shareholders              21,091       19,080       62,553       54,943 
                       ===========  ===========  ===========  =========== 
 (*) Acquisition-related costs pertain to charges on behalf of M&A 
 agreements related to future performance targets and retention criteria, 
 as well as completed or prospective third-party services, such as tax, 
 accounting and legal rendered. 
 
 
Adjusted EBITDA Calculation 
 U.S. dollars in thousands 
 
 
                              Three months ended    Nine months ended 
                                 September 30,        September 30, 
                             --------------------  ------------------- 
                               2024       2023       2024       2023 
                             ---------  ---------  ---------  -------- 
 
GAAP operating profit           21,746     20,265     64,151    58,779 
 
Non-GAAP adjustments: 
-------------------------- 
Valuation adjustment on 
 acquired deferred revenue           -         55          -       165 
Amortization of capitalized 
 software                        1,470      1,418      4,584     4,274 
Amortization of other 
 intangible assets               2,319      2,909      7,362     8,765 
Capitalization of software 
 development                   (1,834)    (1,638)    (5,374)   (4,975) 
Stock-based compensation           646      1,038      2,229     2,960 
Compensation related to 
 acquisition and 
 acquisition-related costs         754         11      1,248        21 
                             ---------  ---------  ---------  -------- 
 
Non-GAAP operating profit       25,101     24,058     74,200    69,989 
 
Depreciation                     1,288        719      3,480     2,750 
 
Adjusted EBITDA                 26,389     24,777     77,680    72,739 
                             =========  =========  =========  ======== 
 
 
Summary of NON-GAAP Financial Information 
 U.S. dollars in thousands (except per share amounts) 
 
                           Q3 2024  Q2 2024  Q1 2024  Q4 2023  Q3 2023 
                           -------  -------  -------  -------  ------- 
 
Revenues                   137,025  136,800  134,249  130,914  130,760 
Gross profit                62,809   62,481   60,884   59,370   59,260 
Operating income            25,101   24,836   24,263   24,152   24,058 
Adjusted EBITDA             26,389   25,931   25,360   25,267   24,777 
Net income to Sapiens' 
 shareholders               21,091   21,041   20,421   20,081   19,080 
 
Diluted earnings per 
 share                        0.37     0.37     0.36     0.36     0.34 
 
 
 Annual Recurring Revenue ("ARR") 
        U.S. dollars in thousands 
 
                                    Three months ended 
                                       September 30, 
                                   --------------------- 
                                      2024       2023 
                                   ----------  --------- 
          Annual Recurring Revenue  173,414    157,589 
                                    =========  ========= 
 
 
 
Non-GAAP Revenues by Geographic Breakdown 
 U.S. dollars in thousands 
                    Q3 2024  Q2 2024  Q1 2024  Q4 2023  Q3 2023 
                    -------  -------  -------  -------  ------- 
 
North America        55,755   57,918   55,158   54,882   54,848 
Europe               69,281   66,072   68,727   65,239   64,662 
Rest of the World    11,989   12,810   10,364   10,793   11,250 
                    -------  -------  -------  -------  ------- 
 
Total               137,025  136,800  134,249  130,914  130,760 
 
 
 
Non-GAAP Revenue breakdown 
 U.S. dollars in thousands 
 
                            Three months ended    Nine months ended 
                              September 30,         September 30, 
                           --------------------  ------------------- 
                             2024       2023       2024       2023 
                           ---------  ---------  ---------  -------- 
 
Software products and 
 re-occurring 
 post-production services 
 (*)                         100,707     87,356    292,992   251,757 
Pre-production 
 implementation services 
 (**)                         36,318     43,404    115,082   132,133 
 
Total Revenues               137,025    130,760    408,074   383,890 
 
                            Three months ended    Nine months ended 
                              September 30,         September 30, 
                           --------------------  ------------------- 
                             2024       2023       2024       2023 
                           ---------  ---------  ---------  -------- 
 
