務和雲端部署方法）相結合的興趣。此外，我們還發現客戶對我們近期推出的 IDIT Go 方案的興趣日益濃厚，該方案旨在服務低階市場和新建保險公司。

Our portfolio continues to win recognition. In February 2021, IDITSuite received the XCelent Award for the breadth of functionality for the P&C Policy Administration System in EMEA. In March 2021, XCelent chose our client, Hiscox Insurance Group, for the Model Insurance Award in recognition of the business value they gain through the deployment of Sapiens' DECISION on top of IDITSuite. Sapiens' DECISION is now driving Hiscox' U.K. rule-based decision-making and customer journeys for claims.

我們的產品組合持續獲得認可。 2021年2月，IDITSuite以其在歐洲、中東和非洲地區（EMEA）的財產保險保單管理系統（P&C Policy Administration System）的廣泛功能榮獲XCelent獎。 2021年3月，XCelent授予我們的客戶Hiscox保險集團“典範保險獎”，以表彰其透過在IDITSuite上部署Sapiens的DECISION系統所獲得的商業價值。 Sapiens的DECISION系統目前正在驅動Hiscox在英國基於規則的決策和理賠客戶旅程。

This is an excellent example of a customer that is originally deploying one of our products, in this case, the Sapiens P&C IDITSuite for its core system, later to be followed by the very successful deployment of DECISION to enhance their digital transformation. Our digital solutions are attracting higher demand as the market evolves, and we continue to advance the functionality of our digital offering.

這是一個絕佳的例子，客戶最初部署了我們的一款產品，例如 Sapiens P&C IDITSuite 作為其核心系統，之後又成功部署了 DECISION，以增強其數位轉型。隨著市場的發展，我們的數位化解決方案需求日益增長，我們也持續改進數位化產品的功能。

We have recently announced a new version of our Digital suite. This cloud-native modular solution empowers insurance to leverage digital opportunities and enhance customer engagement. Our Digital suite can be deployed together with Sapiens' core products to provide the full digital experience. It can also be deployed as a stand-alone suite over the legacy or other core products. We continue to see strong traction for our cloud-based and managed services proposition across Life, P&C and Digital.

我們近期發布了全新版本的數位化套件。這款雲端原生模組化解決方案協助保險公司掌握數位機遇，提升客戶參與度。我們的數位化套件可以與 Sapiens 的核心產品一同部署，提供全方位的數位體驗。它也可以作為獨立套件，獨立於原有產品或其他核心產品之上部署。我們持續關注基於雲端的託管服務在人壽、財產及意外和數位化領域的發展，並持續獲得強勁成長。

Most of the deals signed over the last 18 months include cloud deployment and managed services. I'm happy to share that our customers keep providing positive feedback, recognizing the high level of services we offer them. Another area we continue to focus on is our partner, InsureTech Ecosystems. Our platform features open API capabilities, enabling our customer to enjoy a seamless integration with additional solutions.

過去18個月簽署的大部分協議都涉及雲端部署和託管服務。我很高興地告訴大家，我們的客戶持續提供正面的回饋，認可我們提供的高水準服務。我們持續關注的另一個領域是我們的合作夥伴InsureTech Ecosystems。我們的平台具有開放的API功能，使我們的客戶能夠與其他解決方案無縫整合。

We recently announced a partnership with Atidot to offer AI-based predictive insights and personalization to life insurance providers. The partnership creates new ways for insurers to generate revenue through analytics and actionable insights. We also announced a new partnership with ECHO to offer a complete digital payment solution for insurance carriers. Our integrated offering will empower insurers to achieve immediate total electronic adoption, ensuring payment efficiency with minimal IT requirements. Together with Sapiens' core solutions, ECHO's payment processing solution will enable carriers to eliminate complex manual payment processes.

我們近期宣布與 Atidot 建立合作夥伴關係，為人壽保險提供者提供基於人工智慧的預測洞察和個人化服務。此次合作將為保險公司創造新的獲利途徑，使其能夠透過分析和切實可行的洞察來創造收入。我們也宣布與 ECHO 建立新的合作夥伴關係，為保險公司提供完整的數位支付解決方案。我們的整合解決方案將助力保險公司立即實現全面電子化，以最低的 IT 要求確保支付效率。 ECHO 的支付處理解決方案與 Sapiens 的核心解決方案相結合，將幫助保險公司消除複雜的手動支付流程。

We also partnered with Rising Medical to simplify processes, reduce cost for workers' compensation and property and casualty carriers. Our diversified portfolio and market presence continue to allow Sapiens to enjoy the different trends in the various markets and at the same time, to mitigate risk across the board.

我們也與Rising Medical合作，簡化流程，降低工傷賠償和財產及意外險承保人的成本。我們多元化的產品組合和市場佈局，使Sapiens能夠持續掌握不同市場的不同趨勢，同時全面降低風險。

Looking ahead to 2021. Since the outbreak of COVID-19, Sapiens has been dedicated to business continuity and mitigating the pandemic impact on the company while maintaining our growth momentum. Life is returning to normal in many of the regions in which we operate. Yet, in the last few weeks, the pandemic in India has increased substantially, impacting about 8% of Sapiens' employees in India. The rest of the employees in India continue to work remotely without disruption. We are currently working on initiatives to mitigate potential risk while keeping our recruitment plans in India intact. This plan also includes expanding our partnerships with system integrators, recruiting from other regions and potentially shifting resources from R&D.

展望2021年。自新冠疫情爆發以來，Sapiens一直致力於保持業務連續性，在保持成長勢頭的同時，努力減輕疫情對公司的影響。我們經營的許多地區的生活正在恢復正常。然而，在過去幾週，印度疫情大幅蔓延，約8%的Sapiens印度員工受到影響。其餘印度員工仍在遠距辦公，工作仍在正常進行。我們目前正在製定措施，在保持印度招聘計劃不變的同時，降低潛在風險。該計劃還包括擴大與系統整合商的合作夥伴關係，從其他地區招募員工，並可能將研發資源從現有資源中轉移出來。

While the situation obviously has impacts on our short-term outlook, Sapiens is committed to balancing our business responsibility with the personal health and well-being of our employees. To summarize our achievements and trends in the various markets Sapiens operates in, the demand in the P&C market is expected to continue in all regions. In EMEA and Rest-of-the-World, we have already expanded our presence to meet the growing demand. In North America, we are scaling up our delivery capabilities. Our Insurance platform continued to gain momentum, mainly with large carriers. In the Life & Annuities market, we see growing demand for our platform, supported by recent wins, a solid pipeline and continued analyst recognition. In addition, we also see growing demand for multiple lines of business across both Life and P&C, which makes Sapiens the vendor of choice.

