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Operator: Welcome to Sapiens International Corporation’s 2024 Third Quarter Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. It is now my pleasure to introduce your host, Yaffa Cohen-Ifrah, Chief Marketing Officer and Head of Investor Relations. Thank you. Yaffa, you may now begin.

Yaffa Cohen-Ifrah: Thank you, operator. I want to welcome you to Sapiens conference call to review our third quarter results for 2024. With me on the call today are Mr. Roni Al-Dor, President and CEO; Mr. Roni Giladi, CFO; and Mr. Alex Zukerman, Chief Strategy Officer. Following the summary of the results, we will be available to answer any questions. Before we start, I would like to remind everyone that this conference call may contain projections or other forward-looking statements. The safe harbor provision in the press release issued today also apply to the content of this call. Sapiens expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations or otherwise.

On today’s call, we will refer to the non-GAAP financial measures. A reconciliation of GAAP to non-GAAP results has been provided in our press release, which was issued before the market opened this morning. A replay of this call will be available after the call on our Investor Relations section of the company’s website. or via the website link, which is available in the earnings release we published today. I will now turn the call over to Roni Al-Dor, President and CEO of Sapiens. Roni?

Roni Al-Dor: Good morning, everyone, and thank you for joining us today for Sapiens’ third quarter 2024 earnings call. Our revenue in the third quarter was $137 million, a 4.8% increase compared to last year. This quarter continued to showcase solid execution across all of our key regions. Let’s start with North America, where we secured new business wins during the quarter. I want to highlight a few. Continental General chose the cloud-based Sapiens insurance platform for life and annuity to improve its capabilities and modernize its platform to future insurance products. These improvements will enhance its ability to scale in new markets and streamline implementation of its long-term care insurers specialty while expanding third-party administrator, TPA services through its affiliates.

Another win in the life space was a leading Canadian life and health insurance carrier, which selected the cloud-based Sapiens insurance platform to enhance its operational performance boost efficiency, elevate the client and adviser experience and driving digital transformation and growth in the life and health markets. Harford Mutual insurance companies selected a cloud-based Sapiens reinsurance pro to automate its reinsurance management process, improve efficiencies and profitabilities and mitigate costly claims leakage. Sapiens automated solution eliminates complexities within treaties by balancing the appropriate coverage with the rising coverage cost enabling Harford Mutual to track, build, recover reinsurance and capture valuable data.

And lastly, Society Insurance chose Sapiens to automate and transform its reinsurance processes. Our cloud-based reinsurance system met Society need for an automated out-of-the-box solution. Society can now manage its entire reinsurance program to centralize data in a consolidated repository that quickly runs queries and access reports. Sapiens stood out for its broad range of capabilities in reinsurance, accounting and cash management compliance with auditing and statutory requirements. Let me highlight a few successful North America, go lives and upgrades with existing customers in quarter three. In July, Pan American Life Insurance Group, PALIG, successfully went live with Sapiens IllustrationPro sub solution on the Microsoft Azure cloud.

A long time Sapiens customer PALIG wanted to transform its current system to Sapiens digital web-based solution to integrate across multiple platforms. IllustrationPro will enable PALIG to consolidate illustration on a single platform, ensuring fast time to market, robust view comparisons, client management and self-sufficient feature will allow them to manage multiple products launches more efficiency while improving the agent experience with scalable, flexible solutions. Workers’ Compensation is a market where Sapiens is building a momentum in North America and remains a substantial growth opportunity for Sapiens in the year ahead. In the third quarter, we completed the Workers’ Compensation customer upgrade with our latest functionally rich CoreSuite for Workers’ Compensation version.

Also, our North America team continues progressing on three major Workers’ Compensation project which we expected to go live in 2025. The win this quarter reinforced the value and the trust that insurance plays in Sapiens to innovate and drive business transformation, and we are always working to ensure we can deliver the most value to the market. In process Property & Casualty, several North American projects went live this quarter, and we are working on several customer upgrades. We also launched our latest version of Sapiens’ CoreSuite for Property & Casualty for North America insurance market. The new release delivers insurers, many functionality and performance improvement and enhanced security features. The release introduced an integrated AI-based open platform to strengthen the Sapiens insurance platform digital layer and expanding its core business capabilities ensure it remains future proof.

