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Edited Transcript of SPNS earnings conference call or presentation 4-Nov-19 2:30pm GMT

Q3 2019 Sapiens International Corporation NV Earnings Call

Rehovot Nov 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Sapiens International Corporation NV earnings conference call or presentation Monday, November 4, 2019 at 2:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Roni Al-Dor

Sapiens International Corporation N.V. - President, CEO & Director

* Roni Giladi

Sapiens International Corporation N.V. - CFO & VP

* Yaffa Cohen-Ifrah

Sapiens International Corporation N.V. - CMO & Head of Corporate Communications

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Conference Call Participants

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* Bryan C. Bergin

Cowen and Company, LLC, Research Division - Director

* Dylan Douglas Carden

William Blair & Company L.L.C., Research Division - Analyst

* Mayank Tandon

Needham & Company, LLC, Research Division - Senior Analyst

* Tavy Rosner

Barclays Bank PLC, Research Division - Head of Israel Equities Research

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation's Third Quarter 2019 Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded, November 4, 2019.

It is now my pleasure to introduce your Ms. Yaffa Cohen-Ifrah, Sapiens' CMO and Head of Corporate Communications. Thank you, Ms. Cohen. You may now begin.

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Yaffa Cohen-Ifrah, Sapiens International Corporation N.V. - CMO & Head of Corporate Communications [2]

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Thank you, and good day, everyone. Our quarterly earnings release was issued before the market opened this morning, and it has been posted on the company's website at www.sapiens.com.

Representing Sapiens today are Roni Al-Dor, President and CEO; and Roni Giladi, our CFO.

Before we start, I would like to remind everyone that this conference call may contain projections or other forward-looking statements, and 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 view or expectations or otherwise.

During the course of today's call, we will refer to non-GAAP financial measures. A reconciliation schedule showing GAAP versus non-GAAP result has been provided in our press release issued before the market opened this morning.

A replay of this call will be available after the call on our Investor Relations section of the company website or via the website link, which is available in the earnings release that we published today.

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

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

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Thank you, Yaffa, and thank you for joining us today to review our third quarter 2019 financial results. We enter to the second half of 2019 with a strong pipeline of business, and our momentum continued to build going into year-end.

The outstanding third quarter results demonstrated continued solid execution against our 2019 priorities of top line growth and margin expansion. Top line non-GAAP revenue in Q3 2019 increased 12.8% year-over-year, primarily due to the expansion in our P&C division and initial growth in our life & annuity division. A global focus on our key objective to leverage our offshore capabilities along with improved economies of scale drove a non-GAAP operating margin improvement of 240 basis points versus Q3 2018.

We continue to invest in our North America segment, which is strengthening our pipeline for next year and improving our capability to deliver on current projects.

The outlook for our industry remains robust, and we are benefiting from global industry trends that is driving our growth. This includes, first and foremost, technology and digitalization, which are the overriding drivers, touching all aspects of the insurance industry. Second, consumer expectation for streamlined interfaces and digital access.

As we engage in renewed M&A activity, we are looking to add capabilities, customers and penetrate into new geographics.

We are confident that we have the platform to support the long-term top line growth with infrastructure that can cost-effective scale and support our long-term profitability.

Meanwhile, Sapiens has demonstrated a solid track record of acquisitions that have accelerated top line growth and improve our margin through both synergies and scales.

We have proven our ability to successfully integrate acquisition and improve the operational performance of the combined entities. Through our acquisition strategy, we have increased our technology and digital product suite, build customized solution for our customers and streamlined their offering to their customers and provide digital solution, analytics and increase our global footprint. Our recent acquisition of Calculo, a leading insurance software solutions and services providers for the Spanish market, will expand our footprint in Europe. Spain is the 15th largest economy in the world and fifth largest in Europe. Calculo's team of experts, one of the largest insurance systems teams in Spain, and their impressive customer base that includes several blue-chip companies, will help Sapiens to continue its global expansion.