雖然疫情顯然會對我們的短期前景產生影響，但 Sapiens 致力於在我們的商業責任與員工的個人健康和福祉之間取得平衡。總結我們在 Sapiens 營運的各個市場中取得的成就和趨勢，預計所有地區的財產和意外保險市場需求都將持續成長。在歐洲、中東和非洲地區以及世界其他地區，我們已經擴大了業務範圍，以滿足不斷增長的需求。在北美，我們正在提升交付能力。我們的保險平台持續獲得發展勢頭，主要客戶是大型保險公司。在人壽和年金市場，我們看到對我們平台的需求不斷增長，這得益於近期的勝利、穩固的銷售管道和分析師的持續認可。此外，我們還看到對人壽和財產和意外傷害保險多個業務線的需求不斷增長，這使得 Sapiens 成為首選供應商。

In addition, multinational carriers recognize Sapiens' added value as a global player. I am proud of the successes we continue to demonstrate from our organic growth, complemented by strong results from our investment in Iberia, DACH, the Nordics and South Africa. With over 600 global customers, Sapiens is making a significant impact with our broad portfolio of solutions and one-hand-to-shake business model. With nearly 4,000 of the industry's most-talented employees spread globally, we have all the tools in place to continue to grow. The disruptors of COVID-19 and the rapidly industry shift to digital are driving insurers to speed up their digital transformation projects. We are looking ahead to land new customers and expand existing customer business.

此外，跨國保險公司也認可Sapiens作為全球性參與者的附加價值。我為我們持續展現的有機成長成果感到自豪，這得益於我們在西班牙國家航空、德奧瑞地區、北歐和南非地區投資的強勁業績。 Sapiens擁有超過600家全球客戶，憑藉其廣泛的解決方案組合和「一握手」式業務模式，正在產生深遠的影響。我們擁有近4,000名遍佈全球的業界頂尖員工，並擁有持續成長所需的所有工具。新冠疫情的衝擊和產業向數位化的快速轉變，正在推動保險公司加速數位轉型專案。我們期待吸引新客戶並拓展現有客戶業務。

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 Roni Giladi，Roni？

Thank you, Roni. I will begin my commentary with the review of the first quarter 2021 non-GAAP results. All comparisons are year-over-year versus Q1 of 2020, unless otherwise stated. This will be followed by comments on the balance sheet and cash flow. I will wrap up with an update of our 2021 outlook.

謝謝，Roni。我的評論首先會回顧一下2021年第一季的非GAAP業績。除非另有說明，所有比較數據均為與2020年第一季的年比數據。之後，我會對資產負債表和現金流進行評論。最後，我會更新一下我們2021年的展望。

Revenue in the first quarter of 2021 increased to $110.2 million, up 21.7% from the first quarter of 2020. Our revenue in North America reached $44.8 million, similar to last year. During Q4 of 2020, we successfully completed the go-live of a large transformation implementation which resulted in low revenue in Q1 of 2021. An additional effect on the Q1 year-over-year was the negative impact of COVID-19 on our worker compensation business, which is highly correlated to employment rates. And as Roni already mentioned, the delivery challenges in the CoreSuite P&C North America impacted Q1 revenue.

2021年第一季營收增至1.102億美元，較2020年第一季成長21.7%。我們在北美地區的營收達到4,480萬美元，與去年持平。 2020年第四季度，我們成功完成了一項大型轉型專案的上線，這導致2021年第一季營收較低。新冠疫情對我們與就業率高度相關的員工薪資業務的負面影響也對第一季的收入產生了負面影響。正如Roni先前提到的，CoreSuite北美P&C業務的交付挑戰也影響了第一季的營收。

I would like to reiterate that with the clear plan in place, we anticipate returning to growth in the region towards the end of 2021. Revenue in Europe reached a record $57.7 million, up 43.3% driven by a combination of organic growth and M&A. As a reminder, this was the first full quarter contribution from TIA to our results. To complete the revenue growth picture, our revenue in Rest-of-the-World, South Africa and APAC reached $7.8 million, 36% higher than last year.

我想重申，憑藉清晰的計劃，我們預計該地區將在2021年底恢復成長。歐洲地區營收達到創紀錄的5,770萬美元，成長43.3%，這主要得益於有機成長和併購的推動。需要提醒的是，這是TIA首次為我們業績做出完整貢獻的季度。此外，我們在世界其他地區、南非和亞太地區的營收達到780萬美元，比去年成長了36%。

Moving to gross profit. Gross profit in Q1 of 2021 was $49.2 million, up from $39.8 million in Q1 of last year. Our gross margin this quarter increased by 70 basis points to 44.7% from 44% in Q1 of 2020. Operating profit this quarter was $19 million, a 30% increase from $14.6 million in Q1 of 2020 and slightly higher than the $18.7 million recorded in Q4 of 2020.

再來說說毛利。 2021年第一季毛利為4,920萬美元，高於去年第一季的3,980萬美元。本季毛利率從2020年第一季的44%上升至44.7%，成長了70個基點。本季營業利潤為1,900萬美元，較2020年第一季的1,460萬美元成長30%，略高於2020年第四季的1,870萬美元。

Operating margin rose by 110 basis points to 17.2%, from 16.1% of last year. This year-over-year increase in operating margin was achieved despite the fact that R&D and SG&A were about $5 million higher. Additionally, as I shared last quarter, TIA profitability is lower than Sapiens. Since this was the first quarter in which TIA was consolidated on a full quarter basis, its impact on profitability was higher than our Q4 of 2020 results. TIA profitability is expected to improve towards the end of the year.

營業利益率從去年的16.1%上升了110個基點，達到17.2%。儘管研發費用和銷售、行政及管理費用增加了約500萬美元，但營業利潤率仍實現了同比增長。此外，正如我上個季度所述，TIA的獲利能力低於Sapiens。由於這是TIA首次按季度合併，因此其對獲利能力的影響高於我們2020年第四季的業績。預計TIA的獲利能力將在年底前有所改善。

Interest expenses in Q1 of 2021, on debenture, was $0.8 million and will continue throughout the year. It was offset by income from hedging transactions, which lowered interest costs incurred in Q1 of 2021. Total interest expenses for the quarter were $0.5 million. Net income attributable to Sapiens shareholders for the quarter was $14.9 million, up 43.2% from the $10.4 million net income in Q1 of 2020.

2021年第一季債券利息支出為80萬美元，並將持續全年。對沖交易收入抵消了這筆支出，從而降低了2021年第一季的利息成本。本季總利息支出為50萬美元。本季歸屬於Sapiens股東的淨利為1,490萬美元，較2020年第一季的1,040萬美元成長43.2%。

EPS for the quarter was $0.27 per diluted share, up from $0.20 per diluted share in the first quarter of last year, reflecting a 35% increase. Please note that EPS reflects the full share count following the public offering we have completed in Q4.

