Sapiens International Corporation NV

NASDAQ:SPNS

Earnings Call Transcript 2018-Q2

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation Second Quarter 2018 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded August 7, 2018.

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

[Yaffa Cohen-Ifrah, executive]

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

Representing the company 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 disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, changes in its views or expectations or otherwise. Also, during the course of today's call, we will refer to non-GAAP financial measures. A reconciliation schedule showing GAAP versus non-GAAP results has been provided in our press release, which was issued before the market opened this morning. A replay of this call will be available after the call on the Investor Relations section of the company's website or via website links that appear in the earning release that we published today.

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

[Roni Al-Dor, executive]

Thank you, Yaffa. Good morning, everyone. I appreciate you joining us today to discuss our second quarter 2018 financial results. Sapiens second quarter again demonstrates solid execution, against our well-defined corporate strategy, delivering another strong quarter. Non-GAAP revenue grew 5%, due mainly to growth in P&C in both U.S. and Europe. We achieved an operational margin of 13.2%, a significant improvement from the prior year. I would like to thank my team worldwide for their hard work in execution to meet our strategic goal, which enable us to deliver these solid results.

We continue to strengthen our competitive advantage with product and solution development, and we successfully integrated new solutions and plans from our position in growth markets, particularly Europe and North America.

As a result, Sapiens today has a global platform of innovation insurance software solutions and services. The results this quarter demonstrate the leverage of these resource to expand our market leadership, particularly in the area with the greatest client demand in insurance markets, digitalization, data analytics, and legacy transformation.

In the second quarter, we continue to advance our key objectives. First, expanding our P&C business in EMEA. In the second quarter, we saw further success in our long-term land-and-expand strategy for P&C in Europe. Sapiens IDIT, our P&C insurance suite, continue to be extremely popular in this strategically important region and it is a flagship product of our businesses.

During the quarter, the Turkish insurance, HDI Sigorta, selected IDIT. It will enable HDI to accelerate its growth through faster time-to-market for its new product initiatives. We are proud of our expanding presence in the region where Sapiens IDIT helped providers comply with the national regulations and stay ahead of their competitors. This market continues to be very active with a strong pipeline and lots of momentum. At the same time, we continue with our investment in the Nordic region, scaling up our operation in order to help us to further development our business in the region and to meet market demand and opportunities. Second, enhancing and expanding our P&C businesses in U.S. Last quarter, we launched a new digital P&C insurance platform for North America to improve our competitive position and accelerate our go-to-market timing with the goal of increasing our market share. We are happy with the successful integration of our recent North America acquisition. StoneRiver and Adaptik customer in our prospect can see the value of Sapiens' new and enhanced insurance offering, and our commitment to the market. We are extremely pleased that Georgia Farm Bureau Mutual Insurance Company expanded its relationship with Sapiens by signing a 5-year agreement for our P&C insurance platform for all of its product line. Georgia Farm Bureau positive experience with StoneRiver and Sapiens product and employee led to its decision to implement our next-generation P&C insurance software platform. Implementation is already underway. In addition, this quarter, SUNZ insurance went into production with Sapiens' Workers' Compensation CompSuite Policy System, which went live in less than 4 months.

Development of our North America business remains a priority. To further our visibility, we participate in a few insurance tradeshows in the market. One of them was the annual IASA event in Nashville, the primary conference for the insurance industry, and our customers. We presented our full U.S. portfolio for the first time and received positive feedback from customers and prospects. Other important wins for North America this quarter include the fifth largest commercial bank in the United States, choosing Sapiens' DECISION to update loan origination process, improve operational efficiency and create new market opportunity.

