Release Date: February 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How does Sapiens plan to accelerate cloud adoption and cross-selling initiatives in 2025? A: Ronnie Eldoor, President and CEO, explained that Sapiens is confident in its cloud and platform strategies. The company plans to push existing customers towards cloud adoption during upgrades and is increasing efforts to cross-sell additional solutions to existing customers. Alex Zuckerman, Chief Strategy Officer, added that Sapiens aims to reach 60% cloud adoption within five years by leveraging the modular nature of their platform and expanding the sales team focused on existing accounts.
Q: What are the dynamics driving modernization in the life insurance sector, and how does it compare to P&C? A: Alex Zuckerman noted that the life insurance sector is now experiencing a strong push for modernization, similar to what the P&C sector underwent in the past 5-7 years. Factors such as digitalization, competition, macroeconomic conditions, and a focus on individual life insurance are driving this trend. Sapiens is well-positioned with a platform approach that combines leading products to meet customer needs.
Q: Can you provide insights on the constant currency impact on ARR and expectations for 2025? A: Ronnie Gillay, CFO, stated that ARR grew by 6.4% in the quarter, with an additional 1% growth when adjusted for currency impacts, totaling 7.4%. The company aims to increase this growth rate to 10% and beyond by transitioning more customers to the cloud and focusing on subscription-based models.
Q: What is Sapiens' current approach to M&A, and are there any plans for acquisitions in 2025? A: Ronnie Gillay mentioned that M&A remains a part of Sapiens' growth strategy. The company is actively pursuing opportunities, focusing on mid to small companies, and aims to complete at least one acquisition by the end of 2025. The market environment is now more favorable for valuations compared to previous years.
Q: How is Sapiens addressing customer concentration, and what are the trends in large customer accounts? A: Ronnie Gillay explained that while the top 10 customers now represent 21.5% of revenue, up from 18.8% in 2023, no single customer accounts for more than 5% of total revenue. Sapiens maintains a diversified customer base and does not see any significant risk from customer concentration.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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