Sapiens Reports Fourth Quarter 2023 Financial Results

Rhea-AI Summary

Sapiens International Corporation (SPNS) announces strong financial results for Q4 2023 and full year 2023 with revenue growth of 9.5% and 8.4% respectively. Gross profit and operating income also show significant increases. The company's President and CEO highlights successful execution of growth strategy and expansion in North American and European markets.

Positive

• Revenue for Q4 2023 increased by 9.5% to $130.9 million compared to $119.5 million in Q4 2022.
• Gross profit for Q4 2023 rose by 11.2% to $55.9 million from $50.3 million in Q4 2022.
• Operating income for Q4 2023 saw a significant growth of 21.9% to $20.1 million compared to $16.5 million in Q4 2022.
• Net income for Q4 2023 increased by 27.0% to $17.0 million from $13.4 million in Q4 2022.
• Diluted EPS for Q4 2023 grew by 25.0% to $0.30 compared to $0.24 in Q4 2022.
• Full year 2023 revenue increased by 8.4% to $514.6 million compared to $474.7 million in 2022.
• Full year 2023 operating income showed a significant growth of 18.6% to $78.9 million compared to $66.5 million in 2022.
• Full year 2023 net income increased by 18.7% to $62.4 million from $52.6 million in 2022.
• Full year 2023 diluted EPS grew by 17.9% to $1.12 compared to $0.95 in 2022.
• Sapiens' President and CEO, Roni Al-Dor, highlighted the company's successful execution of growth strategy, achieving 8.4% revenue growth in 2023 and significant profit increases.

Negative

• None.

Insights

Financial Analyst

The reported financial results of Sapiens International Corporation showcase a positive trajectory, with both GAAP and non-GAAP revenues, gross profits and net incomes witnessing an uptick. Notably, the GAAP net income saw a significant increase of 27.0% in Q4 and 18.7% for the full year, which is a robust indicator of financial health and operational efficiency. The gross margin expansion, although modest, suggests improved cost management. Investors should note that the operating margin improvement points to effective control over operational costs relative to revenue growth.

From an investment perspective, the increase in diluted earnings per share (EPS) is particularly relevant, as it directly affects shareholder value. The double-digit growth in EPS is likely to be viewed favorably by the market. Moreover, the 13.5% growth in Annual Recurring Revenue (ARR) is a critical metric for sustainability and predictability of future earnings, which is highly regarded by investors, especially in the software industry where Sapiens operates.

Market Research Analyst

Examining Sapiens' performance within the software solutions market for the insurance industry, the 8.4% non-GAAP revenue growth and the reported expansion in market share are indicative of the company's competitive positioning. The successful go-live implementations and growth in North American and European markets suggest that the company's product offerings are resonating with clients in these regions. This is significant given the competitive landscape and the ongoing digital transformation in the insurance sector.

For stakeholders, the geographical expansion and market share growth present a potential for increased market penetration and customer base diversification. This could lead to a more resilient business model capable of weathering regional economic fluctuations. However, stakeholders should also consider industry-specific risks such as regulatory changes or technology disruptions that could affect Sapiens' future performance.

Economist

The financial results of Sapiens International Corporation may be reflective of broader economic trends affecting the global software and insurance industries. The company's growth amidst economic uncertainties could signal a strong demand for insurance technology solutions, potentially driven by increased digitalization efforts within the industry. The operating margin improvement is particularly noteworthy in an environment where many companies are facing margin pressures due to rising costs.

It is also pertinent to analyze the sustainability of Sapiens' growth rate in the context of global economic conditions. While current performance is strong, macroeconomic factors such as interest rate changes, currency fluctuations and economic slowdowns could impact future results. Investors and stakeholders should monitor these variables closely as they can influence the company's operational costs and international revenue streams.

HOLON, Israel, Feb. 20, 2024 /PRNewswire/ -- Sapiens International Corporation, (NASDAQ: SPNS) (TASE: SPNS), a leading global provider of software solutions for the insurance industry, today announced its financial results for the fourth quarter ended December 31, 2023.