Third, enhancing our digital offering is another one of our key objectives. Sapiens is continually conducting market research, speaking with our customer about their digital needs and strategic objectives and continue to enhance our digital solution and offering through R&D. The second quarter was not only about working on advancing our strategic objective, we're also fortunate to be recognized and awarded. Integra, a Sapiens IDIT customer, was named a Model Insurance by Celent, a leading research and advisory firm. This award recognized interim -- Integra's successful project to transform, modernize and automated, which benefits its customers. Sapiens' P&C solution, IDIT, won an excellence award in Celent Research EMEA Policy Administration report. Celent recognized Sapiens IDIT for its advanced technology, the fifth time Sapiens IDIT has been recognized in EMEA by Celent. Sapiens Adaptik policy leads the way in helping insurance transform the way they do business. According to a recently issued Celent review, our Sapiens policy solution, which is now part of Sapiens insurance P&C platform, the fifth time, XCelent and 1 very good score from our clients in each of these 6 categories: Functionality, configurability, integration, technology, implementation and support. Sapiens DECISION was recognized as a Hot Vendor in digital business platforms 2017 by Aragon Research Inc. for empowering business people with an intuitive visual model and ability to apply DECISION logic across system and process. As I've stated on prior earnings calls, our plan for 2018 is based on 4 pillars, and we continue to make good progress. First, continue to deliver double-digit growth in our P&C line in EMEA. We remain on track with new customer wins in the region, and our growing pipeline of target customer. Sapiens' marketing and sales team are continuing reaching out to EMEA with targeted campaigns and marketing activities to generate new business opportunity. During the second quarter, we actively participated in insurance events globally, including in U.K., where we are building visibility for our enhanced digital platform. Second, increasing our North America P&C businesses. In the second quarter, we add new customer, expand with existing customers and continue building the pipeline in a crucial growth region, which is tied directly to our successful acquisition strategy. Third, recover our Life and Annuity businesses. In prior quarter, we focused on supporting our existing North America customer based on leverage this relationship for future growth in the market; while in Europe, we are focusing on new opportunity for our open and Closed Book platforms. We continue to expand our component-based life solution businesses in North America this year, and we are confident we will continue to gain new customer in the region. And fourth, cross-selling to our existing customers. In Q2, we are focused on building the infrastructure for cross-sell and up-sell activities. The initiative is aimed at increasing our cross-selling opportunity. I would like to note that while this process has just begun, we are already seeing our clients' interest in this expanding offering and capability. For the remainder of 2018, we will focus on maximizing our assets, namely our leading solution, customer and employee to increase topline growth. We will continue to run an efficiency business that will allow us to scale our growth and meet our profitability targets. We are very fortunate to have a global customer base of over 400 insurance carriers, and we are pleased to work with them as their trusted advisor and partners.

I would now like to turn the call over to Sapiens' CFO, Roni Giladi, to discuss our financial results and outlook for 2018.

[Roni Giladi, executive]

Thank you, Roni, and good morning, everyone. As you see from our results, our second quarter demonstrated strong execution against our target for 2018, which was: establish the foundation for growth and significantly improve profit compared to last year. Our non-GAAP revenue in the second quarter totaled $72.5 million, up 5% from the second quarter of 2017 of $69.2 million.

Over the last quarters, we continue to show growth in our P&C division. We are starting to see growth also in P&C in the U.S. base. Our revenue in North America totaled $34.6 million and represents 47.7% of our total revenue. Europe revenue that include U.K., rest of Europe and Israel, was 44.8% of total revenue this quarter. And APAC in South Africa represent about 7.5% of our total revenue.

Moving to gross profit. Gross profit grew by over 15% and gross margin raised by 380 basis points to 42%, validating our effort to expand Sapiens margin. Gross profit this quarter totaled $30.4 million compared to $26.4 million in Q2 of last year and $30.3 million in Q1 of 2018. We are now in [ recruiting mode ] to follow the demand we see for our products and services, and therefore, our gross margin is being affected negatively by this. Nevertheless, we continue to invest in our offshore capabilities, which now represent 25% of our delivery team and will allow us to improve margin in the short and midterm.

Moving to operational cost. R&D expenses in the second quarter of 2018 totaled $9.9 million compared to $10.8 million in the second quarter of 2017 and $10.3 million in the prior quarter. The reduction in R&D investment compared to last year is due to the fact we closed part of the investment line in StoneRiver Stream following the acquisition of Adaptik; and the efficiency plan, which started last year and continue during 2018. SG&A expenses totaled $10.9 million compared to $12.4 million last year and $11.1 million in Q1 of 2018. The improvement in SG&A expenses compared to the prior period is mainly due to the cost saving and reduction in our workforce and back-office services, following 2 efficiency programs that we implemented post the acquisition of StoneRiver and in Q4 of last year.

