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Sapiens International Soars in Q1 2024: North American Market Drives Revenue Surge

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Michael Chen

May 8, 2024 - 09:55 am

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Sapiens International Reports Financial Thrive in Q1 2024 with North American Revenue Surge

ROCHELLE PARK, N.J., May 8, 2024 – Sapiens International Corporation, a preeminent provider of software solutions for the insurance market, has declared its financial outcomes for the first quarter, terminating on March 31, 2024. Amidst the remarkable financial growth, the revenue in North America stood out with an impressive increase, contributing significantly to the company's positive performance trajectory.

Financial Highlights of Q1 2024

The financial highlights for the first quarter of 2024 showed promising growth:

  • Total revenue: Sapiens registered revenue figures at $134.2 million, a positive uptick from the $124.7 million reported during the same period last year.
  • Gross Profit: Gross profit figures rose from the previous year's $53.0 million to $57.6 million.
  • Operating Income: A significant increase in operating income was noted, standing at $20.5 million compared to the prior year's $18.9 million.
  • Net Income: Net income attributable to Sapiens' shareholders was posted at $17.4 million, a substantial leap from the previous $14.2 million.

The improvements in gross margin and operating margin are evident, with minute but strategic increases ensuring an overall better financial stance for Sapiens.

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A Leader's Statement

Roni Al-Dor, President and CEO of Sapiens, highlighted the company's first-quarter performance as solid, with total revenue growing by 7.6% reaching $134 million. He revealed that the North American market contributed significantly with a 9.5% increase in revenue compared to the previous year. Annualized recurring revenue (ARR) amplified by 12.7% to $168 million, further securing the company's position within the market. Al-Dor marked the operating profit that reached $24 million, accounting for an operating margin of 18.1%, as a testament to Sapiens' effective strategy and their robust business model.

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The Strategy Behind the Success

Sapiens' leadership attributes the growth to their strategic approach. New sales being programmed into a SaaS (Software-as-a-Service) model are noted as pivotal to success, along with transitioning existing customers to SaaS. A groundbreaking partnership with Microsoft bolsters this strategy and sets Sapiens apart within the insurance domain. This partnership lets Sapiens utilize GenAI capabilities, infusing their solutions with cutting-edge technology and securing a competitive edge.

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Roni Al-Dor explained, "We are well-positioned to continue our positive momentum from the first quarter throughout the remainder of the year." By reaffirming their 2024 guidance for non-GAAP revenues, Sapiens sets a goal range between $550 million to $555 million and aims for a non-GAAP operating margin between 18.1%-18.5%.

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Conferences and Announcements

Sapiens management has organized a conference call and webcast scheduled for May 8, 2024, at 9:30 a.m. Eastern Time to discuss the quarter's results further. The call promises to provide deeper insights into the company's performance and strategic direction. Interested parties from North America and other regions including the UK and Israel are encouraged to participate through the provided access numbers.

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Further accessibility is offered through a live webcast available on Sapiens' website at veidan.activetrail.biz/sapiensq1-2024. A replay will also be hosted on the website for 90 days post-event for those unable to attend the live session.

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Understanding Non-GAAP Financial Measures

Sapiens employs non-GAAP financial measures to provide a clearer picture of the company's operational standing and guide their internal evaluation of performance, aiding in trend analysis and budget planning. These non-GAAP measures exclude expenses that are deemed non-recurring or not indicative of ongoing operational costs, such as amortization of capitalized software, stock-based compensation, or costs related to acquisitions.

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These measures serve as additional tools for investors to evaluate Sapiens' business but are not isolated from GAAP measures. Investors are urged to examine the reconciliations of GAAP to non-GAAP financial measures provided by the company to gain a comprehensive understanding of Sapiens' financial health and prospects.

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About Sapiens International Corporation

Sapiens International Corporation (NASDAQ and TASE: SPNS) specializes in empowering the financial sector, prioritizing the insurance industry, towards digital and innovative agility. With more than four decades of industry expertise, Sapiens offers its clientele a plethora of pre-integrated, low-code capabilities across core and digital domains, facilitating swift adoption of digital transformation practices. Catering to over 600 clients across 30 countries, Sapiens delivers a full suite of solutions that encapsulate core insurance functions while extending to reinsurance, compliance, data management, and decision-making domains. Visit www.sapiens.com or their LinkedIn page to explore their offerings further.

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Media and Investor Relations

For Sapiens' investor and media inquiries, contacts have been made available. These include Yaffa Cohen-Ifrah, the company's Chief Marketing Officer and Head of Investor Relations, as well as Brett Maas and Kimberly Rogers, both from Hayden IR, managing the company's investor relations.

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For more detailed correspondence, interested parties can reach out via email to Yaffa Cohen-Ifrah at [email protected], Brett Maas at [email protected], and Kimberly Rogers at [email protected], ensuring ease of access and open communications for stakeholders.

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Forward-Looking Statements

The forward-looking statements within this press release, subject to safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, are based on the company's beliefs, assumptions, and information currently available. They encompass predictions about anticipated events and financial performance.

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Investors are cautioned that such forward-looking statements are not guarantees of future performance and are contingent on various risks and uncertainties. Potential investors should refer to the "Risk Factors" included in Sapiens' latest Annual Report on Form 20-F for a thorough review of risk factors that could cause actual results to differ materially from those projected.

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Sapiens in Compliance with Debenture Covenants

Sapiens confirmed adherence to debenture covenants by surpassing the stated financial metrics related to shareholders' equity, net financial indebtedness to net capitalization, and net financial indebtedness to EBITDA. Maintaining such financial discipline and achieving favorable results strengthens Sapiens' commitment to financial prudence alongside strategic growth.

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To conclude, Sapiens International Corporation's Q1 2024 reports exhibit robust growth, guided by strategic foresight and an uncompromising commitment towards innovation, marking a promising year ahead. The company stays focused on fortifying its position in the global market through continual transformation, collaboration, and diligent operational management.

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