We have improved the consistency of our data to help the insurance overcome the challenges of data migration and ensure that data is consistent and AI ready. Moving to system integrator, Sapiens is making progress in collaboration with system integrators, which has resulted in promising opportunity in our pipeline that would have been otherwise unattainable. These partnerships have unlocked new avenues for growth and development, demonstrating the strategic value and the potential of our SIs in expanding our market reach. We are exciting about the opportunity and beneficial outcome, this relationship could deliver. Before we move to the rest of the world, I want to share some highlights from our Annual North America Customer Summit. In September, we held our Customer Summit in Austin, Texas.

Austin is the world live music capital with the perfect backdrop for an event, focus in innovation, collaboration and transformative solution in the insurance industry. The teams of our Summit compose your future express Sapiens mission to lead the future of insurance technology. This year, we hosted 545 participants from 135 insurance companies and partners, organization. Industry leaders like Microsoft, Deloitte, Celent and Datos contribute value perspective. We also had 22 partners, companies present. The summit provides tremendous value with the opportunity to develop deeper customer relationships meet prospects and generate leads. With our partners, companies and our customers to identify emerging market trends and gain value well insights into our customer needs and concern.

From this event, we create a foundation for growth and success and reinforce our commitment to driving transformative journeys for Sapiens clients. Moving to the rest of the world. We are progressing with customer upgrades and go live with our IDITSuite, Tia Suite, ReinsuranceMaster and CoreSuite life solutions, and we have had several successful go live this quarter. I want to highlight the Hollard Group risk go live in this quarter. Hollard went live with Sapiens data and analytics solution, complementing its CoreSuite for life and pension. DataSuite will accelerate the complex migration of all businesses and align its process as the company transformation from its core and legacy system to Sapiens CoreSuite for life and pension. This will reduce operational costs and deliver automated seamless user experience for customers and all our staff.

Integrated DataSuite significantly reduced the complexity of Hollard migration process, which require the complicated development of tailored reports and merging them across the legacy and CoreSuite systems. Among its many benefit data suite empowers Hollard to manage data and reporting need while seamlessly operating its business during the migration. Demand for Sapiens’ product remains solid in EMEA and APAC, particularly for our Life platform and P&C platform solution IDIT and Tia. There is continued demand for SaaS platform across all solution lives and tiers. We are also experiencing growing demand for AI-driven solutions as clients increasingly want to leverage AI to enhance operational efficiency and elevate customer experience. With regulatory agencies starting to issue guidance on AI, Sapiens with its local presence in key markets and deep regulatory knowledge is positioned to enable our clients to stay ahead of industry trends and meet regulatory requirements.

Our digital transformation capabilities tailor for medium to smaller carriers enable crucial digital strategy over legacy strategies. These tiers of insurers can innovate quickly with our digital front-end solution while gradually replacing legacy systems. In the European market, demand for Sapiens solution remains robust despite the delay in signing new deals. These delays are primarily due to the regulatory approval process for SaaS-based model, extend contract time line due to compliance and security reviews and protected business case approval factor outside of our control. As a result, the average contracting period year-to-date has extended, we are confident we will close these deals in the coming quarters. Our strategic partner with Microsoft has been instrumental in driving innovation, leveraging their cutting-edge technology and collaborative support to enhance our market present and deliver exceptional value to our customers.

Before I wrap up, I would like to share our 2024 annual guidance and outlook for 2025. Roni Giladi will provide the full details. But in brief, we are reducing our full-year 2024 revenue guidance. This revision reflects trends that impact our results this quarter and which we expect to persist in the fourth quarter and into 2025. Despite the revenue guidance adjustment, our strong emphasis on expense management enabled us to leave our non-GAAP operating margin guidance unchanged for 2024. Let me provide some context on the external and internal factor influencing revenue. One of the key contributors is our strategic shift to SaaS-based model position us to future sustainable high-margin growth while we anticipate some impact on 2024 revenue from this transition, the actual impact has been greater.