本季每股收益為0.27美元（稀釋後），高於去年第一季的0.20美元，增幅達35%。請注意，每股收益反映了我們在第四季度完成公開發行後的全部股份數量。

Turning to our balance sheet. As of March 31, 2021, we had cash and cash equivalents and short-term deposits totaling $172.2 million. Total debt stood at $101 million, reflecting the $20 million debenture payment in the first quarter of 2021. The debt term is 5 years, and it will be paid in equal installments until January 1, 2026.

回顧我們的資產負債表。截至2021年3月31日，我們的現金、現金等價物及短期存款總額為1.722億美元。總債務為1.01億美元，反映了2021年第一季2000萬美元的債券償還。債務期限為5年，將分期償還，直至2026年1月1日。

Touching up on adjusted free cash flow. In the first quarter of 2021, we reached an adjusted free cash flow of $10.6 million, a 135% increase from Q1 of 2020. In addition, we recently announced a cash dividend of $0.37 per share, which amounted to $20.2 million. This year, we returned to our normal pre-COVID distribution rate of up to 40% of our annual non-GAAP net income. This record dividend distribution reflects Sapiens' solid performance and our ability to generate free cash flow quarter-over-quarter.

調整後自由現金流方面，我們進行了調整。 2021年第一季度，我們的調整後自由現金流達到1,060萬美元，較2020年第一季成長135%。此外，我們近期宣布派發每股0.37美元的現金股息，總額達2,020萬美元。今年，我們已恢復新冠疫情前的正常股利分配率，最高可達年度非公認會計準則淨收入的40%。創紀錄的股息分配反映了Sapiens的穩健表現以及我們環比創造自由現金流的能力。

I would like to turn now to our guidance for 2021. In Europe, we are seeing organic growth in P&C as well as Life & Annuities. We are also benefiting from the acquisition in the Iberia, DACH and Nordic regions, all of which clearly demonstrate the success of our land-and-expand strategy. We expect to continue to reap the fruits of this investment in 2021 and in the coming years. In North America, taking into account our plan to carefully manage and control the growth, we anticipate that the growth resume towards the end of 2021. Given the high growth in Europe and Rest-of-the-World and taking into account loan growth in North America, we are increasing our revenue guidance from the range of $457 million to $463 million, to the range of $459 million to $464 million.

現在我想談談我們對2021年的預期。在歐洲，我們的財產險和意外險以及壽險和年金業務均實現了有機成長。我們也受惠於在伊比利亞半島、德國、瑞士和北歐地區的收購，這些收購都清楚地證明了我們「落地並擴張」策略的成功。我們預計這項投資將在2021年及未來幾年繼續帶來回報。在北美，考慮到我們精心管理和控製成長的計劃，我們預計成長將在2021年底恢復。鑑於歐洲和世界其他地區的高成長，並考慮到北美的貸款成長，我們將營收預期從4.57億美元至4.63億美元上調至4.59億美元至4.64億美元。

Turning to our operating profit guidance. Our updated profitability guidance for 2021 has been influenced mainly by the following: first, our planned initiative to manage our growth and investment in delivery capabilities in the North America P&C CoreSuite business; second, the recent spike in COVID-19 in India, which will increase our labor cost in the short term. We assume these 2 factors are only temporary. In Q2 2021, we expect operating margin to be at least 16.5%.

談到我們的營業利潤指引。我們更新後的2021年獲利指引主要受到以下因素的影響：首先，我們計劃採取措施管理北美財產險和意外險CoreSuite業務的成長和交付能力的投資；其次，近期印度新冠疫情激增，這將在短期內增加我們的勞動成本。我們認為這兩個因素只是暫時的。我們預計2021年第二季的營業利潤率至少為16.5%。

As to operating margin for the full year of 2021, it is now expected to be in the range of 17% to 17.4% compared to the previous range of 17.7% to 18%. On the M&A front, we have added several companies to the Sapiens family in 2020, and we intend to focus efforts on their integration and supporting the customer of the new companies. We are still evaluating M&A targets in 2021 and act on them if we find the right opportunities.

2021年全年營業利益率預計在17%至17.4%之間，此前預期為17.7%至18%。在併購方面，我們在2020年將多家公司納入Sapiens家族，並計劃專注於這些公司的整合，並為新公司的客戶提供支援。我們仍在評估2021年的併購目標，一旦找到合適的機會，我們將立即採取行動。

I will now turn the call back to Roni Al-Dor. Roni?

我現在將電話轉回給 Roni Al-Dor。 Roni？

Thank you, Roni. With a focus on growth strategy, global diversity and increasing market demand, Sapiens is well positioned for additional success and growth. On a personal note, I would like to express our deepest concern for our Sapiens family in India. The health and well-being of our employees is our highest priority and concern. We are making every effort to provide support.

謝謝你，Roni。 Sapiens 專注於成長策略、全球多元化和不斷增長的市場需求，並已準備好迎接更大的成功和成長。就我個人而言，我想表達我們對印度 Sapiens 大家庭最深切的關懷。員工的健康和福祉是我們最優先考慮和最關心的問題。我們正在盡一切努力提供支援。

I would like now to close our prepared remarks and open the call for questions. Please?

現在我想結束我們的準備發言，開始提問。好嗎？

(Operator Instructions) The first question is from Sterling Auty of JPMorgan.

（操作員指示）第一個問題來自摩根大通的 Sterling Auty。

I wanted to better understand, in North America, given the traditional strategy of a single-hand-to-shake, how you're going to balance moving to partnering with system integrators. What part of the projects do you plan the system integrators to handle? What part of the projects do you intend to continue to hang on in-house? And let's start with that.

我想更了解，在北美，鑑於傳統的單手握手策略，你們將如何平衡與系統整合商的合作。你們計劃讓系統整合商負責哪些專案？你們打算繼續在內部完成哪些專案？我們就從這個問題開始吧。

Okay. Hi. This is Roni Al-Dor. To answer your question, just to remind, we have several products in North America. We have started with CoreSuite and then we have our DECISION management. We have the Reinsurance. We have the Life component. We have Life Core. And we have workers from so many products. So if we are going one by one, right now, with our land-and-expand approach, we made the decision to start to do business on the CoreSuite on North America. As you remember, like many years ago, we decide to focus mainly in the Rest-of-the-World. Right now, we did all of our work. So the product is ready for North America, and we try to do it together with SI. Meaning, right now, we have selected SI in order to do a workforce for them with them on their L&P core system. That's one.

