Edited Transcript of SPNS earnings conference call or presentation 14-May-20 1:30pm GMT

The vast majority of Sapiens employees had the tool to work remotely with the required infrastructure and guidelines in place. As a result, our transition to work-from-home format was relatively smooth. I’m incredibly proud of my team’s hard work in this unique and challenging environment, and I would like to mention the fast adjustment that our customers did to shift to work remotely and continue their customer services and transformation project.

Today, most of our deliverables to our existing customers continue as planned, and we see minimal impact in our revenue stream for existing customers. Having said that, we anticipate delay in the implementation of new customers onboarding later in the year.

We see 3 possible outcomes of new customers. Number one, continue as plan entering the agreement with us as this is a strategic step for them. Number two, entering blueprint as a starting point of the implementation. Or number three, placing the agreement on hold until there is less uncertainty from the COVID-19.

Again, the overall impact of delay of new business is not material. As I mentioned, despite the COVID-19 outbreak, we had the several new wins and go-lives during the quarter, and we have expanded our ecosystem of partnerships. Illinois Mutual Life Insurance chose Sapiens for its Life Digital Transformation Project. That American insurer plans to deliver our Life & Pension offering to optimize sales, drive new business, and provide a superior customer experience. Preferred Physician Medical Risk Retention Group went live with Sapiens P&C offering on the cloud. This client selected our CoreSuite as part of their technology and business transformation strategy to support their growth strategy and next-gen customers. SA Taxi from South Africa went live with Sapiens IDITSuite to offer its clients new short-term business insurance product.

Growing our business with our existing customer base has always been a priority for Sapiens, and we do see more and more cross-sell and upsell opportunity across our portfolio. In February, one of our Tier 1 clients in South Africa went live with Sapiens P&C suite, the selection of our P&C solution followed the successful deployment of our Sapiens Life & Pension suite.

As I mentioned earlier, we see many more selling opportunity with our existing customers. We are now enjoying the return on our investment in our Life & Pension policy administration business that include expansion into group life and improvement of overall technology stack of our Life & Pension suite.

As I mentioned in our previous earnings calls, our Life & Pension policy admin solution was awarded the XCelent Award for its Advanced Technology in January. In parallel, we started to see growing interest in our Life & Pension solutions.

Following the COVID-19, the life insurance market is already reporting a spike in the sales of new life policies, which we expect to accelerate further the monetization of Life & Pension system, which had slowed down in recent years. This trend is already reflected in our growing pipeline for our Life & Pension policies admin in EMEA.

In the P&C, we continue to gain momentum globally in the first quarter. We grow our share with the existing customers as they expand their business with us beyond core to include digital, reinsurance, analytics and managed services. We also had successful growth, the adoption of cloud deployment, which give customers a more flexible deployment model.

I’m delighted to announce that we crossed the 100 customers mark for the reinsurance solution. Sapiens Reinsurance Solutions allows insurance to manage their entire range of reinsurance contract and activities which reach accounting and reporting functionality. Sapiens DECISION is seeing continued expansion in insurance. Decision provide insurance carriers with a platform to develop unique solutions with complex business logic. More carriers are now embracing this solution, either with our policy admin or with a stand-alone offering.

Gartner cited DECISION in their Hype Cycle report as a simple solution for risk and compliance decision management.

On the digital front, our recent acquisition helped us to expand our digital offering and improve our competitive standing. As you may recall, in February, we completed the acquisition of a German-based insurtech sum.cumo. We started integrating our operational and sales team and have already realized the benefit with larger market presence in DACH region and expanded digital offering that we can leverage.

In terms of service model, across all of our products, we see an increased demand for managed services. Our managed services offering brought tremendous value to our customer during the COVID-19. The platform allows carriers to focus on their business while we take care of the operational part of their technology. We expect continued growth for this mode of services. On our ecosystem, we have added several new partners. As there are places integrated real-time geographic risk data in our P&C CoreSuite. SPLICE Software help us to provide streamlined billing, claims, marketing and customer experience communication solution to insurers. Our investment in R&D provides continued improvement because of our offering, which is receiving recognition from leading industry experts.