This shift to SaaS has also lead extend sales cycle, particularly in Europe, where many insurance carriers are new to SaaS and carefully evaluate the benefit before committing. As a result, we are experiencing a slightly longer time to close deals in certain regions as they evaluate the SaaS model advantage. Additionally, our North America cost with P&C business is facing headwinds with the sector-specific challenges and increased competition. Let me emphasize that our workers’ compensation and reinsurance business is progressing as planned. And lastly, the broader macroeconomic environment is leading insurance carriers to take more time in making investment decisions and finalizing deals. We expect this factor to continue to influence growth as we enter to 2025, with that in mind, we anticipate next year’s growth will be a low single digit.

I want to reiterate that our commitment to building a robust pipeline and expanding our client base across all key markets remain unwavering as the business landscape continues to evolve, Sapiens stands determined to execute our strategy to empower insurance carriers with smaller competitive platform. To further enhance our competitive position in P&C North America market, we are directing invest in a few areas, platform innovation and advanced AI capabilities. We continue to invest in Sapiens intelligent insurance platform for P&C, which integrated data suite, digital portals and core processing to provide cohesive end-to-end advanced business experience and streamline operations. Building on the success or the approach used with our life and annuity platform a few years back, which has accelerated second growth in this market.

We are confident in applying a similar strategy to our core P&C solutions. We are also refining our go-to-market strategy and strengthening our sales and marketing teams to pursue new opportunities while addressing challenges in the market. We are confident that Sapiens focus on innovation and client successful will drive sustainability growth globally and strengthen our position as a trusted partner in the insurance industry. To drive return to higher growth, we’ll focus on accelerating the expansion of our gross product. With a strong establishment customer base, we also see significant cross-sell opportunity for our data, digital and decision solution, including our AI-driven offering. We also continue to transition our existing customers to our cloud offering.

Additionally, we will deepen our penetration in the North America market with our Life platform where we hold a leading position and we are gaining momentum, while continue to reinforce our presence in these key markets. In summary, quarter three 2024 marked another quarter of growth and operational progress. We are executing our 2024 priorities, including accelerating the shift to SaaS model, which is better position us for the long term and delivering solid performance across all of our key regions. Now I would like to turn the call over to our CFO to provide more detail on our financial performance.

Roni Giladi: Thank you, Roni. I will begin my commentary by reviewing the third quarter of 2024 non-GAAP results, followed by comments on the balance sheet and cash flow. I will wrap up with our guidance for 2024. Revenue in the third quarter of 2024 was $137 million, an increase of 4.8% compared to $131 million in the third quarter of 2023. Currency impact on revenue was minimal this quarter. As Roni mentioned in his remarks, we are experiencing delay in closing new deals, which resulted in lower revenue compared to our internal expectations. For Q3 of 2024, our annualized recurring revenue, ARR, reached $173 million, reflecting a decrease from Q3 of 2023, higher than the reported revenue growth during the same period of 4.8%.

Looking at the revenue mix. Revenue from re-occurring software products and re-occurring postproduction services increased year-over-year by 15.3% to $101 million compared to $87 million in Q3 of 2023. We are pleased with the double-digit growth. Revenue from pre-products and implementation services totaled $36 million compared to $43 million last year. The decline in preproduction implementation revenue was mainly due to delay in signing new deals and the shift to SaaS, as I mentioned in previous quarter. Switching now to geographic breakdown. Revenue in North America was $56 million compared to $55 million in the year ago quarter, an increase of 1.7%. Revenue in Europe was $69 million, a year-over-year increase of 7.1%. Revenue in the rest of world, which includes South Africa and APAC was $12 million, an increase of 6.6% compared to prior year quarter.