Software products and 
 re-occurring 
 post-production services 
 (*)                          53,809     46,053    156,386   133,339 
Pre-production 
 implementation services 
 (**)                          9,000     13,207     29,788    40,276 
 
Total Gross profit            62,809     59,260    186,174   173,615 
 
                            Three months ended     Nine months ended 
                              September 30,          September 30, 
                           --------------------  --------------------- 
                             2024       2023       2024        2023 
                           ---------  ---------  ---------  ---------- 
 
Software products and 
 re-occurring 
 post-production services 
 (*)                          53.4 %     52.7 %     53.4 %      53.0 % 
Pre-production 
 implementation services 
 (**)                         24.8 %     30.4 %     25.9 %      30.5 % 
                                      --------- 
 
Gross Margin                  45.8 %     45.3 %     45.6 %      45.2 % 
 
(*) 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. 
 
 
Adjusted Free Cash-Flow 
 U.S. dollars in thousands 
 
                               Q3 2024  Q2 2024  Q1 2024  Q4 2023  Q3 2023 
                               -------  -------  -------  -------  ------- 
 
Cash-flow from operating 
 activities                     13,083    8,545   18,488   38,646    3,988 
Increase in capitalized 
 software development costs    (1,834)  (1,823)  (1,717)  (1,543)  (1,638) 
Capital expenditures           (1,125)    (666)    (466)    (421)    (696) 
Free cash-flow                  10,124    6,056   16,305   36,682    1,654 
 
Cash payments attributed to 
 acquisition-related costs(*) 
 (**)                              124      134      751      221        - 
 
Adjusted free cash-flow         10,248    6,190   17,056   36,903    1,654 
(*) Included in cash-flow from operating activities 
(**) Acquisition-related payments pertain to charges on behalf of M&A 
agreements related to future performance targets and retention criteria, 
as well as completed or prospective third-party services, such as tax, 
accounting and legal rendered. 
 
 
 
 
 SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES 
 CONDENSED CONSOLIDATED BALANCE SHEET 
 U.S. dollars in thousands 
 
                                               September 30,  December 31, 
                                                   2024           2023 
                                               -------------  ------------ 
                                                (unaudited)    (unaudited) 
                                               -------------  ------------ 
 
 ASSETS 
 
 CURRENT ASSETS 
 Cash and cash equivalents                           146,152       126,716 
 Short-term bank deposit                              39,800        75,400 
 Trade receivables, net and unbilled 
  receivables                                        109,670        90,273 
 Other receivables and prepaid 
  expenses                                            25,769        22,514 
                                               -------------  ------------ 
 
 Total current assets                                321,391       314,903 
                                               -------------  ------------ 
 
 LONG-TERM ASSETS 
 Property and equipment, net                          11,431        12,661 
 Severance pay fund                                    3,446         3,605 
 Goodwill and intangible assets, net                 310,533       317,352 
 Operating lease right-of-use assets                  20,502        23,557 
 Other long-term assets                               15,993        17,546 
                                               -------------  ------------ 
 
 Total long-term assets                              361,905       374,721 
                                               -------------  ------------ 
 
 TOTAL ASSETS                                        683,296       689,624 
                                               =============  ============ 
 
LIABILITIES AND EQUITY 
 
 CURRENT LIABILITIES 
 Trade payables                                        8,224         6,291 
 Current maturities of Series B 
  Debentures                                          19,796        19,796 
 Accrued expenses and other 
  liabilities                                         80,610        77,873 
 Current maturities of operating 
  lease liabilities                                    5,861         6,623 
 Deferred revenue                                     32,810        38,541 
                                               -------------  ------------ 
 
 Total current liabilities                           147,301       149,124 
                                               -------------  ------------ 
 
 LONG-TERM LIABILITIES 
 Series B Debentures, net of current 
  maturities                                          19,778        39,543 
 Deferred tax liabilities                              7,938        10,820 

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November 11, 2024 05:44 ET (10:44 GMT)