A leading industry research expert, Juan Mazzini for Celent, see this as a perfect time to enter to the barren market, and he anticipated this market will invest in new system in the near future.

This acquisition is a model for our M&A growth strategy on all fronts. It enabled us to expand geographically, grow our customer base and add a talent team of experts as well as complementary capabilities and services for our portfolio. Product innovation is a key differentiator for Sapiens and forms the basic of our appeal to our global customer base, as does our commitment to serve as a one-stop shop for a full set of solutions.

In order to bridge the innovation gap between insurance provider and insured company, Sapiens continued to expand its ecosystem. During the quarter, we have expanded our solution set with Kovrr, a predictive cyber-risk modeling firm, that provide global insurance, real-time data driven insight into the cyber-risk exposure to help them to meet new regulatory requirements and avoid potentially large policy losses.

Recently, we expanded our partner ecosystem with FRISS, an automated fraud detection and risk assessment leader for P&C insurance industry.

Both solutions make innovation in insurtech solution easily available to our insurance care customer. I'm happy to share with you that in the report that was published 2 weeks ago, Sapiens was recognized, again, a leader in Gartner Magic Quadrant for nonlife insurance platform in Europe for Sapiens' IDIT suite. Gartner stated that one of Sapiens' strength was with our digital division. We established several partnerships with insurtech to include use case of emerging technology, for example, machine learning, IoT and blockchain, and that the partnerships developed by us will enable insurers to trail the technology more quickly.

Moving to the deal front. In the third quarter, we closed new business in P&C as well as Life, Pension. We are to go live and expand our partnership ecosystem.

In Europe, we are very pleased to add MSV Life, Malta's largest life insurance company to our growing customer base family. MSV Life chose Sapiens to decommission their legacy system and transform their businesses with Sapiens' innovative core suite, which will reduce time to market and costs for future product rollouts. Our Life & Pension core suite, cloud-based AgentConnect and Sapiens' Intelligent Analytics will allow MSV rapidly digitalize and make wholesale change without disrupting their core businesses.

Last month, we announced partnership with Atos, a global leader in digital transformation, with 120,000 employees in 73 countries. Sapien's consolidation method will be enhanced by Atos' innovating services and business process outsourcing. This will allow our European customers to manage their legacy portfolio with a wide range of Life & Pension products. By consolidation our services onto 1 platform, Atos will dramatically reduce cost and increase efficiency. This new partnership already gained U.K. customer for Sapiens' software solution.

This quarter, our customer Dentists' Provident, a leading provider of income protection insurance in U.K. and Ireland, successfully deployed our core suite for Life & Pension, and implemented our CustomerConnect, with the goals of providing streamlined processing, improve efficiency and enhanced customer services.

Sapiens and Dentists' Provident work closely to ensure a smooth migration and implementations.

Another go-live in the quarter was S1 Medical, a firm that provides unique niche programs to casualty market in U.S. with the launch of Sapiens' GO for Workers' Compensation.

This was a busy quarter on the marketing and brand awareness front. Sapiens' team exhibited in the trade shows worldwide, including the African Insurance Exchange in Sun City, InsureTech Connect in Las Vegas and NAMIC Annual Convention in National Harbor.

This year, we teamed the Sapiens' Client conference, the art of innovation.

In September, we hosted Sapiens Summit 2019, our annual U.S. client conference. Over 426 participants from approximately 174 organizations attended summit this year. Participants, including insurance and financial services customers, prospect and as well as industry expert and insurtech partners. The agenda included strategic discussion, presentation of highlights industry development and Sapiens' future vision.

On October, we hosted our Global Client Conference in Rome. More than 150 participants from approximately 33 organization, including insurance and financial services customer and prospects, discussed the future of insurance industry trend and Sapiens' strategy and vision. We anticipate a strong finish to the year, with a strong balance sheet and expanding portfolio of product and solution offering to meet the end-to-end needs of our clients.