As a result of the above, our operating income this quarter totaled $9.6 million compared to an operating income of $3.2 million in the second quarter of 2017 and $8.9 million in Q1 of 2018.

Operating margin improved in Q2 to 13.2% compared to 4.7% in the same quarter of last year and 12.5% in Q1 of 2018. Our adjusted EBITDA this quarter totaled $10.4 million, reflecting 14.3% of total revenue of the quarter compared to $4.2 million or 6% of total revenue last year.

Financial expenses this quarter totaled $1.3 million. The financial expenses this quarter included $0.8 million interest expenses of our debenture, and $0.4 million interest cost due to change in fair value of future period hedging instruments. Tax expenses this quarter totaled $1.8 million, representing an effective tax rate of about 21.6% compared to 23.8% of last year. Net income attributable to Sapiens shareholders for the quarter was $6.4 million or $0.13 per diluted share compared to $1.9 million or $0.04 per diluted share in the second quarter of last year.

As of June 30, 2018, we had cash and cash equivalent of $59.2 million and total debt of about $80 million, which need to be paid over the next 8 years. The GAAP operating cash flow in the first half of the year totaled $9.5 million compared to $7.1 million in the first half of last year.

As we stated on prior earning calls, our focus in 2018 is improving our profitability and building the platform for growth for 2018 and beyond. The second quarter was the first one we consolidated Adaptik on a full basis. We expect to see improvement in profitability in that division, together with improvement in other divisions following the efficiency program we implemented in the fourth quarter of last year. This improvement will contribute to our ability to further improve our profitability towards the end of the year.

Overall, all of our financial indicators were much better in H1 of 2018 versus H1 of 2017, due to immediate action we implemented at the management. Based on the strength of our results in the first half and our outlook for the remainder of the year, we expect to see further improvement in the second half of the year compared to the first half. Therefore, we are raising our guidance to 2018 full non-GAAP revenue of $285 million to $290 million, up from prior guidance of $280 million to $285 million. We are also increasing full year 2018 non-GAAP operating margin. We now expect full-year operating margin in the range of 13% to 13.2% compared to our previous guidance of 12% to 13%.

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

[Roni Al-Dor, executive]

Thank you, Roni. Our 2018 priorities remain, improving organic growth, improving non-GAAP operating margin to a range of 13% to 13.2% by year-end and increasing cross-selling to our customer base. We continue to leverage our investment and foundation we are creating for long-term growth, increased profitability and improved shareholder value.

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

[Operator]

[Operator Instructions] The first question is from Tavy Rosner of Barclays.

[Tavy Rosner, analyst]

Just looking at guidance and the increased guidance for this year, was there a particular division or geography that's kind of driving the incremental revenue expectation?

[Roni Giladi, executive]

Tavy, this is Roni G. As Roni stated in the beginning, we are focused in -- on the P&C area in Europe. We continue to focus to grow and in the States post the acquisition of Adaptik and the acquisition of StoneRiver. So we see positive indicators from the States, duplicating what we have in Europe. This give us good signs to continue and to raise the guidance. This is on the revenue side. On profitability, I think this is across the board. This is coming from all divisions and all geographies as we implemented our efficiency plan in the company.

[Tavy Rosner, analyst]

That's helpful. And then as a follow-up on the margin side. Are you, kind of, done with all your profitability programs? That means that everything that you had to implement is already up and running? Or you think you have more coming on the line perhaps expanding your offshore capabilities and so on?

[Roni Giladi, executive]

This is something that we do not stop. Obviously, we implemented efficiency plans in 2017, 2 ones, 1 in Q2, the other 1 in Q4. We didn't complete the efficiency plan, and we are still focused in to improve profitability. As we mentioned beginning of the year, this year is more focused on profitability and building the foundation for growth for next year. There is still a lot of room for us to grow for the offshore capabilities. We did significant move on the delivery side. There is potential to us also for the R&D. So there is room. I think the short term that we established of about 15% is still valid. We are looking to this as a short-term -- not short term, mid-term guidance.

[Operator]

The next question is from Mayank Tandon of Needham & Company.