Sapiens works closely with leading industry analysts such as Gartner, Celent, Novarica and SMA, which gives us confidence in our product road map on our area of business focus. We are aligning our priorities to match the insurance industry needs and trends, both for market average and product offering perspective. Sapiens is well positioned to benefit from macro trends impacting our customers which include the migration from legacy system and adoption of digital capabilities. The current business disruption related to COVID-19 highlights the need for legacy insurance company to modernize their platform, so they can improve remote access and offer digital services as well as maintain compliance and meet regulatory requirements. COVID-19 has proven to be an accelerator of the trend that began in the last few years. Today, more than ever, it has become essential for all carriers to increase digital capacity. Today, shoppers expect quote, insurance purchase and service delivery through a variety of digital channels. This market shift with compel carriers, small or big, to complete their digital transformation.

From Sapiens’ point of view, we have optimized our mode of operation to meet the new business reality. First, our partnership approach with our customer has proven to be an advantage, especially these days. In the last year, we have invested in developing and expanding our customer success executive team. Our direct customer relations have been beneficial aspect of our business model, especially in this challenging business environment, as we help customers address their new and unique challenges to COVID-19. In return, this helped us to secure our recurring revenue while increasing sales within our customer base. The close relationship we enjoy with customers give us meaningful knowledge of their business challenge, unique operational environment in their team. This connection help us be highly accurate in our response to their needs and delivery of additional solution to enable their growth and success. In fact, we are increasing our customer success team to meet the demand from existing customers. As we adapt to the new normal, our own operation have gone through some changes as well. The global business environment has rapidly evolved in reaction to COVID-19 and the agile response to Sapiens team to these changes is increasing our digital engagement model. As we look at the marketing in the context of COVID-19, we believe that the B2B sales and marketing will have to be replanned. As a result, we are adjusting our marketing mix through digital channels. Today, as many industry events are canceled or postponed, we are accelerating our digital marketing activities with a new offering, like digital educational session to our customer and prospect. In the move from face-to-face meeting to information-rich virtual events, we can include more people from our team. By bringing a bigger team into our customer and prospect interaction, we can provide more value and improve outcomes. We are increasing the frequency of FaceTime engagement through virtual meeting, creating more touch points with the market. We already see the benefit of the action we took.

Despite the COVID-19 economic, new prospects and existing prospects are continuing discussion and progressing in their engagements with Sapiens. Our priority remains executing in our growth strategy. For the remainder of 2020, we will continue to grow where we have already landed and leverage our investments. We remain focused on building a unified global platform of innovating digital insurance solution to advance our competitive position as one-stop shop for insurance software, with enhanced products and services. We seek business growth organically and with M&A, while we see further opportunity to increase operating efficiency and improving margins. While there continue to be near-term uncertainty from COVID-19, we remain focused on execution. We have taken appropriate action to provide the necessary flexibility and operating efficiency within the current circumstance. Strong demand for our digital products, combined with a high recurrent revenue and a solid balance sheet, position us for success in this challenging environment. I’m confident that as the global economy recovers, Sapiens will emerge a stronger and well positioned for continued growth.

I would like to turn the call over to our CFO, Roni Giladi, to provide more detail on our financial results. Please go ahead, Roni.

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [3]

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Thank you, Roni. I will review the first quarter non-GAAP results, followed by comments on the balance sheet and cash flow and end with our guidance for the remainder of 2020.

Revenue in the first quarter of 2020 increased 17.9% to $90.5 million from $76.8 million in the first quarter of 2019. The organic revenue growth was 10%, with the balance coming from the impact of the Cálculo and sum.cumo acquisitions. Eliminating the currency impact, our organic growth was 11%. Our revenue in North America totaled $44.6 million, an increase of 16.8% compared to last year. Revenue in Europe totaled $40.2 million, up 25% increase compared to last year, mainly due to the last 2 acquisitions. Revenue from North America and Europe, combined represent 94% of our business.

Gross profit this quarter totaled $39.8 million compared to $33.1 million in the first quarter of last year. Our gross margin increased to 44% from 43.1% in the first quarter of last year.

Operational expenses, R&D and SG&A, including the investment from Cálculo and sum.cumo, remained consistent in this quarter with the first quarter of 2019 of about 28% of our revenue.