Offshore capability to support our growth and growing global footprint. Sapiens is well positioned to deliver long-term sustainable growth. I would like to extend my appreciation to the global Sapiens' team for their dedication and passion in their work.

I would now 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 [4]

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Thank you, Roni. I will begin my commentary with a review of the third quarter non-GAAP results, followed by comments on the balance sheet, cash flow and end with our 2019 revised outlook.

Revenue in the third quarter of 2019 totaled $82.6 million, up 12.8% from the third quarter of 2018.

Our revenue in North America totaled $44.4 million, an increase of 20.9% compared to last year.

Revenue in Europe totaled $30.3 million, a 1.1% decrease compared to last year. Revenue in Europe declined compared to last year due to the impact of customer go-lives and currency impact.

The 12.8% revenue growth this quarter represents pure organic growth and was negatively impacted by currency fluctuations.

Our P&C segment continues to grow quarter-over-quarter, and we start to see initial growth in our life & annuity segment in the third quarter.

Moving to gross profit. Gross profit this quarter totaled $36.7 million compared to $30.9 million in Q3 of last year.

Our gross margin this quarter increased to 44.4% from 42.2% in the third quarter of last year. The improvement of 220 basis points compared to last year is mainly due to our offshore operation. To give an indication, our India delivery offshore doubled in the last year to support our growth.

We have demonstrated improvement in both gross profit and gross margin in the last several quarters and plan to continue to improve it in the future.

Moving to operational costs. In the third quarter, we continued our investment in R&D to maintain our product leadership. R&D investments this quarter totaled $11 million as compared to $9.7 million in the same period of last year and $10.5 million in Q2 of 2019. R&D investment remained approximately 13.3% of total revenue.

SG&A expenses totaled $12.2 million compared to $11 million last year and $11.7 million in the prior quarter.

Operating margin improved continuously and totaled $13.5 million this quarter, compared to $10.3 million in Q3 of 2018 and $12.6 million in the prior quarter. This quarter, for the first time, we passed the 16% operating margin benchmark and reached record high margin of 16.4%, improvement of 240 basis points compared to last year. While revenue grew this quarter, 12.8%, operating profit grew 31.7%, demonstrating our effort to grow in efficient and profitable way.

During the past several quarters, all major Sapiens' currencies, new Israeli shekel, euro, pound negatively impacted our results, while Indian rupee remained stable.

Excluding currency impact, our operating margin will be over 17% with currency as of Q3 of last year. Our adjusted EBITDA margin this quarter reached 17.6% compared to 15.3% last year. Financial expenses this quarter totaled $261,000. The financial expenses this quarter included $630,000 interest expenses on our debenture. That was offset by financial income from hedging transaction to protect our profitability. We do not expect to have this income next quarter.

Tax expenses this quarter increased to $2.8 million as compared to $1.7 million of last year, with effective tax rate of 20.9%.

Net income attributed to Sapiens' shareholders for the quarter was $10.4 million or $0.21 per diluted share compared to $7.5 million or $0.15 per diluted share in the third quarter of last year.

Turning to our balance sheet. As of September 30, 2019, we had cash and cash equivalents of $73.1 million. The balance of our Series B Debenture at the end of the quarter is $68.7 million and will be paid in equal annual installments over the next 7 years.

Our adjusted free cash flow, which reflects the cash flow generated from ongoing business totaled $16.3 million compared to adjusted free cash flow of $4.2 million in Q3 of 2018 and $14.6 million in the previous quarter. The increase in adjusted free cash flow is an indication to our continuous improvement in our operational profitability and reduction in diesel.

This quarter, we had onetime cash payment of approximately $6.3 million related to our investment in new campus in India.

In the last day of the quarter, we completed acquisition of Calculo. While we did not have an impact on the P&L at all, our balance sheet included Calculo balance sheet items with an overall minimal impact.

I would like to turn now to our guidance for 2019. Revenue. Looking out to the remainder of the 2019, we anticipate continuing with our organic growth momentum. And following the acquisition of Calculo, we expect to see an increase in revenue due to the first time P&L consolidation.