[Mayank Tandon, analyst]

Great job on the numbers. Just want to dig a little bit deeper into the growth by geography. I think, just looking at the numbers here, Europe had been very strong last quarter, but it was a relative underperformer. Could you just comment on what may have triggered that? Is it just tough comparisons? Is it FX, or is there something more underlying? And also if you could talk a little bit about the strength in North America this quarter?

[Roni Giladi, executive]

Mayank, this is Roni G. If we look at Europe, we see the trend continue. We do not look at 1 quarter, we are looking at what we achieved in the last several quarters in a row, and what is in front of us for the future. And we see increase in the revenues -- in the revenue there. Again, mainly on the P&C area. What we see in Q2 is basically 2 factors: The first one is a headwind against the currency rate. The dollar, strength against the euro, pound and shekel, and therefore we see a decrease compared to the revenue we'd be able to achieve on a constant currency basis. This is -- represents probably half of the difference there. And the additional one is just the projects that have, because of our nature, we are at the end implementing project with milestone. Some of them have been extended and therefore we have some delay in revenue that will appear in the coming quarter. So we still see growing growth in Europe. In the States, as we acquired recently Adaptik, it's only been last year, we see starting seeds of growth. Roni can talk about this in much -- in detail. But we still see growth in this area, again, focusing mainly on the P&C side. This is only -- we are consolidating Adaptik only in the first quarter. This time, we started to consolidate them in March of Q1, and in one month, this is a full quarter, but we see a starting growth is this area already.

[Mayank Tandon, analyst]

Great. That's very helpful color. And then just to get some context around FX. What was the impact on revenue and if you could even talk about the impact on margins and EPS this quarter from currency?

[Roni Giladi, executive]

Yes. So on the revenue side, if we analyze this year-over-year, we see the exchange rate on the revenue side, they contribute about 1% of the -- on the growth. If we're talking about the full year numbers and on the profitability, a growth of about 0.5% on the profit. If we look about quarter-over-quarter, there is improvement on the revenue of 2%, but organic growth can be 8%, if we're excluding all the factors that we mentioned last time in Japan, South Africa, India and Poland.

[Mayank Tandon, analyst]

One final question from me on margins. I just want to get a little bit more color. I think you touched on this in your prepared remarks, but as we look ahead in terms of the margin drivers, is it going to be more SG&A leverage or do we model in some gross margin improvement as well to get to that margin target? And maybe if you could also talk a little bit about your steady-state margin goals, once you anniversary all these sort of moving parts like the Adaptik acquisition and also the divesting of some of these assets that you called out.

[Roni Giladi, executive]

Yes. So if we look on the last several quarter in a row, we see there is an increase in gross margin of the company. This quarter, we have been slightly down about 0.6%, mainly coming, as I mentioned, on the project side that we delayed some of the revenue, and therefore, profitability. And on top of that, we started to recruit a resource for the company as we see the revenue coming. And, obviously, this has effect of negative impact to gross margin as we need to recruit, train, and only after a while, they can contribute. So this is another factor. Our plan is to improve the margin. I will not say right now our target, but a few basis points is reasonable. As I mentioned earlier, we are working on the offshore capability of Sapiens. Today in India, we have about 600 employees. We have a target to almost double this amount in the mid-term, building the infrastructure and management to achieve this target. This will allow us to improve gross margin. So the improvement is not only on the SG&A and R&D. It's also coming from gross margin.

[Operator]

The next question is from Avishai Kantor of Cowen.

[Avishai Kantor, analyst]

I want to try to go a little bit deeper on the traction in P&C North America. Basically, I'm trying to understand what is driving the improved traction which you're seeing, experiencing. Is it strength in the overall market? Is it in specifically improved win and conversion rates? Maybe it was -- maybe Adaptik was a game changer here for Sapiens, despite being relatively small. I mean, can you just specify a little bit maybe more into detail what is driving that strength?