Moving to operational profits. Operating profit totaled $14.6 million this quarter compared to $11.8 million in Q1 of 2019 and $14.3 million in prior quarter. Operating margin increased in the first quarter to 16.1%, an 80 basis point improvement from Q1 of 2019. Eliminating the currency impact, our operating margin would have been 17% based on currency of Q1 of 2019 results. Operating margin reduced slightly from Q4 of 2019 to Q1 of 2020 from 16.5% to 16.1%, primarily due to lower operating margin of the acquired entities, which we intend to improve during the year.

Net income attributable to Sapiens’ shareholders for the quarter was $10.4 million compared to $8.4 million in the first quarter of last year, which reflects 24% growth. EPS increased to $0.20 from $0.17 of last year.

Turning to our balance sheet. As of March 31, we had cash and cash equivalents of $80 million. In order to strengthen our balance sheet in response to COVID-19 pandemic, we took a loan from commercial bank in the amount of $20 million with installment payment over the next 2 years. This new loan brings our total debt to $80 million, of which $60 million is spread over 6 years and $20 million over the next 2 years.

In the first quarter, we achieved $3.8 million in free cash flow, which is below our quarterly average due to significantly higher free cash flow in the fourth quarter of 2019. The combined average free cash flow of the 2 quarters is in line with our target quarterly free cash flow.

In spite of global impact of COVID-19, we are announcing a dividend of around $7 million or $0.14 per share. Paying the dividend reflects our continued confidence in our business, our ability to generate cash and our commitment to our shareholders. The dividend will be payable on June 10, 2020, to the shareholders of record as of May 27, 2020.

In closing, I would like to turn to our guidance for 2020. The global economy experienced significant disruption from COVID-19, and we have managed the pandemic effect for both our employees and our customers worldwide. That said, our business model has shown its strength under this new business environment. First, from an operational perspective, we are a software company, which fortunately, allow us to reasonably begin to work from home. Today, 98% of Sapiens worldwide employee base is successfully working from home. Gradually and carefully, employees are starting to return to our offices. Second, from a business perspective, the sector we serve, insurance is an essential business that must continue to manage risk. Sapiens delivers a core system solution for insurers. And this has assured customer stickiness. As a result, we have very high visibility of our revenue stream from existing customers, which is almost 90% of our revenue. These factors give us confidence for the remainder of the year. That said, we faced some headwinds. Macroeconomic uncertainty is impacting the time line to close new business and commence implementation.

As a result, we are revising our 2020 revenue guidance to a new range of $368 million to $377 million, as compared to prior range of $377 million to $383 million, reflecting 2% reduction in the midpoint of the range. The operational efficiency measures we took to adjust our cost to lower revenue expectations and our ability to do so across all departments differently allow us to maintain 2020 operating margin guidance unchanged in the range of 16% to 16.5%.

I would like now to turn the call back to Roni Al-Dor for closing comments. Roni?

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Roni Al-Dor, Sapiens International Corporation N.V. – President, CEO & Director [4]

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Thank you, Roni. The customer success team is doing an outstanding job providing critical support to our customers globally, while our global sales team continue to be focused on signing new businesses in the new market conditions. Our leadership team remains focused on delivering growth and margin expansion as we execute against our long-term objective of improving shareholder value. Sapiens is well positioned for success and growth.

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from Mayank Tandon of Needham & Company.

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Mayank Tandon, Needham & Company, LLC, Research Division – Senior Analyst [2]

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Roni and Roni, congrats on the quarter, very impressive in the face of this global pandemic. So I wanted to first start with just the shift to cloud. Roni, I think you said that you think this could be a potential catalyst. I’m just wondering, how are you addressing the sales challenges in a virtual environment to be able to take advantage of the opportunities in the market as more carriers start to really embrace the cloud.

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Roni Al-Dor, Sapiens International Corporation N.V. – President, CEO & Director [3]

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Yes. Mayank, as you mentioned, all digital and cloud can be more interesting at this time. As you know, we have more than 400 customers worldwide. So we are going to each of them with our managed service approaches, including cloud, and we are bringing more and more opportunity to this area. So that’s definitely from the existing clients. And almost most of our new prospects is also looking for cloud. So we did a lot of investment in the last few years, and we are ready.

