Yaffa Cohen-Ifrah - Chief Marketing Officer and Head of Corporate Communications Roni Al-Dor - President and Chief Executive Officer Roni Giladi - Chief Financial Officer.

Mayank Tandon - Needham and Company Justin Furby - William Blair Avisha Kantor - Cowen Tavy Rosner - Barclays.

Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation's Second Quarter 2017 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

[Operator Instructions] As a reminder, this conference is being recorded, August 7, 2017. It is now my pleasure to introduce your host Mrs. Yaffa Cohen-Ifrah, Sapiens CMO and Head of Corporate Communications. Thank you, Ms. Cohen. You may now begin..

Thank you and good day everyone. Our quarterly earnings 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 applies to the content of the call.

Sapiens expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise. Also, during the course of today's call, we will refer to certain non-GAAP financial measures.

A reconciliation schedule showing GAAP versus non-GAAP results have been provided in our press release issued before the market opened this morning. A replay of this call will be available after the call on our Investor Relations section of the Company website or via the website link which appeared in the earning release that we published today.

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

Roni?.

Thank you Yaffa, and good morning everyone. Thank you for joining the call today, Sapiens reported its second quarter results with double-digit revenue growth driven by a mix of organic growth and M&A from our recent acquisition of StoneRiver, Inc. We witness goals across the U.S., UK, Rest of Europe and South Africa.

We remain very excited with StoneRiver acquisition and we have made solid steps in combining our two organizations. Today, we have fully made each StoneRiver division with its peer division at Sapiens. We also merged all of our U.S. P&C activity into one group.

We have integrated the sales and marketing organization into one while heading account managers to grow our business with existing client. As of now all corporate function and back office operation are fully integrated. The StoneRiver acquisition was strategic for us.

It significantly expand our presence and scale both in North America insurance market and globally. It helps us to grow our customer base and it added complementary and core solution to our portfolio.

Today, Sapiens is position as a leading innovating software solution provider offering end to end solution to the global insurance industry, while creating greater value for all customer and shareholders. I would like to emphasize that one of our key assets today is the 400 customers that we support and services.

Our long term relationship, we sell combined customer base will give us a great opportunity to leverage and cross sell our extended suite of solution and components to address these customers' needs and requirements.

I would like to note that while this process has just begun we are already seeing our client's interest in expanding their system and capabilities with our newly expend offering. Turning to the quarter, we report revenue of $69.2 million up to 30.4.1% over the second quarter of 2016 and reflection a full quarter contribution from StoneRiver.

On the deal front as we mentioned previously we have already gain a new customer with our StoneRiver offering, the Catholic Order of Foresters has selected StoneRiver's LifeApply, electronic application and signature; and LifeSuite, case flow and automated underwriting software solutions.

In addition, as previously announced during the quarter, we were selected by a leading Nordic insurer for Modernization Project worth over $30 million.

The new significant customer selected a wide range of Sapiens solutions to modernize its environment including the Sapiens P&C solution IDIT Insurance Suite of policy, claims, and billing; the Sapiens Reinsurance suite of products and the Sapiens INTELLIGENCE and Sapiens PORTAL components of the Sapiens Digital Suite.

Further the insurance processing environment will be managed via Sapiens hosted services leveraging Microsoft Azure cloud environment.

Beyond our own your business EuroLife a leading life insurance company based in Cypress, specialized in life, accident and health insurance went live with Sapiens ALIS to replace the company's legacy enrollment and support all of each line of businesses.

Also we are now in production with StoneRiver's CompSuite policy system with Specialty Program Manager in the Southeast U.S. This customer selects CompSuite to support its rating and policy insurance for their Professional Employer Organization, PEO, program that specialize in worker's comp.

Implementation took just six weeks from kick off the production with Specialty Program Manager processing policies in 47 states in the StoneRiver hosted environment.

On the product front after the end of the quarter, we announced that we announced our life insurance offering with the general availability of Sapiens ALIS 7 suite for life, investment, health and annuity providers worldwide.

The new ALIS suite enables insurance to own board and administrate individual group and employee benefit business and support multiple line of businesses for life; investment and saving; annuity and medical products.