好的。大家好，我是 Roni Al-Dor。為了回答您的問題，我想提醒一下，我們在北美有幾款產品。我們原本是 CoreSuite，後來是 DECISION 管理。我們有再保險、人壽保險組件和 Life Core。我們擁有來自眾多產品的勞動力。所以，如果我們逐一推進，那麼現在，我們採用「落地並擴張」的策略，決定在北美開始基於 CoreSuite 開展業務。您還記得，就像很多年前一樣，我們決定主要關注世界其他地區。目前，我們已經完成了所有工作。所以產品已經為北美市場做好了準備，我們正在嘗試與 SI 合作。也就是說，目前我們選擇了 SI，以便與他們合作，在其 L&P 核心系統上建立勞動力。這是其中之一。

The second thing, on the P&C CoreSuite, we are focusing today on the mid- and lower tier. But we believe that our product is a good fit for the highest tiers, and this is what we plan to do, together with system integrators. So that's the second one. And the third product that we are discussing for a long time with SI is our DECISION management. Again, indecision is pure product. So it's not a lot of hand-to-shake issues because it's mainly the product and sometimes, the customer or their site can do the work by themselves.

第二點，關於P&C CoreSuite，我們目前專注於中低階市場。但我們相信我們的產品也非常適合高端市場，這也是我們計劃與系統整合商合作的方向。這就是第二點。第三點，我們與SI長期討論的產品是我們的決策管理。同樣，猶豫不決純粹是產品的問題。所以，這並非什麼握手言和的問題，因為主要還是產品的問題，有時客戶或其工廠可以自行完成工作。

On top of all of these -- so those are the main products. On top of that, we -- as I mentioned, we hired Jamie as President and General Manager for North America, and he came from many years in PWC and he came with all of this experience. So he can really help us in the future to build the relationship to exactly -- to see what they can do, what we can do. It's gradually, we plan to grow, mainly in North America.

除此之外，這些就是主要產品。此外，正如我所提到的，我們聘請了傑米擔任北美總裁兼總經理，他曾在普華永道工作多年，擁有豐富的經驗。因此，他未來能夠真正幫助我們建立合作關係，了解他們能做什麼，我們能做什麼。我們計劃逐步發展，主要在北美。

All right. Great. I had one follow-up. And just a heads up, I've got 2 teammates that are on the call in 2 different locations. They say that the audio went silent. So I don't know if the operator might be able to check into that. But my follow-up question is around gross margin. Looking at the sequential dip, how much of that is just pure seasonality versus other factors that may have influenced it?

好的。太好了。我有一個後續問題。順便提一下，我有兩個隊友在兩個不同的地方通話。他們說音頻消失了。所以我不知道接線生能否確認一下。但我的後續問題是關於毛利率的。從環比下降來看，其中有多少是純粹的季節性因素，有多少是其他因素造成的？

Hi, Sterling. This is Roni. This is not -- this is mainly coming from P&C CoreSuite, P&C in the States. As we mentioned, we need to increase the team to manage the growth accordingly. We expect to increase the gross margin following from the next quarter.

嗨，Sterling。我是Roni。這主要來自美國的P&C CoreSuite和P&C業務。正如我們所提到的，我們需要擴大團隊規模來管理成長。我們預計下個季度開始毛利率會有所提高。

The next question is from Bhavan Suri of William Blair.

下一個問題來自 William Blair 的 Bhavan Suri。

I guess I want to follow up on Sterling's question a little bit more. One of the value adds you've had and the differentiations is the one-hand-to-shake, and the other piece is that in COGS, the reason why professional services is so important, is you get some R&D. And in DECISION, which is a pure product, it makes sense to have partners. But in some of the other businesses, Reinsurance, which you're seeing growth in and innovation in P&C, what happens to innovation and the R&D piece, if you hand that off to a systems integrator? How should we think about the, whatever it is, 8 percentage points of COGS, that are R&D? How should we try to understand where innovation will happen if that goes to Atos, for example?

我想再進一步回答一下Sterling的問題。你們的增值業務和差異化優勢之一就是「一握手就搞定」。另一個方面是，在銷售成本（COGS）方面，專業服務之所以如此重要，是因為你們需要一些研發資源。而對於DECISION這種純粹的產品來說，擁有合作夥伴是合理的。但是，在其他一些業務中，例如再保險，你們看到了成長，以及財產險和意外險的創新，如果把創新和研發部分交給系統整合商，會發生什麼事？我們該如何看待這8個百分點的COGS研發成本？例如，如果把研發交給Atos，我們該如何理解創新會發生在哪些地方？

Hi, Bhavan, this is Roni Al-Dor. And Roni Giladi will continue. So first of all, all of this idea is part of our product, not all of them, and very focused on a segment. So it's not the entire segment. So I think it's like -- and we plan to do it gradually and mainly in the States and mainly, all the others. Again, if we are talking about Atos, they are more a BPO type of work, so we are doing the full SI. I -- because we want and we, as a company, that's looking to grow, we believe it will take us much, much faster to grow in the States for the Life.

嗨，Bhavan，我是 Roni Al-Dor。接下來是 Roni Giladi 的發言。首先，所有這些想法都是我們產品的一部分，而不是全部，而且非常專注於某個細分市場，而不是整個細分市場。所以我認為——我們計劃逐步推進，主要在美國，以及所有其他市場。再說一次，如果我們談論的是 Atos，他們更像是 BPO 類型的公司，所以我們做的是完整的 SI。因為我們希望，而且作為一家尋求成長的公司，我們相信在美國實現 Life 的成長會更快。

And anyway, today, we don't have business in the -- or relatively, we don't have a big business on the core product and the same thing on the P&C part. So I think the P&C for the higher tier, today, as you know, it's Guidewire and Duck Creek, and we don't see any reason why Sapiens cannot play in this Tier 1. And this is why we would like to start to work. As you know, and we know and we learn it right now, it's still a small part of our business, but it can really influence.

無論如何，目前我們在核心產品方面沒有業務，或者相對而言，我們在財險和意外險方面也沒有很大的業務。所以我認為，目前更高級別的財險和意外險，正如你所知，是 Guidewire 和 Duck Creek，我們認為 Sapiens 沒有理由不能進入這一級別。這就是我們想要開始行動的原因。如你所知，我們現在也知道，這仍然是我們業務的一小部分，但它確實能夠產生影響。

If I need to add one more thing. Today, we are working also with a BPO system integrator with a 2-product work compensation and consolidation master and we know to manage the allocation of resource and still to invest in our products. And as Roni mentioned, the moving to more system integrators will be gradually over the years, so it's not a onetime event. It will take us time to do this.