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Mayank Tandon, Needham & Company, LLC, Research Division – Senior Analyst [4]

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Okay. So you haven’t really had any challenges in terms of closing these deals and converting these opportunities due to the virtual nature of the sales process? You’ve been able to navigate through that and still close at a pretty healthy rate. Is that so?

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Roni Al-Dor, Sapiens International Corporation N.V. – President, CEO & Director [5]

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No. In terms of closing deals, as I mentioned in my call that we have, it’s not related just for clouds. We have challenges for — mainly for getting more pipeline. The deals that we have on the table, it’s okay. Sometimes we have delayed, but it’s not related to the cloud.

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Mayank Tandon, Needham & Company, LLC, Research Division – Senior Analyst [6]

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Got it. Okay. I wanted to just shift gears to the model. Maybe, Roni, if you could comment on the trajectory of revenue growth and margins. Any changes because of the pandemic? Or do you think it’s going to be following the same seasonal pattern that we’ve seen historically on both the top line and the margin front?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [7]

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Mayank, this is Roni G. I think in this time, our business model shows strength. We are selling core system solution to insurance carrier and has a very high visibility and stickiness, which is very important at this time for a very long period. This is a core system solution and how our customers run their business. So in terms of our revenue, every year, we are entering about 90% of the deal are coming from existing customers. This is implementation that started from last year, and customer post go-live. We see minimal impact due to this pandemic on this level. Yes, there are some upside and even downside. In this area, we are focused on customer success team. To be able to do cross-sell to existing customers because it’s easier in these days.

In the sales cycle, as Roni mentioned, we see longer time to close the deal, although beginning of the year, even in March and April, we signed new opportunity. We see some delay in people taking decision and closing the deal. Some of them are signing, going to blueprint and then put this in hold. So we see there some delay. So we are seeing more revenue from existing, slightly less from new customers, and this is the reason for the change in the guidelines. If we look organically, we are expecting to grow this year about, say, 9%. And on top of that, add additional M&A. So this is the guidance that we show.

In terms of profitability, we are able to adjust our cost structure according to the revenue level. And this is what we did immediately when this started. And as you can see, we split this into 2 areas. The first one is a vendor that we are working with them. For example, event, training, flights, all of expenses on facility, we’ll be able to monitor and reduce. And in the terms of the employee, we adjust the employees to the revenue level. So if we have some slowdown in revenue, we do some freeze in hiring. And therefore, been able to protect our profitability. And this is the reason we’ve been able to remain our profitability level between 16% to 16.5% unchanged, and we started the year even with 16.1%. So overall, I would say the business model stay, continue, and we look forward to it. Yes, there is some slowdown due is pandemic, but overall stayed the same.

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Mayank Tandon, Needham & Company, LLC, Research Division – Senior Analyst [8]

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Got it. And then just very final question here from my perspective. A lot of the companies that have large delivery hubs in India have had supply-side constraints just because of the work-from-home shift. It doesn’t seem like that disrupted your model. Could you just comment on how you address those challenges, if there were challenges that you faced from the lockdown was announced in India in late March?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [9]

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We started mid-March even to do some testing, working from home for the entire company globally. Basically, for 3 days, third of the company globally went to work from home, and we measure if we are capable of this, are we missing laptops, firewall and all of that, and basically, we’ve been able to do this successfully and work from home. As I mentioned, 98% of the employees are working from home. Regarding India, we had some concern. The reason is not our offices or the employee is the infrastructure that exists in India as a country. But as of now, we see that this is working well. We are being able to provide services in terms of delivery and R&D to internal and for our customers. So currently, we do not see any impact as of today. We hope to continue also in the future.

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Operator [10]

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The next question is from Bhavan Suri of William Blair.

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Bhavanmit Singh Suri, William Blair & Company L.L.C., Research Division – Partner & Co-Group Head of Technology, Media and Communications [11]

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Glad you’re all safe and well. I guess I wanted to touch a little bit on, first of all, what you’re seeing with the existing customer deployments. So obviously, as you think about existing customers roll out implementation in late March, early April, did you see — was there a pause maybe and that’s picked up? Was there people sort of reevaluating pacing of deliverables, and that’s changed? Just some color of what you’ve seen that might have happened in the last couple of weeks of March, early April and sort of now, say, 4 weeks later, sort of what that trend looks like?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [12]

