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Sapiens Reports Fourth Quarter 2023 Financial Results

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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

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.

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.

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.

Sapiens International Corporation Logo

 

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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Cision View original content:https://www.prnewswire.com/news-releases/sapiens-reports-fourth-quarter-2023-financial-results-302065964.html

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%.

Sapiens International Corporation N.V. Common Shares (Cayman Islands)

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