補充一點。目前，我們也正在與一家 BPO 系統整合商合作，他們擁有雙產品工作補償和整合主控，我們知道如何管理資源分配，並持續投資於我們的產品。正如 Roni 所說，轉向更多系統整合商將是一個循序漸進的過程，並非一次性完成。這需要時間。

I guess just to push a little bit. As you move upper-tier, that's more innovation, that's more complexity, that's more product work. And so if you give that to system integrators, does your R&D go up? Roni Giladi, should we think of that going up as a percentage of revenue, maybe transferring resources to do more R&D directly in the product? How should we think about that? And then I got a quick follow-up.

我想稍微強調一下。隨著業務向更高層次發展，創新性、複雜性和產品工作量也會增加。那麼，如果把這些業務交給系統整合商，你們的研發投入會增加嗎？ Roni Giladi，我們是否應該將其視為收入的一定比例，或許應該將資源轉移到產品上進行更多直接的研發？我們該如何看待這一點？然後我又快速地進行了一次跟進。

You probably are right, but also the license part will go up and that they will compensate for that. Yes, the answer for that is yes. But again, I would like to emphasize this is gradually over time, not in a onetime event.

你可能是對的，但許可證費用也會上漲，他們會進行補償。答案是肯定的。但我再次強調，這是一個循序漸進的過程，而不是一次性事件。

Got you. Got you. Got you. And then I want to touch on North America a little bit. Obviously, we've seen now 2 quarters of kind of just not great growth in North America, right? So it's sort of -- we've sort of seen that down sequentially 5% for 2 consecutive periods. And so help me understand, like I know projects, and so postproduction is less revenue than during the preproduction and the rollout. But given all the wins you've had and the acquisitions, should those just be layering on? So help me think through that process, Roni.

明白了，明白了，明白了。然後我想稍微談談北美市場。顯然，我們已經看到北美市場連續兩季成長乏力，對吧？也就是說，我們已經連續兩個季度環比下降了5%。請幫我理解一下，就像我了解專案一樣，後製的收入會比前期製作和上線期間的收入少。但是，考慮到你們所取得的所有成果和收購，這些應該只是疊加嗎？所以，請幫我仔細想想這個過程，Roni。

Hi, Bhavan. Several things into it. And I think when COVID came last year in 2020, one of the businesses that we had, worker compensation has been affected by that, and was -- revenue was reduced. This reduction in revenue has continued from Q3, Q4 and still continued with us going forward throughout the year, and this is one of the reasons for the reduced revenue that you see.

你好，Bhavan。這裡面有幾個面向。我記得去年2020年新冠疫情爆發的時候，我們旗下的一個業務，員工薪酬，受到了影響，收入也減少了。收入的下降從第三季、第四季開始持續，並且持續到今年全年，這也是收入減少的原因之一。

The other thing is what Roni mentioned about the challenge in delivery, in managing the growth. We would like to do this more carefully. And therefore, we see right now a slower growth on the P&C CoreSuite. I want to emphasize that we see quarter-over-quarter growth, but to get to the level of, let's say, you mentioned 2 quarter ends, probably we'll get this towards the end of the year.

另一件事是羅尼提到的交付和成長管理的挑戰。我們希望更加謹慎地處理此事。因此，我們目前看到財產險和意外險核心套件 (P&C CoreSuite) 的成長有所放緩。我想強調的是，我們的季度環比增長有所放緩，但要達到您提到的兩個季度末的水平，我們可能要到年底才能實現。

The next question is from Chris Merwin of Goldman Sachs.

下一個問題來自高盛的克里斯·默溫。

You have Kevin here on for Chris. It sounds like most of the deals signed over the last 12 months included cloud. Can you unpack that for us a bit? Are those core systems that are being taken in the cloud? Or are they more digital add-ons? Would be great to understand any major change in appetite among customers to migrate to the cloud.

凱文 (Kevin) 代替克里斯 (Chris) 發言。聽起來過去 12 個月簽署的大多數交易都涉及雲端。您能為我們詳細解釋一下嗎？這些被遷移到雲端的系統是核心系統嗎？還是更多的是數位附加元件？如果能了解客戶遷移到雲端的興趣是否有任何重大變化，那就太好了。

Hi, Chris (sic) [Kevin], This is Roni G. You're totally right. Most of the deals that we signed in the last 18 months are cloud. I would like to say it's not native cloud, it's single-tenant cloud, both in Europe and in the States. I hope this answers.

嗨，Chris（原文如此）[Kevin]，我是 Roni G。你說得完全正確。過去18個月我們簽署的大部分交易都與雲端有關。我想說的是，它不是原生雲，而是單一租戶雲，無論是在歐洲還是在美國。希望這能解答你的疑問。

Great. And maybe just a follow-up, I mean, are you seeing kind of more demand from customers? Are you seeing to kind of migrate to cloud within kind of bigger projects? Or is it kind of more kind of incremental kind of add-on deals?

好的。接下來我想問一下，您是否看到客戶的需求增加？您是否看到一些大型專案遷移到雲端？還是說，這只是一些增量式的附加交易？

Currently, what we see is when a prospect would like to go to cloud, this is not if they are existing customer then shift to cloud, this is usually a new deal come to [bear], a new deal come to close. So a new deal comes, and then they move to -- the decision is on the cloud, of course, new technology, with existing customer only when he would like to upgrade. This will come to a question if we move to cloud, yes or no. So right now mainly is a full system solution on the cloud, not add-on.

目前，我們看到的情況是，當潛在客戶想要遷移到雲端時，情況並非如此，如果他們是現有客戶，他們就不會遷移到雲端。通常，他們會先達成一筆新交易，然後才會達成。新交易達成後，他們才會遷移到雲端——當然，雲端運算是新技術，只有當現有客戶想要升級時，才會考慮遷移到雲端。這就會引出一個問題，我們是否遷移到雲端？所以，目前主要提供的是雲端的完整系統解決方案，而不是附加元件。

The next question is from Mayank Tandon of Needham & Company.

下一個問題來自 Needham & Company 的 Mayank Tandon。

I wanted to start with a question about the land-and-expand. Roni Al-Dor, you mentioned that's obviously a focal point for you. Could you talk about how many products you're selling into the installed base today and how we should think about that over time? Like what is sort of the goal here as you look at the business model over the next few years in terms of selling more and more into your installed base?

我想先問一個關於「先佔領再擴張」的問題。羅尼·阿爾多爾，您提到這顯然是您的重點。您能否談談目前您向現有客戶群銷售了多少產品，以及我們應該如何規劃未來的發展？例如，您在未來幾年的商業模式中，在向現有客戶群銷售更多產品方面，您的目標是什麼？

Hi, Mayank. So I will try to answer, and then can Roni help? First of all, the first thing is what we can see more and more is our core products. So this is, for us, is very encouraging that you can see more companies that have policy -- sorry, Life and General Insurance P&C. That's -- and start to want one of them. They are happy with us, happy with the product and implementation. And they're asking us the second core system. This is we can see more, and we also see some kind of a global player that's coming with a package that they want to see, to buy from one vendor all the suites, including Life to Core. That's one.