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Bhavan, I will take this. 15% of Sapien’s revenue is coming from customers that we signed last year. And right now, are being in the middle or early stage or end of the stage of the implementation of the core system solution. In the company, we are monitoring this area. Basically, we are monitoring all the key accounts and major revenue level, and we put also attention into this. We thought that there will be 3 opportunities or 3 options to them to work, either continue as usual. Or to postpone the implementation to a longer period, which means slightly revenue this year moving to next year or to put the entire thing in freeze. As of today, and we are already 2 months into this. We do not have even one customer that stop implementation. All the customers continue. I must say that there is potentially some discussion on extending the time, but not putting the entire project in freeze. We do not have a situation like this. So overall, small impact, not material and again, this represents about 15% of our revenue level.

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Bhavanmit Singh Suri, William Blair & Company L.L.C., Research Division – Partner & Co-Group Head of Technology, Media and Communications [13]

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So let me just drill down that a little bit. So when you look at the guidance, Roni, and you’ve got the potential for extending the time line for these projects. Have you built that in or how much have you build that into the guidance today? I understand the new logos will be tough and that makes sense for everybody especially for complex kind of mission-critical systems. But for the existing guys, how much have you sort of thought about building that into guidance, sort of a risk analysis of the projects that are going on?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [14]

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Yes. We factor some delay, not material one, but some delay that revenue will be shifted from 2019 to 2020. But as I mentioned earlier, we are right now extending or increasing the team of customer success. We see right now opportunity and not real opportunity. We are doing so. Of increasing the revenue that our customers that post go-live and can consume from us additional services. Roni mentioned digital solution, offshore or capability that other companies cannot fulfill. So we are compensating this with existing customers that post go-live with additional services that we can offer. But we factor this in already.

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Bhavanmit Singh Suri, William Blair & Company L.L.C., Research Division – Partner & Co-Group Head of Technology, Media and Communications [15]

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Got it. Got it. Got it. And then I want to jump on to the Life & Annuities, the reinsurance business. If I look at that, you sort of thought about that business will be stable to flat, but you’ve now had some wins given the investment side. I guess as we think about Life & Annuities, how does that layer into the growth initiatives? Is this implied in growth this year? Do you think that adds to some of the growth this year? Or do you think that’s more like 2021, 2022, and that plays out?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [16]

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I think we saw already shift in the life area in terms of growth. We already started this last year. We win some deals. I can say right now that we have also some opportunity — nice opportunity that we are working on. Q1 was growth for life, more on the European side, less on the U.S.A. side. But overall, the entire life is slightly growing, single-digit but growing.

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Bhavanmit Singh Suri, William Blair & Company L.L.C., Research Division – Partner & Co-Group Head of Technology, Media and Communications [17]

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Got you. Got you. And then one last one from me. You’ve talked about sort of this shift to managed services. You’ve talked about cloud. But historically, you said there’s been very little interest in cloud. And so I’d love to understand sort of not this year, maybe, but in the next 2 to 3 years, how big do you think the managed services business could be as a percentage of revenue? And obviously, that’s a very nice recurring piece? And then what are gross margins in that business like, Roni?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [18]

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Today, we do not have significant amount of managed services plus cloud revenue. But I would say that all the deals that we are signing, I would say, majority of them are managed services plus cloud opportunity. So think about this 500 customer, we are signing, let’s say, 30, 40 new deals every year. This is the piece that’s moving to cloud plus managed services, it can go to, let’s say, 15%, 20%, let’s say, in several years, not now. In terms of profitability, in the initial days, it’s — cost us more, but the beauty of this, this creates additional stickiness and higher profitability, let’s say, in NIM number 2, 3 and going onwards.

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Operator [19]

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The next question is from Bryan Bergin of Cowen.

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Bryan C. Bergin, Cowen and Company, LLC, Research Division – MD & Analyst [20]

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Wanted to ask if you can give some comments on client behavior that you’re seeing based on the customer size. I’m curious if you’re having different conversations or seeing different priorities at some of the larger insurance organizations versus the traditional base in the lower tiers?