From a single unified platform, the new version also feature full pre-integrated to Sapiens Digital Suite including agent and customer portals, data warehouse and Sapiens' advanced analytic solution. Also after the end of the quarter, we announced that we intend to leverage Microsoft two new data centers for its cloud based services in South Africa.

We believe the Sapiens partnership with Microsoft Azure together with our robust present in South Africa and now innovation technology will enable local insurance to benefit from end to end cloud based solutions. South Africa is the region with a great growth potential for us.

I would like to remind you that during the first quarter we announced that Alexander Forbes, the pan-African financial services group selected Sapiens for our full portfolio including Sapiens ALIS, Sapiens IDIT, Sapiens Reinsurance together with the Sapiens PORTAL, Sapiens INTELLIGENCE and Sapiens DECISION to manage each business process.

Sapiens is also serve as the primary implementation partner under the signal delivery organization. These representatives of the increased interest we see in our implementation services from both current customer and prospect.

In addition, as part of our end-to-end strategy, we expand our services offering to customer and prospect beyond JASCO system implementation services.

Our professional services offering now include program management, business transformation, training in sales efficient condition, testing services, complete data migration, business and technology consulting services and a broad range of manage and hosting services; our offering based on our strong industry expertise.

Our insurance practice team is a global team with local facilitation capabilities in all of our main territories, the UK, U.S. Nordic, South Africa and Asia. Our strong implementation expertise enables us to extend our knowledge and improve with very new project to successfully delivery complex program.

This combined is our strong product technology as enable for successfully delivery and long term partnership with customers. As previously announced during the quarter, we continue to be recognized about outside the professionals for our industry leading offerings.

StoneRiver was name among this year Top 10 Policy Administration Solution Providers by Insurance CIO Outlook magazine. This is the second consecutive insurance CIO Outlook, Top 10 apparent for StoneRiver having being named Top 10 Claims Processing & Management Solution Providers in 2016.

Further our own costumers are being recognized for their own effort to upgrade their system and process. COUNTRY Financial received the Novarica Research Council Impact Award for the core systems and them and was recognized for the business impact of its underwriting automation initiatives.

To conclude my portion following our announcement in April regarding the halt of the total development project with significant customer, we are happy to announce that Sapiens has reached an agreement in which neither party will have any further commitment to claim to or against the other party with respect to the project.

In addition, under the terms of the agreement Sapiens retain all rights title and interest in and to any old intellectual property rights in the software development is part of the project as well as the right to sell an install platform without any limitation.

So to summarize the second quarter, we posted the solid quarter highlighted by double digit revenue growth driven by a mix of organic growth and acquisition of StoneRiver. We warn you customer and extend our business with existing customer across all territories. We believe, we are on track for the second half of 2017.

I would like now to turn the call over Sapiens CFO, Roni Giladi to discuss our financial results and outlook for the second half of 2017..

Thank You Roni, and good morning everyone. Revenue in the second quarter was up 30.4% from the second quarter of 2016 mainly due to M&A from our recent acquisition of StoneRiver and our organic growth. Also please note that our second quarter results reflect a full quarter contribution from StoneRiver.

If we analyze our organic growth this quarter on a constant currency basis excluding the non-core revenue that we decided to be emphasized in APAC our organic growth rate this quarter would have been 4%, despite the significant impact of the lost revenue due to the halt of the software development project.

Without the impact of the lost revenue due to the halt of the development project our organic growth rate would be above 15%. Moving to our geographic breakdown; our revenue in North America represents 41% of our total revenues. Following the StoneRiver acquisition and despite the lost revenue due to the project cancellation.

Europe and South Africa group following the Alexander Forbes deal and other deal we signed this year in those territories. APAC revenues declined following our strategic decision to deemphasize non-core revenue in that region and we will see continuous decrease in the coming quarters.

Moving to gross profit, gross profit this quarter totaled $26.4 million compared to $22.7 million in Q2 of last year and $20.5 million in Q1 of 2017. Our gross margin this quarter was 78.2% down from 42.9% in the second quarter of last year and up from 36.2% in the prior quarter.

The increase in gross profit dollars versus last year was mainly due to StoneRiver consolidation. The gross margin decreased this quarter compared to last year was mainly due to additional investment in our offshore capabilities in India and Poland to support future growth.