嗨，Mayank。我會盡力回答，然後Roni能幫忙嗎？首先，我們越來越常看到我們的核心產品。所以，這對我們來說非常令人鼓舞，因為越來越多的公司擁有保單——抱歉，是人壽和一般財產險——並且開始想要其中之一。他們對我們很滿意，對產品和實施也很滿意。他們正在向我們詢問第二個核心系統。這是我們可以看到更多，我們也看到一些全球性公司推出了他們想要看到的套餐，從一家供應商那裡購買所有套件，包括人壽保險到核心保險。這是其中之一。

The second thing that we can see right now, it's the Digital. A majority of our deals are now coming together with the CoreSuite and the Digital. And the next one is the Reinsurance. We -- because we are very strong on Reinsurance, so we again try, sometimes for the first time. We think companies are selecting us and maybe implement it later on, but that's another type of example. We have DECISION that we already mentioned. So I think the big suite that we have, and big has a lot of combination. And also, we have some type of example that we start with Reinsurance, and then people are asking us for GO. So we have many products to offer.

我們目前看到的第二個領域是數位化。我們現在的大多數交易都與 CoreSuite 和數位化解決方案相結合。下一個領域是再保險。因為我們在再保險領域非常強大，所以我們會不斷嘗試，有時甚至是第一次嘗試。我們認為客戶會選擇我們，之後可能會實施，但那是另一種類型的例子。我們之前提到過 DECISION。所以我認為我們擁有的大型套件有很多組合。此外，我們有一些例子，我們從再保險開始，然後客戶要求我們提供 GO 解決方案。所以我們有很多產品可供選擇。

Great. That's helpful color. And I wanted to turn to the model. And for Roni Giladi, Roni, what was the organic growth in 1Q? And then what are you building into your expectations for the full year?

太好了。顏色很有幫助。我想談談模型。 Roni Giladi，第一季的有機成長是多少？您對全年的預期是什麼？

Yes. Mayank, the organic growth on a consolidated basis during Q1 was about 8%. On a yearly basis, we'll reach the 10% even slightly, slightly higher, slightly.

是的。 Mayank，第一季合併後的有機成長率約為8%。以年計算，我們的成長率會達到10%，甚至略高一些。

Okay. And then the final question on margins. Could you size the impact of the disruption in India from the increased COVID cases on the model? And I'm just trying to understand, like when do you think you'll be able to recover that impact as you move through '21 into '22? And sorry, just to -- not to belabor the point, but the question will be around -- if you already had people working from home, what has been the cost for disruption? Is it the inability to hire more staff, or are there other factors that are causing the impact on margins to be negative?

好的。最後一個問題是關於利潤率的。能否估算一下印度新冠病例增加對模型的影響？我只是想了解一下，從2021年到2022年，您認為什麼時候才能恢復這種影響？抱歉，我不想再多說了，但問題是——如果您已經有人在家辦公，那麼這種中斷的成本是多少？是無法招募更多員工，還是有其他因素導致利潤率出現負面影響？

Hi, Mayank, this is Roni. As Roni mentioned in his note, we are very focused on the well-being and the health of the Indian employees. Today, we have about 400 -- 1,400 employees in India. About 8% of them, as of today, have been affected by the COVID-19. You are totally right, in the last year, all of the employees, I would say, 98% of the employees, worked remotely from home and been able to do this successfully and do complete projects and going live, and the customers were very satisfied.

嗨，Mayank，我是 Roni。正如 Roni 在筆記中提到的，我們非常關注印度員工的福祉和健康。目前，我們在印度大約有 400 到 1400 名員工。截至今天，其中約有 8% 受到了 COVID-19 的影響。您說得完全正確，去年，所有員工，我想說 98% 的員工都進行了遠距辦公，並且能夠成功地完成整個專案並順利上線，客戶也非常滿意。

We see this environment right now, in the spike in COVID, can affect some of the resources that we have today in terms of being able to work with their family at home. And we are basically looking to find other solutions, either hire more in India, either go to other territories in order to compensate for this resource because we need this resource for the revenue that we are focusing on. So this will create some additional costs. We expect this to happen, will continue for a few months with us until it will go over. You mentioned about recruiting. I can share some insight. For example, in the last week, we recruited about 14 employees in India. So we still continue to recruit. But we need to find ways to compensate if we have some delays in that area.

我們看到，在當前新冠疫情激增的環境下，我們現有的一些資源可能會受到影響，例如員工無法在家中與家人一起工作。我們正在尋找其他解決方案，要么在印度招聘更多員工，要么去其他地區發展，以彌補這些資源的不足，因為我們需要這些資源來實現我們重點關注的收入。因此，這會產生一些額外的成本。我們預計這種情況會持續幾個月，直到疫情結束。您提到了招聘，我可以分享一些經驗。例如，上週我們在印度招募了大約14名員工。所以我們仍在繼續招募。但如果該地區出現延誤，我們需要找到彌補的方法。

The next question is from Ashwin Shirvaikar of Citibank.

下一個問題來自花旗銀行的 Ashwin Shirvaikar。

So I just want to follow up on that last question and the clarification, I guess, is if it seems like a quarter or 1.5 quarters impact, so the margin impact as well, your margins should recover by 4Q. And if you could break down the margin outlook change, how much is India COVID impact versus North America delivery investments.

所以我想繼續回答最後一個問題。我想澄清的是，如果影響看起來只持續一個季度或一個半季度，那麼利潤率也受影響，那麼你們的利潤率應該會在第四季度恢復。請問，如果能細分一下利潤率前景的變化，印度新冠疫情對利潤率的影響與北美交付投資的影響相比，分別是多少？

Hi. This is Roni G. In my notes, I mentioned that the Q2 profitability level can go, at a minimum, to 16.5%. It will be 16.5% or above. You can assume that the entire difference from Q1 will be the India spike. And after a few months, in Q3, it probably will go up. I mentioned earlier a previous question from Sterling about gross margin. This also will affect Q2 gross margin. And also, from Q3, we will go see it up.

大家好，我是Roni G。我在筆記裡提到，第二季的獲利水準至少可以達到16.5%。會達到16.5%甚至更高。你可以假設，與第一季相比，印度業務的強勁成長將帶來利潤的提升。幾個月後，也就是第三季度，利潤率可能會上升。我之前提到Sterling之前提出的一個關於毛利率的問題。這也會影響第二季的毛利率。而且，從第三季開始，我們會看到毛利率上升。

Okay. Okay. Got it. And then I know a few questions have been asked about SIs. Just from a strategic perspective, the partnering with more SIs, is that driven by you? Or is that ask from customers? Why the change? What's driving it? And assuming you roll out more SIs, how does the financial model change in terms of margins?