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Roni Al-Dor, Sapiens International Corporation N.V. – President, CEO & Director [21]

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This is Roni. We don’t — the behavior of 400 customer can be different for each one of them. I think the main focus right now from the — the customer that in production is make sure that we are able to maintain them. We can work remotely, and we can add more value that they are looking for. For the transformation project that we have, the main challenges in the work from home, mainly in Europe because most of our client in U.S. regular to work from home. There is a few customers in Europe. This is relatively new for them and also new for our employees from the rest of the world. But we don’t see any big changes on the — where they really want to invest. For sure, everything around digital and digital enabled, and this is something that’s interesting to all of our customers.

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Bryan C. Bergin, Cowen and Company, LLC, Research Division – MD & Analyst [22]

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Okay. And then as we think about the progress here over the next couple of quarters, do you expect to see the June quarter as a low point and a build from there from a growth standpoint? Or do you expect it to be relatively even as you go through the balance of the year?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [23]

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This is Roni G. I think if we look at the yearly guidance, we are still focusing growth area. As I mentioned earlier, it’s about 9%. We are planning to grow quarter-over-quarter at steady state. The new layers are building on top of each time. So we do not have any drop. We are going to continue adding additional line of revenue quarter-over-quarter.

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Bryan C. Bergin, Cowen and Company, LLC, Research Division – MD & Analyst [24]

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Okay. That’s helpful. And just last one for you here. Has the current environment changed, anything around capital allocation as it relates to M&A? Obviously, you have the dividend announcement here. I’m just curious on the M&A front. Anything around commentary on pipeline and the valuations you may be seeing?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [25]

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This is Roni. M&A is part of our strategy. So we didn’t stop looking into M&A. Yes, we are looking at not big companies. We’re looking to medium- to small-sized company to mitigate the risk. We understand that also the due diligence process will be remotely. So we are conscious about this, and we’ll make sure that we reduce the risk as much as possible. We are looking to do M&A. We think the valuation will go down. We think that the private companies still did not digest fully the change in the valuation. It will take months 2, 3 in order to adjust and then be more realistic in terms of valuation, and we will be ready. As we mentioned earlier, we took a loan of $20 million immediately as this pandemic started to be able to execute when we find the right opportunity.

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Operator [26]

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The next question is from Tavy Rosner of Barclays.

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Tavy Rosner, Barclays Bank PLC, Research Division – Head of Israel Equities Research [27]

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Most of them have been answered. I guess if I can have just a final one on the guidance. You gave a lot of color. If I put in all together what you’ve said, correct me if I’m wrong, but it sounds like most of revenues have been recurring. And therefore, the decrease in guidance reflect to some investment being delayed by some of your clients. However, if I look at the long term, the current situation has bring awareness to more and more insurance company and the need for them to digitize their solution. So I guess looking into 2020 and 2021 together, would you say that the outlook now is better than what it was a couple of months ago, driven by the increase in potential new contracts on the road?

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Roni Giladi, Sapiens International Corporation N.V. – CFO & VP [28]

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Tavy, this is Roni. I think the outlook is more relaxed. I think in the early days, it was very much concerned. And right now, it’s little bit company are releasing the restriction. We’d like to give some color. I think Roni mentioned this when he talked, the digital is becoming more and more demand from our customers. Recently, we acquired a company in Germany, sum.cumo and we see higher demand than we expected when we acquired these companies. So we see revenue there above our expectation because of the digitalization, and they are supporting us in the revenue, of course, start in DACH and potentially outside of DACH that. The growth rate that we are seeing right now is about 9%. Of course, if the pandemic will continue for a very long time, this will hurt us because it will be — will not allow us to close more deals. When we talk to analysts, they are saying that once this is over a lot of company that have legacy solution will quicker their decision in order to move to a modern technology because this environment do not allow them easily to work from home. So the environment, the macro will remain the same, let’s say, after we are out of this pandemic. But if it will stay for longer, for sure, this will be a impact to us.

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Operator [29]

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(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 (888) 326-9310. In Israel, please call 03-925-5925. And internationally, please call 9 (723) 925-5925. Mr. Al-Dor, would you like to make your concluding statement?

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Roni Al-Dor, Sapiens International Corporation N.V. – President, CEO & Director [30]

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Yes. Thank you, operator, and thank you to all the participants who joined us today. Have a good day.

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Operator [31]

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Thank you. This concludes the Sapiens International Corporation First Quarter 2020 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.