 

Summary Results for Fourth Quarter 2023 (USD in millions, except per share data)
	GAAP			Non-GAAP
	Q4 2023	Q4 2022	% Change	Q4 2023	Q4 2022	% Change
Revenue	$130.9	$119.5	9.5 %	$130.9	$119.5	9.6 %
Gross Profit	$55.9	$50.3	11.2 %	$59.4	$53.8	10.4 %
Gross Margin	42.8 %	42.1 %	70 bps	45.4 %	45.0 %	40 bps
Operating Income	$20.1	$16.5	21.9 %	$24.2	$21.1	14.7 %
Operating Margin	15.4 %	13.8 %	160 bps	18.4 %	17.6 %	80 bps
Net Income (*)	$17.0	$13.4	27.0 %	$20.1	$18.0	11.4 %
Diluted EPS	$0.30	$0.24	25.0 %	$0.36	$0.32	12.5 %

 

 

Summary Results for Full Year end 2023 (USD in millions, except per share data)
	GAAP		% Change	Non-GAAP		% Change
	2023	2022		2023	2022
Revenue	$514.6	$474.7	8.4 %	$514.8	$474.8	8.4 %
Gross Profit	$219.6	$200.2	9.7 %	$233.0	$213.5	9.1 %
Gross Margin	42.7 %	42.2 %	50 bps	45.3 %	45.0 %	30 bps
Operating Income	$78.9	$66.5	18.6 %	$94.1	$83.5	12.8 %
Operating Margin	15.3 %	14.0 %	130 bps	18.3 %	17.6 %	70 bps
Net income (*)	$62.4	$52.6	18.7 %	$75.0	$67.2	11.7 %
Diluted EPS	$1.12	$0.95	17.9 %	$1.35	$1.21	11.6 %
(*) Attributable to Sapiens' shareholders

 

Roni Al-Dor, President and CEO of Sapiens, stated, "In 2023, Sapiens executed its growth strategy across our regions and product lines, achieving an 8.4% growth in non-GAAP revenue and bolstering non-GAAP operating profit by an impressive 12.8%. Our ARR in the fourth quarter was $164.8 million, a growth of 13.5% compared to the fourth quarter of 2022.

Our North American and European businesses have shown robust growth, and we are well-positioned to sustain growth in these markets in 2024. We completed multiple successful go-lives globally and demonstrated noteworthy expansion of our market share by signing about 30 new deals with both new and existing customers across core, Data, digital, and cloud in P&C, Workers' Comp, Life, and Reinsurance. Furthermore, we anticipate continued momentum and growth with new logos and cross-selling opportunities within our existing accounts across all regions throughout 2024."

"Key initiatives that will guide our strategic direction in 2024 include our continued transition to SaaS with all our products, with our evolved Sapiens Insurance Platform, an end-to-end integrated business-led SaaS platform with advanced technology and data capabilities," continued Mr. Al-Dor. "In North America, EMEA, and APAC, we are increasing our headcount across sales, marketing, and product marketing to drive success. We remain focused on further expansion in North America, leveraging our investments in the region, and increasing our market share in Europe where we have a strong footprint."

"We are introducing 2024 guidance for non-GAAP revenue in a range of $550 million to $555 million, and non-GAAP operating margin in a range of 18.1% to 18.5%," concluded Mr. Al-Dor.

Quarterly Results Conference Call

Management will host a conference call and webcast on February 20, 2024, at 9:30 a.m. Eastern Time (4:30 p.m. in Israel) to review and discuss Sapiens' results. Please call the following numbers (at least 10 minutes before the scheduled time) to participate:

North America (toll-free): 1-888-642-5032
International: 972-3-9180609
UK: 0-800-917-5108

The live webcast of the call can be viewed on Sapiens' website at: https://www.sapiens.com/investor-relations/ir-events-presentations. A replay of the call will be available one business day following the completion of the event, at the same link for 90 days.

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: non-GAAP revenue, ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributed to Sapiens shareholders, non-GAAP basic and diluted earnings per share, Adjusted EBITDA and Adjusted Free Cash-Flow.