好的，好的，明白了。我知道有人問了一些關於系統整合商（SI）的問題。從策略角度來看，與更多系統整合商合作是由您推動的嗎？還是客戶的要求？為什麼要做出改變？是什麼推動了它？假設您推出更多系統整合商，利潤率方面的財務模型會發生怎樣的變化？

Okay. I will start, Roni Al-Dor. I just want to clarify, maybe it was a little bit confusing. With Sapiens, we believe on one-hand-to-shake. We plan to continue with one-hand-to-shake. This is our business model, and we stick on it. Now what we decide to do, in the past, we have Atos, as an example. They are fully BPO. They look after our product. We are doing the implementation together with them. That's fine. This is -- we are not calling a side. This is just partner. They are bringing the BPO. We are bringing all the rest.

好的。 Roni Al-Dor，我先開始。我只是想澄清一下，可能有點讓人困惑。對於 Sapiens，我們秉持單手握手的理念。我們計劃繼續沿用。這是我們的商業模式，我們會堅持下去。現在我們決定要做的，過去我們與 Atos 合作，就像我們之前一樣。他們是完全的 BPO（業務流程外包）。他們負責我們的產品。我們和他們一起實施。沒問題。我們不是所謂的「一方」。我們只是合作夥伴。他們負責 BPO，我們負責其他所有工作。

Now in North America, it's in 1 or 2 products. So like DECISION, DECISION is a -- it's like a product that we don't have the services around it. So why not to go to system integrators. They are looking and they can more like -- almost like a reseller, it's not really one-hand-to-shake.

現在在北美，它只存在於一到兩款產品中。像 DECISION 這樣的產品，我們還沒有配套的服務。所以為什麼不去找系統整合商呢？他們正在尋找，而且他們更像是經銷商，不像真的需要一握手就能成交。

On the very specific product, in the Life & Annuities space for North America, in order to penetrate -- because we believe that we have excellent product for Life & Annuity, but we had, for many, many years, a reputation issue and we are, based on all the good things that we did in the past, right now, we want to penetrate to the U.S. with our products. This is why we are going to -- it's not because we -- nobody -- no customer asked us. It came from us. That's one.

就北美人壽和年金領域的具體產品而言，為了滲透市場——因為我們相信我們擁有優秀的人壽和年金產品，但多年來，我們的聲譽一直存在問題。基於我們過去所取得的良好業績，現在，我們希望將我們的產品滲透到美國市場。這就是為什麼我們要這樣做——不是因為沒有人——沒有客戶問我們。而是我們自己主動提出的。這是其中之一。

Second, right now in Europe and Rest-of-the-World, we are competing with many, Guidewire and all the others, sometimes we see others, but we are working in all tiers. In North America, only in CoreSuite, in order to penetrate in a very cloud environment -- cloud environment, that you have Guidewire and Duck Creek, I think we can increase our chance to go to this market with SI. So it's all -- everything just came from us, and it's very selective and also gradually. I hope...

其次，目前在歐洲和世界其他地區，我們與許多公司競爭，包括 Guidewire 和其他所有公司，有時我們也會遇到其他公司，但我們在各個層面都在努力。在北美，我們只在 CoreSuite 上開展業務，為了在雲端環境（例如 Guidewire 和 Duck Creek）中滲透，我認為我們可以藉助 SI 增加進入這個市場的機會。所以，所有業務都來自我們，而且我們非常有選擇性，而且是循序漸進的。我希望…

Yes. Yes. So that's great. It seems like it's entirely about incremental distribution for a couple of products.

是的，是的。太好了。看起來這完全是關於幾款產品的增量分銷。

Correct.

正確的。

Correct.

正確的。

Ashwin, and therefore, the business model will not change, okay? It will continue with that. It may slightly change. But over time, remember that we have, today, 600 pay customers, all of them are one-hand-to-shake. So the additional incremental will have minimal impact in the beginning.

阿什溫，因此，商業模式不會改變，對吧？它會繼續保持下去。可能會略有變化。但隨著時間的推移，請記住，我們今天有600個付費客戶，他們都是一次性付款的。所以，額外的增量在初期影響很小。

The next question is from Tavy Rosner of Barclays.

下一個問題來自巴克萊銀行的塔維·羅斯納 (Tavy Rosner)。

Most of them have been asked. I was wondering, for the new contracts that you signed, are you still primarily formatting them in a license-plus-maintenance type of format? Or you guys are able to offer kind of subscription-based contracts?

大多數人都問過這個問題。我想知道，你們簽訂的新合約主要還是採用「許可加維護」的模式嗎？或者你們能提供某種基於訂閱的合約？

Hi, Tavy. This is Roni G. I think more than 2 years ago, we shifted from a license mode to a term license, which means including license and maintenance bundled together. And I can say, in the last few months, some of the offers that we already sent out moved to a subscription solution. Again, as we are signing between 25 to 35 new logos, this is only incremental. So we'll not see the effect immediately of that. But we started to do -- shift into this area.

嗨，Tavy。我是 Roni G。大約兩年前，我們從授權模式轉向了定期授權，這意味著授權和維護服務捆綁在一起。我可以說，在過去幾個月裡，我們已經發出的一些優惠也轉向了訂閱解決方案。同樣，由於我們正在簽約 25 到 35 個新標識，這只是一個漸進的過程。所以我們不會立即看到效果。但我們已經開始向這個領域轉型了。

And then I wanted to ask about the competitive landscape. It's pretty clear that Duck Creek, Guidewire that you mentioned are there with the Tier 1, competing head-to-head. I'm wondering more into the Tier 2 and 3. Do you see them bidding against you? Or you're primarily still enjoying kind of peace and quiet among the customers you have reached into?

然後我想問一下競爭格局。很明顯，您提到的 Duck Creek 和 Guidewire 都在與一級供應商正面交鋒。我更想知道二級和三級供應商的情況。您認為他們會和您競爭嗎？還是說，您目前仍在享受與現有客戶之間的平靜？

Definitely, we see 2 of them in also the higher -- in the lower tier. And we see more also Majesco and Insurety. So we see all of them, mainly in the U.S. In all the Rest-of-the-World, we are more seeing Guidewire. Again, they are also going to the lower tier. But as you know, in Europe, we have, at least in a few of DACH region, that we have a very good reputation, and based on our local SIs, it can give us some advantage. The company that we acquired gives us some advantage. So the answer is yes. They are also looking for the mid- and lower tier.