Moving to profitability. Gross profit this quarter was $63 million compared to $59 million in Q3 of 2023. Gross margin this quarter was 45.8% compared to 45.3%, an increase of 50 basis points compared to Q3 of 2023. This increase is mainly due to higher ratio of recurring and re-occurring revenue versus onetime revenue for implementation. Operating profit and margin in the third quarter of 2024 was $25 million and 18.3% of total revenue compared to $24 million and 18.4% in the third quarter of 2023. Operating profit in Q3 grew by 4.3% or by $1 million. We maintained an operating margin within our target range of 18.3% despite the increased investments in sales and marketing in the third quarter. Net income attributed to Sapiens shareholders was $21 million or 10% increase from $19 million of Q3 of 2023.

Earnings per diluted share was $0.37, up 8.8% from $0.34 in Q3 of 2023. Turning to our balance sheet. As of September 30, 2024, we had cash and cash equivalents and short-term deposits totaling $186 million and debt of $40 million. During the quarter, we distributed dividend in the amount of $16.2 million or $0.29 per share to our shareholders. The dividend represents 39% of net income for the first half of 2024. Turning to our adjusted free cash flow. In the third quarter of 2024, we generated $10 million in free cash flow compared to $2 million in Q3 of 2023. For the first nine months of 2024, we generated adjusted free cash flow of $33 million, similar to the first nine months of 2023. In the third quarter, Maalot S&P Global, a part of the global rating firm Standard and Poor’s financial service confirmed the long-term issuer rating for Sapiens as AA minus with stable outlook while also confirming the ratings for Sapiens series B venture as AA minus.

Let me switch gears to discuss our guidance for the remainder of 2024 and our preliminary look at 2025. Today, we are revising our 2024 annual non-GAAP revenue guidance to $541 million to $546 million from a previous range of $550 million to $555 million. A reduction of about 1.6%. While it’s too early to discuss our 2025 expectation in detail, we expect revenue growth to be in the low single digits. The reason for the 2024 reduced guidance and the lower growth rate for 2025 compared to previous year are similar and are as follows: one, at the beginning of the year, we took a strategic decision to transition to SaaS all our products across all territories. Initially, we estimate that this transition would have revenue cognition impact of approximately 1% headwind on our revenue.

However, the actual has been greater totaling between 2% to 3%. We anticipate this trend we see in 2024 will carry over into 2025. Additionally, another factor of this transition to SaaS is the extended decision-making process among insurance carriers, mainly in Europe. This delay has affected new deal signing and therefore, our revenue. Two, our North American property & casualty business is facing headwinds with the sector-specific challenges and heightened competition. As a result, revenue from new deals has decreased. In addition, following the go-live of certain projects, we are experiencing overall decline in revenue. Three, we are witnessing the same macroeconomic uncertainty that impacted many global enterprise software companies. In our market, this is materializing as longer decision cycle or, in some cases, delaying decision by our insurance carrier.

As a result, fewer new deals were signed in 2024, which negatively impact our 2024 revenues. This effect is expected to be more pronounced in 2025 when this new deal that we anticipated to be signed in 2024, we have support to generate higher revenue in 2025, particularly due to full year of implementation and recurring revenue. On a positive note, we expect an annual 2024 non-GAAP operating margin of 18.2%, which is within our range. While these challenges will impact the next several quarters, the market opportunity ahead of us continue to remain strong as we are still in the mindset of multi-decade replacement cycle across the P&C and Life markets. Looking at the past 10 years. Sapiens organic growth has high single digits, growing globally, both in P&C and Life.

And together with M&A, we reported double-digit growth. Also, in the past two years, revenue from re-occurring software product and re-occurring postproduction services represented between 65% to 73% of total revenue, highlighting the stability, visibility and stickiness of revenue from existing customers. Sapiens has a solid foundation of 600 customers and a comprehensive suite of products, including core, business application, data and digital solutions both for P&C and Life, with a broad geographic reach across North America, Europe and APAC. We believe in our ability to return to a similar growth level as we continue executing our long-term growth strategy keeping investing in our solution and offer a competitive platform to insurance carrier.