Sapiens believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Sapiens' financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing the Company's financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: Valuation adjustment on acquired deferred revenue, amortization of capitalized software development and other intangible assets, capitalization of software development, stock-based compensation, compensation related to acquisition and acquisition-related costs, restructuring and cost reduction costs, and tax adjustments related to non-GAAP adjustments.

Management of the Company does not consider these non-GAAP measures in isolation, or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations, as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures.

To compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Sapiens urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business.

Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables of this release.

The Company defines Annual Recurring Revenue ("ARR") as the annualized value of our revenue from customer subscriptions, term licenses, maintenance, application maintenance, and cloud solutions. The ARR run rate is equal to the product of (i) the sum of these revenues in our most recently completed fiscal quarter, multiplied by (ii) four.

The Company defines Adjusted EBITDA as net profit, adjusted to eliminate valuation adjustment on acquired deferred revenue, stock-based compensation expense, depreciation and amortization, capitalization of software development costs, compensation expenses related to acquisition and acquisition-related costs, restructuring and cost reduction costs, financial expense (income), provision for income taxes and other income (expenses). These amounts are often excluded by other companies as well, in order to help investors understand the operational performance of their business.

The Company uses Adjusted EBITDA as a measurement of its operating performance, because it assists in comparing the operating performance on a consistent basis by removing the impact of certain non-cash and non-operating items. Adjusted EBITDA reflects an additional way of viewing aspects of the operations that the Company believes, when viewed with the GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting its business. The Company uses Adjusted Free Cash-Flow as a measurement of its operating performance, and reconciles cash-flow from operating activities to Adjusted Free Cash-Flow, while reducing the amounts for capitalization of software development costs and capital expenditures. The Company adds back cash payments made for former acquisitions in respect of future performance targets and retention criteria as determined upon acquisition date of the respective acquired company, which were included in the cash-flow from operating activities. We believe that Adjusted Free Cash-Flow is useful in evaluating our business, because Adjusted Free Cash-Flow reflects the cash surplus available to fund the expansion of our business.

About Sapiens

Sapiens International Corporation (NASDAQ and TASE: SPNS) empowers the financial sector, with a focus on insurance, to transform and become digital, innovative and agile. Backed by more than 40 years of industry expertise, Sapiens offers a complete insurance platform, with pre-integrated, low-code solutions and a cloud-first approach that accelerates customers' digital transformation. Serving over 600 customers in 30 countries, Sapiens offers insurers across property and casualty, workers compensation and life markets the most comprehensive set of solutions, from core to complementary, including Reinsurance, Financial & Compliance, Data & Analytics, Digital, and Decision Management.  For more information visit www.sapiens.com or follow us on LinkedIn.

Investor and Media Contact   Yaffa Cohen-Ifrah Chief Marketing Officer and Head of Investor Relations, Sapiens Yaffa.cohen-ifrah@sapiens.com +1 917-533-4782	Investors Contact   Kimberly Rogers Managing Director, Hayden IR +1 541-904-5075 kim@HaydenIR.com

 

Forward Looking Statements

Certain matters discussed in this press release that are incorporated herein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words "anticipate," "believe," "estimate," "expect," "may," "will," "plan" and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers' systems; risks related to the insurance industry in which our clients operate; risks associated with our global sales and operations, such as changes in regulatory requirements, wide-spread viruses and epidemics like the recent novel coronavirus pandemic, which adversely affected our results of operations, or fluctuations in currency exchange rates; and risks related to our principal location in Israel and our status as a Cayman Islands company. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading "Risk Factors" in our most recent Annual Report on Form 20-F, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, to conform these statements to actual results or to changes in our expectations.