當然，我們看到其中兩家公司也處於較高或較低的層級。 Majesco 和 Insurety 也表現得更好。所以我們主要在美國市場看到了所有這些公司。在世界其他地區，我們更專注於 Guidewire。同樣，他們也在進軍較低層級市場。但如你所知，在歐洲，至少在 DACH 地區的一些地方，我們擁有非常好的聲譽，而且根據我們當地的系統整合商 (SI)，這可以為我們帶來一些優勢。我們收購的公司也為我們帶來了一些優勢。所以答案是肯定的。他們也在尋找中低層級市場。

The next question is from Surinder Thind of Jefferies.

下一個問題來自 Jefferies 的 Surinder Thind。

Just another follow-up question on kind of -- this one is about product strategy, I guess. As you incrementally think about partnering with systems integrators on the margin, does that also impact the product strategy in terms of -- right now, you have different products for different regions. Any consideration about moving certain products to single-code bases, single architectures that may help? Or how should we think about the longer-term implications for a product?

還有一個後續問題──我想這個問題是關於產品策略的。隨著您逐步考慮與系統整合商進行邊際合作，這是否也會影響產品策略？目前，您針對不同地區提供不同的產品。您是否考慮過將某些產品遷移到單一程式碼庫或單一架構，這可能會有所幫助？或者我們應該如何看待這對產品的長期影響？

Hi. The only product -- the only thing that we are now -- have a different product is on our P&C, so we did in the CoreSuite for North America. All the rest, we have -- so take ReinsuranceMaster, is a global one; take our Life CoreSuite, global; DECISION is global. So that's for a specific case that Sapiens decides, that will take us many, many years to penetrate with our P&C to North America. So the answer is general. We prefer to work with one product to all the territories.

你好。我們現在唯一的產品，也就是唯一的產品，是針對財險和意外險，我們在北美的CoreSuite中就做了不同的產品。其他所有產品，如ReinsuranceMaster，是全球性的；Life CoreSuite，是全球性的；DECISION也是全球性的。所以，這些是針對Sapiens公司裁定的特定情況，我們需要很多很多年才能將財險和意外險滲透到北美。所以答案是通用的。我們傾向於在所有地區使用同一款產品。

Understood. And then in terms of just the impact from India, I apologize, I missed the very first question as the line dropped. Did you quantify the revenue impact of the challenges that you were having in India?

明白了。然後，關於印度的影響，抱歉，我錯過了第一個問題，因為電話斷了。您是否量化了印度市場面臨的挑戰對收入的影響？

Hi. We mentioned the challenge on the delivery side that we have. We have 1,400 employees that basically support our revenue globally in Europe and in the States. And because of the spike in COVID-19, we see a challenge that if we'll be able to support this. Today, we have about 8% of our employees affected by the COVID. For that, we need either to recruit more people or to do overtime or to go to other locations, at least only temporary, in the short term, in order to answer the demand for resource.

您好。我們之前提到了交付方面面臨的挑戰。我們在歐洲和美國擁有1400名員工，他們基本上支撐著我們全球的收入。由於新冠疫情的激增，我們面臨能否支撐這些員工的挑戰。目前，我們約有8%的員工受到了疫情的影響。為此，我們需要招募更多員工，或加班，或至少在短期內暫時轉移到其他地點，以滿足資源需求。

So just to clarify, those 8% of the employees, they are nonrevenue-generating at this point?

所以要澄清的是，這 8% 的員工目前沒有創造收入嗎？

Correct. Correct. For the time being, correct.

正確。正確。暫時正確。

Understood. And then when you talk about looking for resources potentially outside of India, is that more of a short-term solution or just more of a broader-term strategy that this may be an opening to think about?

明白了。那麼您提到的在印度以外尋找潛在資源，這更像是短期解決方案，還是更長期的策略？這或許是一個值得思考的開端？

This is only a short-term solution. We would like to continue to grow India. We have a facility there, a management there. We're sure that over time, it will recover, and we'll be able to support Sapiens' in a global level. Just to mention, the 8%, some of them are also including R&D and therefore do not affect the delivery. But overall, today, all together, 8% of India resource being affected.

這只是一個短期解決方案。我們希望繼續發展印度業務。我們在那裡設有工廠，管理團隊也在那裡。我們相信，隨著時間的推移，情況會恢復，我們將能夠在全球範圍內支持 Sapiens。順便提一下，這 8% 的資源，其中一些也包括研發，因此不會影響交付。但總體而言，目前印度共有 8% 的資源受到影響。

Got it. And then one just final bookkeeping question. What was the impact in the quarter from -- on margins from TIA?

明白了。最後還有一個關於簿記的問題。 TIA 對本季的利潤率有什麼影響？

TIA, as you remember, was an acquisition that we had in November 2020, where we only consolidated for 1 month. Overall profitability level is 14%. And in Q1, it was -- came in full quarter. We mentioned that the transition or integration with TIA will take us a full year. And therefore, Q1 obviously was being affected by this margin, a lower margin compared to Sapiens. As we continue down the year, we'll see improvement and also improvement in Sapiens' level.

大家還記得，TIA 是我們在 2020 年 11 月收購的，當時我們只整合了 1 個月。整體獲利水準為 14%。而第一季度，它實現了整整一個季度的利潤。我們之前提到，與 TIA 的過渡或整合將耗時一整年。因此，第一季顯然受到了 TIA 利潤率的影響，相比 Sapiens，TIA 的利潤率較低。隨著時間的推移，我們將看到 Sapiens 的獲利水準不斷提升。

Got it. Just to clarify, is the anticipation that you will get the TIA margins, or once you're fully integrated, that they will be at firm margins? Or are you just anticipating an improvement at this point?

明白了。我想澄清一下，您預期TIA利潤率會提高嗎？還是說一旦完全整合，利潤率就會維持穩定？還是說您只是預期目前利潤率會有所改善？

It's as we continue down the year, it will be the similar level as of Sapiens.

隨著時間的推移，它將達到與智人相似的水平。

(Operator Instructions) There are no further questions at this time. Before I ask Mr. Al-Dor to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin in 2 hours. In the U.S., please call 1 (877) 456-0009. In Israel, please call (03) 925-5900. And internationally, please call 9 (723) 925-5900. Mr. Al-Dor, would you like to make your concluding statement?

（接線員指示）目前沒有其他問題。在請Al-Dor先生開始他的總結發言之前，我想提醒各位與會者，本次電話會議的重播將於2小時後開始。美國境內請撥1-877-456-0009。以色列境內請撥03-925-5900。國際境內請撥9-723-925-5900。 Al-Dor先生，您願意做總結發言嗎？

Yes. Thank you for all joining our call today, and see you next quarter.

是的。感謝大家今天參加我們的電話會議，下個季度再見。

Thank you. This concludes the Sapiens International Corporation First Quarter 2021 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.

謝謝。 Sapiens International Corporation 2021 年第一季業績電話會議到此結束。感謝您的參與。您可以斷開連線並繼續通話。