Training of the employees we shifted from the halted project to other line of business in the currency exchange rate impact. On a constant exchange rate, gross margin this quarter would have been higher by approximately 200 basis point reaching 40%. Moving to operational cost, our investment in R&D and SG&A grew during the second quarter.

R&D expenses in the second quarter of 2017 totaled $10.8 million compared to $5.4 million in second quarter of 2016 and $7.3 million in the prior quarter.

The increase in R&D expenses this quarter compared to the second quarter of 2016 was the result of the full quarter consolidation of StoneRiver and our investment in the development of the new capability for Sapiens ALIS.

We completed the elevated investment in ALIS capabilities and launch the new enhanced version two weeks ago and expect to see reduction in ALIS R&D investment in the coming quarters. SG&A expenses totaled $12.4 million compared to $9.9 million in the second quarter of last year and $11.5 million in the prior quarter.

Most of the increase was due to the full quarter consolidation of StoneRiver. Our operating income totaled $3.2 million or 4.7% operating margin compared to $7.4 million or 14% operating margin in the second quarter of 2016 and $1.7 million or 3% operating margin in the prior quarters.

The reduction in operating margin is primarily due to the reason we mention above, coming from the reduction in gross margin in the increase R&D expenses. If you assumed a constant exchange rate during the period our operating margin would have been approximately 300 basis points higher reflecting 7.7% compared to 4.7% reported margin.

We improved our operating margin compared to the first quarter and compared to our guidance that was to 3% to 4%. We believe, we are on track for continued improvement in our operational profitability. I would like to provide some more color on how we plan to reach our margin target for the second half of 2017.

Starting there in end of Q1, and during the second quarter we implemented costs saving in efficiency initiative that will help us to reach our operating margin goals and we saw month after month margin improvement during that period.

On the business level as Roni Al-Dor said earlier, we have fully merged each StoneRiver business division with its peer division at Sapiens.

Following the software development project cancellation, we realigned the organization and reassigned the employees away from the cancel software development project to other growing vertical and also downsized our workforce is necessary.

On the delivery side, we recognized synergies and integration between Sapiens and StoneRiver, and we begin the offshore program with Sapiens' capabilities to drive additional efficiencies in StoneRiver. On the R&D, we are reducing the R&D investment going forward following the completion of the development effort for the ALIS group capabilities.

We integrated each of the sales and marketing organization of StoneRiver and Sapiens in to one organization. All our corporate functions and back-office operations, including IT, finance, legal, HR and purchasing, are now fully integrated after cost savings. We completed the planning of the restructuring and integration plan of Sapiens and StoneRiver.

We are now executed major portion of our plan. However, during the second quarter, we did not complete deemphasize of our non-core activities in APAC, we expect to completed it by the end of the year. Initially, we anticipated the total production cost to be up to $5 million.

Please note that in the second quarter, we reported $3.9 million restructuring cost and the remaining balance will be recorded during the second half of the year. Our adjusted EBITDA this quarter totaled $4.2 million reflecting 6.1% of total revenue for the quarter.

Financial expenses, this quarter totaled $709,000 compared to financial income of $326,000 in the second quarter of 2016. The increase in financial expenses is mainly due to the interest expenses on the $40 million loan in bank debt used to finance the StoneRiver acquisition.

Tax expenses this quarter were $605,000 representing an effective non-GAAP tax rate of about 23.9%. I would also like to indicate the following our acquisition of StoneRiver and as mentioned earlier our tax rate is expected to be in the level of 25%.

Net income for the quarter was $1.9 million or $0.04 per diluted share compared to $6.2 million or $0.13 per diluted share in the second quarter of last year. Turning to our balance sheet. As of June 30, we had cash and cash equivalent of $46.4 million, and total debt was $38 million, which was used to finance this StoneRiver acquisition.

GAAP operating cash flow this quarter total $7 million compared to $19.1 million in Q2 of 2016. The main reason for the decrease in cash flow is the GAAP operational loss including the restructuring this quarter compared to a personal income of last year.

Earlier today, we filed a shelf prospectus and issued press only regarding our intention to raise debt. First, I would like to emphasize that the Company's always seeking to diversify it source of financing in order to improve its financial flexibility. This is part of our continuous effort to optimize our balance sheet and capital structure.