             

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
U.S. dollars in thousands (except per share amounts)
			Three months ended				Year ended
			December 31,				December 31,
			2023		2022		2023		2022
			(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenue			130,859		119,463		514,584		474,736
Cost of revenue			74,910		69,158		294,990		274,573
Gross profit			55,949		50,305		219,594		200,163
Operating expenses:
	Research and development, net		16,084		15,251		63,475		58,656
	Selling, marketing, general and administrative		19,776		18,573		77,251		75,016
Total operating expenses			35,860		33,824		140,726		133,672
Operating income			20,089		16,481		78,868		66,491
Financial and other expenses (income), net			(560)		(1,097)		1,750		941
Taxes on income			3,624		4,276		14,251		12,619
Net income			17,025		13,302		62,867		52,931
Attributable to non-controlling interest			52		(65)		423		336
Net income attributable to Sapiens' shareholders			16,973		13,367		62,444		52,595
Basic earnings per share			0.30		0.24		1.13		0.95
Diluted earnings per share			0.30		0.24		1.12		0.95
Weighted average number of shares outstanding used to  compute basic earnings per share (in thousands)			55,733		55,140		55,372		55,117
Weighted average number of shares outstanding used to  compute diluted earnings per share (in thousands)			55,910		55,521		55,721		55,570

 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except per share amounts)
		Three months ended				Year ended
		December 31,				December 31,
		2023		2022		2023		2022
		(unaudited)		(unaudited)		(unaudited)		(unaudited)
GAAP revenue		130,859		119,463		514,584			474,736
Valuation adjustment on acquired deferred revenue		55		23		220			92
Non-GAAP revenue		130,914		119,486		514,804			474,828
GAAP gross profit		55,949		50,305		219,594			200,163
Revenue adjustment		55		23		220			92
Amortization of capitalized software		1,501		1,517		5,775			5,840
Amortization of other intangible assets		1,865		1,929		7,396			7,375
Non-GAAP gross profit		59,370		53,774		232,985			213,470
GAAP operating income		20,089		16,481		78,868			66,491
Gross profit adjustments		3,421		3,469		13,391			13,307
Capitalization of software development		(1,543)		(1,238)		(6,518)			(6,097)
Amortization of other intangible assets		1,169		1,115		4,403			4,783
Stock-based compensation		698		759		3,658			3,960
Acquisition-related costs (*)		318		472		339			1,033
Non-GAAP operating income		24,152		21,058		94,141			83,477
GAAP net income attributable to Sapiens' shareholders		16,973		13,367		62,444			52,595
Operating income adjustments		4,063		4,577		15,273			16,986
Taxes on income		(955)		78		(2,693)			(2,411)
Non-GAAP net income attributable to Sapiens' shareholders		20,081		18,022		75,024			67,170
(*) Acquisition-related costs pertain to charges on behalf of M&A agreements related to future performance targets and  retention criteria, as well as third-party services, such as tax, accounting and legal rendered until the acquisition date.

 

 

Adjusted EBITDA Calculation
U.S. dollars in thousands
		Three months ended				Year ended
		December 31,				December 31,
		2023		2022		2023		2022
GAAP operating profit		20,089		16,481		78,868		66,491
Non-GAAP adjustments:
Valuation adjustment on acquired deferred revenue		55		23		220		92
Amortization of capitalized software		1,501		1,517		5,775		5,840
Amortization of other intangible assets		3,034		3,044		11,799		12,158
Capitalization of software development		(1,543)		(1,238)		(6,518)		(6,097)
Stock-based compensation		698		759		3,658		3,960
Compensation related to acquisition and  acquisition-related costs		318		472		339		1,033
Non-GAAP operating profit		24,152		21,058		94,141		83,477
Depreciation		1,115		1,034		3,865		4,242
Adjusted EBITDA		25,267		22,092		98,006		87,719

 

 

Summary of NON-GAAP Financial Information
U.S. dollars in thousands (except per share amounts)
	Q4 2023		Q3 2023		Q2 2023		Q1 2023		Q4 2022
Revenues	130,914		130,760		128,354		124,776		119,486
Gross profit	59,370		59,260		57,992		56,363		53,774
Operating income	24,152		24,058		23,417		22,514		21,058
Adjusted EBITDA	25,267		24,777		24,393		23,569		22,092
Net income to Sapiens' shareholders	20,081		19,080		18,610		17,253		18,022
Diluted earnings per share	0.36		0.34		0.33		0.31		0.32