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

Roni Al-Dor: Thank you, Roni. We delivered a solid third quarter, reflecting continued progress across our key markets. Our continued investment in our insurance platform remains a critical delivery for growth. Most importantly, we are committed to delivering long-term growth across all of our key territories and reinforce our position as a trusted provider for the intelligent insurance solution. I want to thank our global team for their commitment to excellence and growth and our investors for their ongoing support of Sapiens. I will now ask the operator to please open the call for questions.

Operator: Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] The first question is from Sam Salvas of Needham & Company. Please go ahead.

Samuel Salvas: Great. Thanks. Hey, guys. Thanks for taking the questions, today. I’m Sam Salvas on for Mayank. First off, I wanted to touch more on the competitive pressures you guys called out. Can you talk more about what exactly you’re seeing, which market products these are in and maybe the steps you guys are taking to mitigate some of these impacts?

Alex Zukerman: Yes. Sure. This is Alex speaking. So when we look at the competitive landscape, I think we feel that the highest pressure on the competitive side is on the P&C, our P&C operation in North America. This is where we feel the strongest pressure. This is not new in terms of the crowdness of the market. It’s a very, very competitive landscape for a few years now on the P&C side. But the combination of that, together with a bit of the point market conditions we’ve seen in the North America market on the P&C side, which is a combination of the geographical catastrophes that happened in ’24, the reinsurance rates that are spiking high, the inflation. So the combination of those specifically for this year, economical situation plus the high competition over the deals, the combination of them creates a very competitive landscape for us.

Now our plan to mitigate that and our offering to the market that is based on our platform proposition. We talked about it in our previous ports. We launched it in the middle of this year in ’24, our platform proposition we see a great feedback from the market, and this is both for P&C and Life. But when we started to focus where we started to focus our efforts of the platform and launched it substantially. It’s more on the Life side and on the European side. Our plan to launch the platform for North America CoreSuite P&C is planned for 2025. And this will provide us very strong capabilities and differentiation to cope with competition. And that’s our plan for the market.

Roni Al-Dor: This is Roni. Just I would like to emphasize when Alex talked about P&C North America, I use only to the core system, not including reinsurance or workers’ compensation there we feel strong.

Samuel Salvas: Got it. Okay. That’s helpful. Makes sense. And then just a quick follow-up. Just on the preliminary ’25 guide you guys gave. Could you guys talk about some of the macro assumptions you have as you go to that revenue target?

Roni Giladi: Hi, Sam. This is Roni G. Basically, the assumption on the reason for this is coming from early 2024 and continue with us into 2023 — to ’25 . I will not repeat what Alex mentioned about the macroeconomics that we feel right now and continue to 2025. By the way, we see the demand, but the market is cautious. So this is important to say. We do not see this as a long term, but a specific period. The second item is transition to SaaS. Early in the year, we took a strategic decision to move all Sapiens products globally, North America and Europe, APAC to the cloud. We did it before — year before only in North America specific product. What we see is the transition have impact on two level. The first one is the delay of decision-making from the insurance career, mainly in the European side.

The reason for that, the deal became longer and embedded into an additional factor that wasn’t in the past. Therefore, the decision process and the approval taking us more time and obviously delay on the revenue. So this is one factor. The second factor is implication on the revenue recognition. Earlier in the year, we mentioned an estimated this to be a 1% impact on the revenue growth. And now as we have revisit this, we see this as item on top or different, one is misestimate in the first year. And the second one is the transition of existing customers post-production to the cloud also take some hit on the revenue recognition because it’s further spread the revenue for a longer period. So all of the items here, implication have revenue impact of between 2% to 3% versus the 1% that we mentioned earlier.

And the P&C cost with North America, Alex mentioned, I will just emphasize only on the reinsurance – not in the reinsurance and workers’ compensation, have also impact into 2025. One factor to take in, when we see the new deals in 2024, slowing down. There is impact into 2025 because the revenue recognized in 2024 is only partial of the year and 2025 is full year. So we are basically filling the less revenue in 2025 – for into 2025. All of these came us to conclusion that based on what we see today, and the estimate of the revenue will come at low single-digit growth.

Samuel Salvas: Yeah. Okay. All right. Thaks, guys. I’ll jump back into queue.