We are looking to raise new long term debt which will replace our current bank breach debt with longer maturity and to lock-in long term interest rate.

I would like to note that our goal is to strengthening our balance sheet and to provide additional working capital to support our customer development needs in addition to continue to pursue M&A business opportunities we see ahead.

Although we continuously look for M&A opportunities, according to our strategy we do not currently have any plan for the additional major M&A activity. We are currently primarily focused on the integration of StoneRiver. I'd like to turn now to our guidance for 2017. We reiterate our annual guidance for 2017.

We expect revenue between $265 million and $275 million representing annual revenue growth rate of 23% to 27%. Sapiens also expects its full year operating profit margin to be between 9% and 10%. We expect operating profit margin to increase to 13.5% to 14.5% in the second half of the year in each case on a non-GAAP basis.

As I described earlier, to achieve our double-digit operating margin in the second half of 2017, Sapiens implemented restructuring and reorganization program during the first and the second quarter of 2017. In Q2, we reach 4.7% operating margin and we expect to reach the range of 13.5% to 14.5% in the second half of the year.

Approximately two third of this improvement will come from gross margin improvement and one third from reduction in operational cost. I'd like now to turn the call back to Roni Al-Dor for closing comments.

Roni?.

Thank you, Roni. Overall, we delivered double-digit growth for the quarter. We remain very excited about our acquisition of StoneRiver and its contribution to our overall businesses and addressable market opportunity. Our businesses remain strong and customer demand for our products and services remain high.

We are confident that we will continue to deliver growth in 2017. I would like now to turn the call over to operator for Q&A. Operator, please call for question..

Thank you. Hello, Roni and Roni and Yaffa. I had few questions for you.

First and foremost, could you talk a little bit more about the revenue synergies from the StoneRiver acquisition, how are you looking at synergies from the integration you've already talked a little bit about the cost side, I'd be interested in terms of what kind of revenue expectations you have for StoneRiver in the back half of the year and then of course more importantly in 2018 company has fully integrated?.

Hi this is Roni, as you know we have all of some of the abilities contribute to us in several areas, one of this we are doing lot of integration on the Reinsurance, so we can see a good demand in this area. The other piece is on the Stream and P&C, all the sales organization selling both in Life and P&C, so we build a good one.

And the last one is all the LifeSuite including the underwriting illustration is complementary to our ALIS. So again this is more or less in U.S. what we start to integrate this to try to bring StoneRiver product to the Rest of the World, but this is just we're starting right now..

So in that vein, how should we think about organic growth beyond 2017, I mean you're not giving specific guidance at this point, but over the revenue share if you look like in 2018 and beyond, what's that deal has fully integrated?.

We believe, we can see in the second half of 2018, we can start to see the growth also in a StoneRiver product.

As just to remind all of you that we have 200 new clients, just for and as an example, in the month from now we have a big event in the State, that right now we have already 240 registered for our client conference that we can due to StoneRiver client and Sapiens and all of those clients are potential client to Sapiens product and to StoneRiver, but again it's take time, we increase dramatically our accounts management, in StoneRiver and sales, so I believe we can start to see the fruit, but as I mentioned it's take time, but definitely those of the clients that we are looking after..

Right thank you.

And then just the same kind of questions on our margins, Roni, thank you for the details around the margin drivers for the back half of 2017, but I guess the same question applies to 2018, what kind of improvement can we expect for margins, can you get back to that 13%, 14% level for the full year in 2018, is that a reasonable target at this point?.

Hi Mayank, this is Roni, just as Roni comment, when we only the company in decline in revenue the overall figure and the main task is for Sapiens for 2017 was to stabilize the revenue. We see right now this time that we can achieve the targets are stabilize in the revenue from 2017 and as Roni mentioned growth on the second half of 2018.

On the margin, obviously the entire management focus on get back to track on the second half of 2017, so which is the range of between the 35% to 14.5% on the second half and we see this for the full year of 2018 also..

Got it.

Final question from me on competition, just wanted to get your thoughts around now how you're varying especially in Europe, but GuideWire becoming more aggressive in that region and also just generally if you could talk about the competitive environment that you're seeing today versus six, 12 months ago, how is that change if it all?.