 

 

Non-GAAP Revenues by Geographic Breakdown
U.S. dollars in thousands
	Q4 2023		Q3 2023		Q2 2023		Q1 2023		Q4 2022
North America	54,882		54,848		52,116		50,371		50,801
Europe	65,239		64,662		62,960		64,572		56,910
Rest of the World	10,793		11,250		13,278		9,833		11,775
Total	130,914		130,760		128,354		124,776		119,486

 

 

Non-GAAP Revenue breakdown
U.S. dollars in thousands
	Three months ended				Year ended
	December 31,				December 31,
	2023		2022		2023		2022
Software products and re-occurring post-production services (*)	90,399		77,702		342,156		300,241
Pre-production implementation services (**)	40,515		41,784		172,648		174,587
Total Revenues	130,914		119,486		514,804		474,828
	Three months ended				Year ended
	December 31,				December 31,
	2023		2022		2023		2022
Software products and re-occurring post-production services (*)	48,815		42,120		182,154		161,534
Pre-production implementation services (**)	10,555		11,654		50,831		51,936
Total Gross profit	59,370		53,774		232,985		213,470
	Three months ended				Year ended
	December 31,				December 31,
	2023		2022		2023		2022
Software products and re-occurring post-production services (*)	54.00 %		54.20 %		53.20 %		53.80 %
Pre-production implementation services (**)	26.10 %		27.90 %		29.40 %		29.70 %
Gross Margin	45.40 %		45.00 %		45.30 %		45.00 %
(*) Software products and re-occurring post-production services include mainly subscription, term license, maintenance, application maintenance, cloud solutions,and post-production services. This revenue stream is a mix of recurring and re-occurring in nature.
(**) Pre-production implementation services include mainly implementation services before go-live, which are one-time in nature.

 

Annual Recurring Revenue ("ARR") U.S. dollars in thousands
Three months ended
December 31,
2023		2022
164,840		145,188

 

 

Adjusted Free Cash-Flow
U.S. dollars in thousands
	Q4 2023		Q3 2023		Q2 2023		Q1 2023		Q4 2022
Cash-flow from operating activities	38,646		3,988		14,603		22,188		14,430
Increase in capitalized software development costs	(1,543)		(1,638)		(1,679)		(1,658)		(1,238)
Capital expenditures	(421)		(696)		(775)		(634)		(400)
Free cash-flow	36,682		1,654		12,149		19,896		12,792
Cash payments attributed to acquisition-related costs(*) (**)	221		-		-		30		1,100
Adjusted free cash-flow	36,903		1,654		12,149		19,926		13,892
(*) Included in cash-flow from operating activities
(**) Acquisition-related payments pertain to payments on behalf of M&A agreements related to future performance targets and  retention criteria, as well as third-party services, such as, tax, accounting and legal rendered until the acquisition date.

 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
U.S. dollars in thousands
			December 31,		December 31,
			2023		2022
			(unaudited)		(unaudited)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents		126,716		160,285
	Short-term bank deposit		75,400		20,000
	Trade receivables, net and unbilled receivables		90,273		93,382
	Other receivables and prepaid expenses		22,514		11,640
	Total current assets		314,903		285,307
LONG-TERM ASSETS
	Property and equipment, net		12,661		12,021
	Severance pay fund		3,605		3,996
	Goodwill and intangible assets, net		317,352		319,661
	Operating lease right-of-use assets		23,557		33,688
	Other long-term assets		17,546		13,671
	Total long-term assets		374,721		383,037
TOTAL ASSETS			689,624		668,344
LIABILITIES AND EQUITY
CURRENT LIABILITIES
	Trade payables		6,291		9,415
	Current maturities of Series B Debentures		19,796		19,796
	Accrued expenses and other liabilities		77,873		76,962
	Current maturities of operating lease liabilities		6,623		9,063
	Deferred revenue		38,541		30,720
	Total current liabilities		149,124		145,956
LONG-TERM LIABILITIES
	Series B Debentures, net of current maturities		39,543		59,275
	Deferred tax liabilities		10,820		11,363
	Other long-term liabilities		11,538		13,312
	Long-term operating lease liabilities		21,084		28,432
	Redeemable non-controlling interest		-		89
	Accrued severance pay		7,568		7,063
	Total long-term liabilities		90,553		119,534
EQUITY			449,947		402,854
TOTAL LIABILITIES AND EQUITY			689,624		668,344