We are increasing our full year 2019 non-GAAP revenue to the range of $323 million to $325 million compared to previous guidance of the higher end of $318 million to $323 million.

Operating profit. Looking at our Q4 margin, we expect Sapiens' stand-alone operating margin to improve compared to Q3 2019. However, due to the acquisition of Calculo, our Q4 consolidated margin will be slightly down from Q3 record margin. That being said, we are increasing the guidance for the full year 2019 non-GAAP operating margin to the range of 15.8% to 16% compared to our previous guidance of 15.6% to 15.8%.

On the M&A front, as Roni said earlier, we just completed the acquisition of Calculo in Spain and started the post-merger integration. We are planning to continue with our effort to find additional companies that fit our strategy, which is geographic expansion, complementary products and customer base.

We continue to look for small to midsize companies with revenue in the range of $5 million to $30 million.

In summary, this quarter, we reported organic revenue growth of 12.8%, operating margin at the level of 16.4% and a strong adjusted free cash flow of $16.3 million.

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 [5]

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Thank you, Roni. For the remainder of the year, we will continue to focus on growth and margin expansion. This is a quarter of solid operating results in which we execute well against our long-term objective of improved shareholder value.

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 & Co.

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

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Congrats on the strong results. So maybe, first for Roni Giladi. I was going to just focus on the numbers to start with in terms of your growth rate. So I think looking at the guidance, it comes out about 16% top line growth in the fourth quarter, Roni. So I know there's some contribution from the acquisition, but how should we think about the growth trajectory going forward, given your pipeline and backlog trends, especially for fiscal '20?

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

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Mayank, thank you for the congrats. We are looking to have the same momentum as we have, building our growing P&C presence in U.S.A. and Europe. The same of -- as we mentioned, initial start of the life & annuity, starting with Europe and moving to the U.S.A. later on. That being said, we'd like to maintain our overall statement. We'd like to have organic growth of the range of 9% to 11% going forward and on top of that, accelerate M&A. Of course, we are trying to achieve more than that, but this is what we are looking forward.

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

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Got it. And then given that Europe's been relatively soft. I know there are some -- maybe a onetime factor in terms of customer go-live issue, and then you mentioned FX headwinds. But just from a 2020 perspective, how do you think growth shakes out between North America and Europe? Is it going to be more evenly split? Or will it still be heavily skewed towards North America versus Europe?

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Roni Giladi, Sapiens International Corporation N.V. - CFO & VP [5]

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The European, as we mentioned, Mayank, again, it's onetime. We expect to see improvement from the next quarter. It was mainly going live and currency effect. As we mentioned, the pound, euro and also new Israeli shekel affected us. Going forward, today, we have stronger pipeline in the States versus Europe. We are seeing right now, higher growth in the States than Europe. This is, again, what we see today.

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

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Got it. And then finally, on margins. If I could just ask you about, again, 2020. I know you're not giving specific guidance, but given the progress you made on the offshoring front and all the leverage that's inherent in the business model, could you talk about the margin and expectations for 2020? Even just qualitatively, if you don't want to give any specific numbers at this point.

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

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Yes, of course. Our midterm 2 years ago was about 17%. And during this year, we said it will be short to midterm 17%. This is what we see right now. This is not the guidance, but this is what we said earlier. That need to be taken into effect the acquisition that we just made. Usually acquisition that we are doing impact the margin, not the profit, but the margin down. So we need to take this into factor. So a stand-alone basis, as I mentioned, this is a target to reaching to 17%, with some slowdown with the acquisition, at least in the first year, which will reduce it slightly.

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

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Roni, just to put you on the spot, can we then think about margins maybe in 2020, get into the upper end of that range that you've guided to, the 15% to 17% with the acquisition lapping at the end of next year? But given, again, some of the levers that you have been putting in place, can we expect margins to maybe get closer to 17% versus the 16% that we're modeling for 2019?

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

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Yes. Then the average of close to 17% seems reasonable.