[Roni Al-Dor, executive]

Yes. As you know, in the P&C, we have 3 -- 4 type of business in U.S. We have our reinsurance business, we have our workers' comp business, we have our Stingray business, and we have our Adaptik and Stream together. The 2 last ones, they are really the main growth engines today. It's Adaptik and Stream and Stingray, 2 of them. And then I think the Adaptik acquisition, we are very happy with it. So I think in relatively very short time, we are doing integration between Stream and Adaptik. And we are already signed a deal as we mentioned in our -- that we -- Georgia Farm Bureau from -- formally they are ready to go together with Adaptik as a solution. So it's the first one that we can demonstrate the integration between Adaptik and Stream. And the overall, based on what we thought at the beginning and we don't -- all what we have is positive surprise from this acquisition, that Adaptik and Stream together are very well recognized in the market and the integration is relatively very small. And we also build the pipeline for it, and we did an investment in our conference as you know. So all in all, it's a very positive momentum and that will be our main growth engine. As we mentioned, our plan was to duplicate our success in Europe, in U.S. with the P&C. That's one. The second one is Stingray, is still for the lower tier, very well received, and we have more deal what we expected. We have some delivery challenges in our business, but beside this, it's well received and so on. In the reinsurance, it's more or less the same. We continue to grow. We right now see a few new deals. We signed deals, so it's okay business. The last one is our workers' comp. In the workers' comp, that's a different business. There is not a lot of deals every year, but if one deal is coming, it's very big. Right now, we are competing in few opportunity. We hope to get one of them and that can be good enough to us to show another growth. So I just summarize, these 4 type of business. One and the second one, very positive growth, and the other is they -- one it's okay, and the other is just waiting to see if we sign one of the big deals. Just to finalize, we at Sapiens, the investor, they are in the call, 2, 3 years ago it's almost nothing business for us in U.S. Right now, we have millions of million dollars, a lot of customer. We -- in October, we have a big conference, Adaptik, Stingray, StoneRiver, all of them coming to a client conference of Sapiens, and we would like to duplicate what we did in Europe. So, very positive.

[Avishai Kantor, analyst]

So is it fair to say that the new contract that you won, that you mentioned, is just basically an integration of Adaptik and Stream capabilities? That's the first real relatively large contract, which you would be able to use as a reference going forward?

[Roni Al-Dor, executive]

Yes. 100%. And that's -- the good thing is it came from commitment to our existing clients, and just say one more thing, we have a lot of StoneRiver clients that potentially this is what we need to go to them, with Adaptik and Stream. So this is what we call a up-sell opportunity that we have right now.

[Avishai Kantor, analyst]

Perfect. And my next question to the CFO, regarding the raise in the revenue guidance for 2018. If I had to break where the incremental revenue is coming from between EMEA and North America, what's the split roughly?

[Roni Giladi, executive]

I would say, evenly, slightly more to the States.

[Avishai Kantor, analyst]

Okay. And my last question is, any update you can give us on the Life segment, which we didn't really speak about this call?

[Roni Al-Dor, executive]

Yes. We are -- based on our information that we gave, we made the decision on ALIS to put all the effort in Europe and slow down the effort in U.S. We see few things will come hopefully in Europe, new ALIS business, but we are feeling positive. In the StoneRiver Life, it's again more or less the same as in the past. And we're also waiting for new business in Closed Book. So again, it's not dramatically growth, but we see some light at the end of the tunnel.

[Operator]

The next question is from Justin Furby of William Blair.

[Justin Furby, analyst]

Roni G, just for you to start in terms of, if you look at this year, can you remind us what the mix will look like in your view, between North America P&C, international P&C and the Life business? And then when you look out over the medium-term, over the next few years, what do you think the biggest changes in that mix will be?

[Roni Giladi, executive]

So on a overall basis, obviously we see right now the P&C growing much faster than the Life. We see slowdown -- or stable, slightly slowdown the Life in the States while Europe is stable, potentially with some growth. On the P&C Europe and the States, we are growing. Overall, if we look at the P&C in the States, this represents about 33% of our business and P&C in Europe about 25% of the business. If we look at the Life, we are talking about the Life in the States of about 11% or 12% and about 15% in Europe.

[Justin Furby, analyst]

Okay. Got it. Very helpful. And if you look at North America on the P&C side, Roni Al-Dor, a lot of color unpacking the 4 different pieces there. But just to be clear, is that -- is it growth that you're starting to see there? Is that organic in Q2? Or you expect it to become organic growth in the back half, or where are we exactly with that process? And if you think out to, sort of, the next 12 months or so, is it possible where North America could get to a growth level similar to what you're seeing in Europe in sort of that double-digit area?