 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
U.S. dollars in thousands
	For the Twelve months ended December 31,
	2023		2022
	(unaudited)		(unaudited)
Cash flows from operating activities:
Net income	62,867		52,931
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	21,439		22,240
Accretion of discount on Series B Debentures	64		85
Capital loss from sale of property and equipment	195		26
Stock-based compensation related to options issued to employees	3,658		3,960
Net changes in operating assets and liabilities, net of amount acquired:
Decrease (increase) in trade receivables, net and unbilled receivables	3,960		(21,860)
Decrease in deferred tax liabilities, net	(3,003)		(10,134)
Decrease (increase) in other operating assets	(5,402)		7,729
Increase (decrease) in trade payables	(3,580)		4,634
Decrease in other operating liabilities	(8,948)		(8,171)
Increase (decrease) in deferred revenues	7,266		(7,738)
Increase in accrued severance pay, net	909		78
Net cash provided by operating activities	79,425		43,780
Cash flows from investing activities:
Purchase of property and equipment	(2,574)		(2,757)
Proceeds from (investments in) deposits	(55,499)		26
Proceeds from sale of property and equipment	48		54
Payments for business acquisitions, net of cash acquired	(8,060)		(3,466)
Capitalized software development costs	(6,518)		(6,097)
Acquisition of intellectual property	(177)		(200)
Net cash used in investing activities	(72,780)		(12,440)
Cash flows from financing activities:
Proceeds from employee stock options exercised	4,809		-
Distribution of dividend	(28,144)		(38,579)
Repayment of Series B Debenture	(19,796)		(19,796)
Acquisition of non-controlling interests	(161)		-
Dividend to non-controlling interest	(47)		-
Net cash used in financing activities	(43,339)		(58,375)
Effect of exchange rate changes on cash and cash equivalents	3,125		(2,923)
Decrease in cash and cash equivalents	(33,569)		(29,958)
Cash and cash equivalents at the beginning of period	160,285		190,243
Cash and cash equivalents at the end of period	126,716		160,285

 

 

Debentures Covenants

As of December 31, 2023, Sapiens was in compliance with all of its financial covenants under the indenture for the Series B Debentures, based on having achieved the following in its consolidated financial results:

Covenant 1 

• Target shareholders' equity (excluding non-controlling interest): above $120 million.
• Actual shareholders' equity (excluding non-controlling interest) equal to $447.3 million.

Covenant 2

• Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for the Company's Series B Debentures) below 65%.
• Actual ratio of net financial indebtedness to net capitalization equal to (46.48)%.

Covenant 3

• Target ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is below 5.5.
• Actual ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is equal to (1.46).

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SOURCE Sapiens International Corporation

FAQ

What was the revenue for Sapiens International Corporation in Q4 2023?

The revenue for Sapiens International Corporation in Q4 2023 was $130.9 million.

How much did the operating income increase in Q4 2023 compared to Q4 2022?

The operating income for Q4 2023 saw a significant growth of 21.9% to $20.1 million compared to $16.5 million in Q4 2022.

What was the net income for Sapiens International Corporation in Q4 2023?

The net income for Sapiens International Corporation in Q4 2023 increased by 27.0% to $17.0 million from $13.4 million in Q4 2022.

Who is the President and CEO of Sapiens International Corporation?

Roni Al-Dor is the President and CEO of Sapiens International Corporation.

What was the revenue growth percentage for Sapiens International Corporation in full year 2023?

The revenue growth percentage for Sapiens International Corporation in full year 2023 was 8.4%.