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Operator [10]

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The next question is from Bhavanmit Suri of William Blair.

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Dylan Douglas Carden, William Blair & Company L.L.C., Research Division - Analyst [11]

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It's Dylan on for Bhavan. I guess I just wanted to start off with a kind of market-macro perspective, have you guys seen any changes? I know you talked about a strong pipeline in North America. I mean have you seen any change or acceleration in adoption for these core system solutions in P&C there? And then how have the cloud conversations trended or picked up over the last 12 months?

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Roni Al-Dor, Sapiens International Corporation N.V. - President, CEO & Director [12]

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No, we continue -- it's Roni Al-Dor, Dylan. We continue to see demand in both P&C in Europe and the States. We see a lot of digital interest for this. And it's -- we are in a good momentum right now.

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Dylan Douglas Carden, William Blair & Company L.L.C., Research Division - Analyst [13]

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Okay, great. And then, I guess, just building off of that as well. I know you guys have focused a lot of your initiatives on North America, building out a new sales team, some sales hires there working on cross-sell initiatives. Can you guys provide any color on how that's gaining traction now that, that's maybe 6 to 9 months down the road and then trending compared to your guys' initial expectations?

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

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Again, this is -- the sales cycle in our business is relatively long, 6 to 12 to 18 months. And also, we decide to look after a higher tier. So definitely, we are building our backlog and pipeline, but it also takes time. But we are in the business for many years. So we know we have also put more effort on the workers' comp business. So it's a big part of the P&C business. So it's also -- it's a big thing, but it also takes time. So the overall, we put all the investments in place. We see -- start to see the fruits of the investment. We are also, in the same times, we built our CC organization, dealing with our client base. We did a very successful client conference in this quarter. So overall, positive. But in this business, things take time.

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Dylan Douglas Carden, William Blair & Company L.L.C., Research Division - Analyst [15]

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Okay, great. And then one last one for me, if I may. Just looking at guidance for the remainder of the year, we had about $1 million beat this quarter. And I know you've mentioned that Calculo is expecting roughly $1 million in revenue for the year. And it sounds like from the higher end maybe a guidance from both $2 million to $3 million, what -- could you elaborate anymore on the plan kind of what (inaudible) driving growth? And then how much of the acquisition played into the guidance raise for the fiscal year?

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

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Dylan, this is Roni Gi. The Calculo acquisition, as we mentioned when we acquired the company, this is a company at the level of about $9 million to $10 million revenue, not growing at the level of flat.

This quarter, we increased the guidance. We continue to grow separately, but we added the additional 1 quarter or even slightly below 1 quarter because December is not productive period into the numbers. So altogether, let's say, about $2 million. The growth that we expect from this region, the Spain, we are planning to have this only in the 2022. 2021 will be to build the pipeline in the organization.

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Operator [17]

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Your next question is from Tavy Rosner of Barclays.

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Tavy Rosner, Barclays Bank PLC, Research Division - Head of Israel Equities Research [18]

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Congrats on the good results. Just a follow-up question, if I may. I mean you guys mentioned the solid marketing efforts you did with your conferences in the U.S. and Europe. And I guess comparing this year's conference to last year's conference, do you feel that there is more interest that, i.e., -- I'm trying to get a sense of your pipeline. You mentioned the long sales cycle. So let's say, 18 months from now, do you feel that we'll be in a much stronger position, i.e., things are picking up, insurance companies want to invest more, they want to transform and get your product faster now than they did a year ago?

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Roni Al-Dor, Sapiens International Corporation N.V. - President, CEO & Director [19]

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We are doing, as you mentioned, a lot of marketing activity. The client conference is mainly to our existing clients. And -- but we are bringing a few prospects from that, that they, again, get the confidence from our existing clients, talk to them, get the confidence and we can see good results after that. And we have the general conference like the big conference in Vegas and all -- many others that we are doing. And definitely, it puts us in a good spot. And we are building our branding and the customers, and we are also positioned very high in the analyst community. So we see positive momentum. But again, as I mentioned, everything takes time.