Operator: The next question is from Dylan Becker of William Blair. Please go ahead.

Dylan Becker: Hey, guys. I appreciate the question. Maybe Roni G, with you, sticking on that last point, you could argue that accelerated headwind from the SaaS transition as a net positive and maybe some partner components within that. But as you talk about elongation, I guess, can you give us a general sense in your confidence around, but it’s more kind of timing in nature versus anything falling out of the pipeline. I’d assume a lot of these customers are already having Sapien’s relationship, and it’s just kind of a matter of contract timing and getting the resources allocated. But a general sense and kind of the confidence here and what you’re seeing from a pipeline perspective?

Roni Giladi: Hi, Dylan. Thank you. So first of all, this is on top in the right spot. We took the decision in the beginning of the year this strategic decision because we see the long-term value of it and not onetime yet. So for sure, we see the impact in the long term where we see more repeatable business coming and much more visibility ARR revenue. Going forward, the European market, as I mentioned, they are a little bit behind North America. Therefore, we see the delay in the revenue. We do not see any avoiding doing deal just prolongation of time. And the macroeconomic as we mentioned, Alex, earlier, this is onetime period that will disappear in, let’s say, in the year from something like that, but this is not something which will stay because we see the demand. So moving to the SaaS for sure we give us upside year number two, three going forward from the recurring revenue after the implementation.

Dylan Becker: Okay. Great. And then maybe kind of a segue with that to the initial ’25 outlook of low single digits. Maybe give us a sense kind of breaking down if we look at obviously the post-production piece and some of the ARR components still growing nicely kind of in that double-digit clip, assuming that moving to the cloud has some services impact as well, too. So maybe if we can kind of dissect win those components, given the fact that, again, you called out some incremental visibility on the subscription once those customers are implemented in live? Thanks.

Roni Giladi: I will try to answer this from different but very similar angle. If we look at the revenue reported between two sectors, the first one is the revenue, which is recurring and re-occurring versus the onetime. We see the ratios, the recurring and re-occurring growing. Today, it’s more than 70% of the revenue of the company. We see the gross margin, which is significantly higher than the implementation, all of this is a good trend. We saw the growth rate which is much higher than the revenue growth of the company. This quarter was 15% versus 5%. So I’m not sure that we’ll make the exact numbers for sure that this type of nature will continue with us going forward into 2025.

Dylan Becker: Okay. Thanks, Roni.

Operator: The next question is from Surinder Thind of Jefferies. Please go ahead.

Surinder Thind: Thank you. Just another follow-up on the transition of clients to the SaaS model here. Is the idea that most of these headwinds should be done 2025 or are we talking about an extended time frame to get everybody into the product dispute?

Roni Giladi: Not sure I got the question clearly. The impact of transition to SaaS is not only for 2024 and 2025. Remember that we are doing two steps. First of all, we are — any new deal is on the SaaS and usually, the implication of the new deals is between two to three years the period of the implementation. And there is another factor which is transferring existing customer that we sold several years ago also the SaaS. And this time period is around five years because it takes time to convert existing customers that we saw several years ago to the cloud. So it’s between two to five years. This is the time frame of the impact. Again, with different percentage of impact, but this is the time frame.

Surinder Thind: So understood on the time. So I guess my question, to clarify that is the actual revenue headwind impact? Is that going to be continuing for the next two to five years, that was the question?

Roni Giladi: Yes, but not at the same ratio, meaning if we see more impact in 2025 and potentially ’26, but lower in going forward.

Surinder Thind: Understood. And then in terms of just — it sounds like the margins are going to be relatively intact at this point. In light of the lighter revenues, has there been an adjustment in terms of your spend, your willingness to spend and maybe some of the projects that you’re working on or how should we think about that?

Roni Giladi: Can you please repeat the question?

Surinder Thind: In terms of internal investments.