[Roni Giladi, executive]

This is Roni G. So the growth this quarter is we're talking about 1 quarter with a mix of M&A. Adaptik, as I mentioned, is fully consolidated this quarter compared to partially in Q1. If we talk about the organic growth on a full-year basis, as I mentioned, is up about 6% to 7% on an overall basis, while P&C in Europe is growing double-digit. Our expectation is to grow double-digit on P&C, the [ cosystem ]; Adaptik, Stream, Stingray, again, double digit -- high double digits in the States. As Roni mentioned, the Life in -- not the Life, sorry, the range you want in worker compensation, probably grow single digit -- mid single digits.

[Justin Furby, analyst]

Okay. Got it. And then for next year, there are obviously a number of moving parts this year. But do you think that the overall growth should become more normalized, whatever that growth expectation will be in '19? Are there any more moving kind of components to the model to think about?

[Roni Giladi, executive]

We are not providing at this time of the year our guidance to 2019. We'll talk about this either end of this year or early next year. Again, our target is to run around 10% to achieve this. Right now, we are not there, but we are aiming. We are planning to seed today to try to achieve this next year.

[Justin Furby, analyst]

Okay. Maybe, one more if I could sneak it in. I think one of your competitors in the P&C market talks about the market as a whole being something like $2 trillion of directorate and premium in the P&C space to go after. Do you have any sense for where you are if you look at your 400 or so customers, or however many on the P&C side, where you are in that penetration -- from a penetration standpoint?

[Roni Giladi, executive]

Justin, we do not track this amount. I can check and talk to you later, but we do not have this figure.

[Operator]

The next question is from Ethan Etzioni of Etzioni Portfolio Management.

[Ethan Etzioni, analyst]

I'm missing something with the numbers here. Looking at the first half, your income was about $144 million. Now -- so the guidance you're giving for the full year, essentially means that the second half is flat. What am I missing?

[Roni Giladi, executive]

Ethan, this is Roni G. As we stated earlier in the year, our target this year is priority #1 profitability. Just to remind you the comparable profitability in the first half of the year of 2017 was about 4 point -- close to 5%. So we know we need to improve it significantly and this is what we are aiming, and this is what we are doing. And we are beginning to achieve the results. The second priority is to build the foundation for growth, for -- down the years, in 2018 and onwards. The guidance is based -- built on that. As we progress during the year and we eliminate some of the risks, for example, the deal that Roni mentioned about Stream and Adaptik, Georgia Farm, we've been able to increase the guidance although we do not see a significant improve -- or a significant increase in revenue in Q3 and Q4. If we look at the overall, we see significant growth on the P&C area, while some of the area that we see are still flat and some are in declining, for example, Life in the States. So the guidance is based on that. As we continue further in the year, we'll look into the guidance. But right now, this is what we see.

[Ethan Etzioni, analyst]

So essentially, the decline in the Life in the States is offsetting the growth in the P&C and offsetting the growth of the new ones that you had?

[Roni Giladi, executive]

Correct. Correct.

[Operator]

[Operator Instructions] A further question of Ethan Etzioni from Etzioni Portfolio Management.

[Ethan Etzioni, analyst]

I also wanted to ask about your global tax rate. How should we model that going forward, please?

[Roni Giladi, executive]

Ethan, as we had the tax reform in the States, we already in the Q1, we provided our percentage. You can see that right now, we are running about 21% to 22%. If we'd like to be conservative, 22%. This is what we need to look to further through the years.

[Operator]

There are no further questions at this time. Before I ask Mr. Al-Dor to go ahead with his concluding 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 [phone]. In Israel, please call 039-25-5918. And internationally, please call 972-3-9255918. Mr. Al-Dor, would you like to make your concluding statement?

[Roni Al-Dor, executive]

Yes. Thanks for you, and thanks for all the participation for joining us today on the call. Have a good day. Thanks.

[Operator]

Thank you. This concludes the Sapiens International Corporation Second Quarter 2018 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.