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Tavy Rosner, Barclays Bank PLC, Research Division - Head of Israel Equities Research [20]

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Yes, I appreciate it. And then your competitors often talk about moving from perpetual to term and cloud. Those are all the sexy names. And I guess when do you think that Sapiens will be ready to start disclosing? Start breaking it down, cloud revenues, term versus perpetual, where are we? Are we early stage? Or -- where are we on that journey?

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Roni Giladi, Sapiens International Corporation N.V. - CFO & VP [21]

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This is Roni Gi. First of all, we are at -- we are early in this journey, but we are investing in this a lot. You mentioned the cloud. We opened infrastructure to move people on the AWS, Azure infrastructure. We are building team in offshore location to be more profitable in that area. These things take time.

On the sales side, I can say that all the new deals that we are getting, all the RFP that we are getting from the States, about 50% of them are cloud requested, and we are being able to answer this demand. Europe is slightly less than this. We are talking about 30% of the new deals that we are signing. So now moving forward with that, full speed. But these things take time. And only we are building the new layer. The existing layer is obviously on the different infrastructure.

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Tavy Rosner, Barclays Bank PLC, Research Division - Head of Israel Equities Research [22]

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And as a follow-on to that, I mean, let's say, we're not talking about cloud, but even on-prem, you would say, what percentage of new contracts or at least RFPs are for -- are still for perpetual? Do you still have those or new contracts are on term one?

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

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Starting from 2019, we took a management decision that all deal will be on the term license moving from perpetual license. We started it, implemented it. I can say that majority of the deals that we are planning today are term licensed. We will not lose the customer because of that, but we are significantly moving into term.

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Operator [24]

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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 - Director [25]

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Wanted to ask on the life & annuity business. You commented here on initial growth. Can you give us a sense of the scale of that? How we should be thinking about growth from here in that product base? And then just can you remind us the scale of that business today?

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Roni Giladi, Sapiens International Corporation N.V. - CFO & VP [26]

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Bryan, this is Roni Gi. Today, the life & annuities represent about, I would say, 20% of the business, slightly more. We are seeing initial growth. It's not significant, but we see the trend. We talked about in the last 2 years that this is in the claim mode, customers going live, and there is no new business coming in. So right now, we see initial. It's small amount right now. But for sure, the initial target for this was stabilization, we may exceed it. So this is #1. We mentioned this quarter about 2 deals. One of them was in U.K., the Atos and the other one was MSV Life. I think 2 things that on the life side that give us momentum. And also, we see a nice pipeline building. By the way, also small ones in the States and in Europe to build this growth future. We are not giving guidance for this by vertical. But for sure, we'll see change in the trend.

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Bryan C. Bergin, Cowen and Company, LLC, Research Division - Director [27]

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Okay. Sounds good. And then as far as Europe goes, can you just comment on the outlook there? Really the client tone and the pace of decision-making? And then I don't know if you scale this, but what was the FX impact? Whether it's just in Europe or the overall company on revenue?

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

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Yes. The majority of the FX was in Europe, a few percentage points for the European one, 3% to 4%. Then this with additional going live on the European side, I think we will see from the next quarter increase in the revenue in Europe.

We do not see any delay in decision because of the Brexit or things like that. We are very strong today in the U.K., Nordic. We'd like to expand in this region in Europe. I think we completed Calculo, this is one area for us for growth. Again, as we mentioned, we're planning to see growth there in 2022. And as we mentioned earlier, we are still moving ahead with M&A front to establish or expand our presence in Europe.

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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) 295-2634. In Israel, please call 03-925-5901. And internationally, please call 9 (723) 925-5901. Mr. Al-Dor, would you like to make your concluding statements?

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

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Thank you to operator. And thank you to all the participants for joining us on today's call. Have a good day.

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Operator [31]

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Thank you. This concludes the Sapiens International Corporation's Third Quarter 2019 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.