Roni Giladi: The investment in the – okay, so until now, Sapiens has been able to grow revenue and profit year-to-year. And if we look at our competitor, their profitability level is lower than us. We took a strategic decision to stop the increase of the percentage but to grow on the profit level. And with the additional profit, we’d like to increase investments in sales and marketing and also in R&D, for example, what Alex mentioned about the platform. And you can see from the report, the investment in sales and marketing grew very significantly over the last year, I think, $2 million quarter compared to quarter, and we maintain the profit margin, what we mentioned beginning of the year between 18.1% to 18.5%. We see right now 18.3% in Q3 of 2024. So we’d like to remain with the same percentage but grow the profit level.

Surinder Thind: Thank you.

Operator: The next question is from Alexei Gogolev of JPMorgan. Please go ahead.

Elyse Kanner: Hi. This is Elyse Kanner on for Alexei Gogolev. Maybe this is in the press release, but what is the one constant currency growth? Or did you break that out this quarter?

Roni Giladi: The impact of the currency exchange was very minimal, and we do not see additional impact in terms of positive downside from this revenue reported.

Elyse Kanner: Okay. Great. And then for a follow-up, you’ve talked about some of the initiatives you’re undertaking to better compete in P&C in North America. What’s the time line on those investments? And could growth potentially accelerate here come 2026 or when do you think that reacceleration would take event?

A – Alex Zukerman: So this is Alex here. The – we look – we invest in the platform concept globally at Sapiens. So it’s an approach and a technology framework that allows us to promote multiple products and bring value to multiple offerings. As I said, we chose to focus first of all, the spearhead of this investment in realization is on our Life solution that grows very rapidly and on our P&C in EMEA and APAC, which also we see the growth there. The second stage of taking this investment and implementing it to the offering, it’s for our CoreSuite P&C in North America. And we intend to do it through the first half of the year in 2025. And we do foresee that this will bring us additional competitive power and differentiation in the market. We already launched this proposition. We got very strong market – positive feedback from customers and prospects on the notion and the plan is to implement it in North America in the first half of ‘25.

Elyse Kanner: Got it. Thank you very much.

Operator: The next question is from Tavy Rosner of Barclays. Please go ahead.

Tavy Rosner: Hi. Good afternoon. Most of my questions have been asked already. I just wanted to follow up on one of your comments, Roni, in the prepared remarks, you talked about investment decisions being delayed due to regulatory impact. And I just wanted to dip a little further, is that at the company level or the regulatory level, any type of geography, specifically any customer size, any color would be helpful here.

Alex Zukerman: Yes. This is, again, Alex here. I think we remain cautious that we see in the – maybe the expanded efforts that our customers are doing on the due diligence and checking all the details before signature is mainly around, first of all, the cloud in Europe. The main thing is that we provide a SaaS offering, which is very common in the U.S. It’s also common in Europe but not in the same pace. And there is a lot of cautiousness around embracing a full SaaS proposition in Europe because actually, the company transferred their full management of the business as usual into a vendor into us. So many of them, it’s the first time ever that they do it. And this takes them higher level of checks, they need to get the confidence.

And this is one major thing that we see around the South, and this is mainly European thing. What we see is these companies already experienced that before, it’s much easier, but a lot of them is the first time that they moved to SaaS. And the second part that we see on delays in decision is because we provide now the platform proposition which entails not only core but also digital front and digital processes, data warehouse, reporting AI sold as a bundle. The scope of the deals is larger and the complexity is larger. So it takes a bit more time for the customers to analyze all their due diligence, I contract, etc., of course, this is a substantially different size of a deal. So that would be the two main aspects that we’ve seen in delays.

Tavy Rosner: Thank you. I appreciate the color. That’s all for me.

Operator: [Operator Instructions] There are no further questions at this time. Before I ask Ms. Yaffa Cohen-Ifrah to go ahead with her 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) 269-0005. In Israel, please call (03) 9255-938 and internationally, please call (972) 3-9255-938. Ms. Cohen-Ifrah, please make your concluding statements.

Yaffa Cohen-Ifrah: Thank you for joining our call today. We look forward to discussing our Q4 results on our next earnings call. As always, we welcome you to contact us if you have any further questions. Thank you again.

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