Yes, we definitely see GuideWire, we see them and try to drop the price, as you know we sign relatively towards many deals at the beginning of the year and we hope to sign more, and I think the main - that's some of the challenges, what we don't see a lot that creak as again we see less and less and the others we talk to get the big advantage on the P&C.

So we and GuideWire definitely the leaders in the market right now, again it's not mean that we don't see other that we are in a very good shape..

Great. Thanks guys, I'll get back in queue..

Okay. Just to add the differentiator between us is our business model, we need to find the customer they like our business model that we are doing also the overall solution, and we can see more and more opportunities for analytic, for digital, for managed service for additional, additional services.

So right now what we can start to see the competition is not just between us and GuideWire, is between us and the big systematic and this is the area that we also walking to improve ourselves in all the service area. But again the company that's like our business model that one stop shop, we definitely has a huge advantage..

Very helpful. Thank you so much..

Bye, bye..

The next question is just from Justin Furby of William Blair. Please go ahead..

Thanks guys and congrats on the quarter.

I guess maybe you start Roni Al-Dor, just curious in terms of pipeline on the Life and Annuity side, I know it's early in terms of the recent release, but are there any visible signs that starting to impact pipeline growth and I guess from a product standpoint in the Life space do you feel like you have sort of everything you need now or is that more developments or acquisitions on that front as well?.

I think from the product we did a lot of investment on the past, and also normally the huge complimentary, so this is in the good side as just to remind we sign a very big tender in Alexander Forbes in South Africa it includes big business for the Life also in the group side, so in terms of pipeline it's not as good as the P&C, but we put a lot of effort also sales and marketing effort to improve it.

We did a lot of work with the analysts, community that's listen to them for their advice. Right now we are in a short list in a couple of business, we hope to sign it..

Yeah, that's helpful.

And then on the P&C side in terms of where you're seeing the most activity from a geography standpoint, what regions would you call out, and then are there any reason where maybe they're not add just today, but if you look out six months a year from now you feel like there's a lot of opportunity?.

Look the area that we certainly try to penetrate into the U.S.

In Europe we're showing the last two years huge growth from the P&C and we believe that we continue to see the same, but Sapiens decide of mid 2016 to penetrate with the Stingray acquisition and then StoneRiver in both area we are doing a lot of work and we definitely will see the results.

In Stingray, we have a good confidence, we still in early stage, but we also see potential. So the area that we - for us it's relatively new in the U.S., but we did everything in order to be there and I hope to see the growth..

Got it.

And then maybe if you look at longer term five years from now say, what do you think the mix might look like between P&C and Life, and just one last follow up for Roni Giladi?.

Right now it's looks the P&C become bigger part of our cake. But we plan to continue to invest on the Life. Again just to remember the Life is very thickness business, is how to get new deals, but when you are there you're there for long term and a lot of new regulation, we also doing a lot of investment on the closed book area.

So if you ask me 2017, 2018 definitely depends you will be - if you think about long term we hope to be more less 50-50, but that's 2019 and more..

Got it, very helpful.

And then Roni Giladi, just in terms of the currency impact, what are the full year on revenue that you're embodying, and then in terms of the margin in the second half is it fair to say that Q3 will be somewhere below that 13.5% or 14.5% and Q4 somewhere there or above or what's the right way to think that thing?.

So on the currency side, with did analysis, if we compare the result versus comparable quarter the impact on the gross profit was 2% higher and operational profit 3% higher, so significant impact on the currency side and increasing forward these will be the impact, although we'll see starting to see some strength in the pound and the euro, which is in favor to us, so this is on that above.

Can you repeat the second question?.

Yeah.

Just on the ramp and profitability in the second half in terms of Q3 being below the 13.5%, 14.5% in Q4 above and it's not the fair way to think of it?.

I think the answer for that is yes, we also saw win-win analyze by month Q2 result we see by month improvement month-after-month so we assume the improvement will continue like this also in Q3 and Q4. And I would say the Q4 will be probably higher than Q3, so into the analysis and what you assess is right..

Got it. Thank you very much, guys and congrats..

Thank you..

Operator:.

. :.

Hi, good afternoon everyone and thank you for taking my question. So my first question is, it seems that the organic growth rate excluding the cancelled software project, actually slightly accelerated sequentially, if I recall correct it was 15% in the last quarter, now you said its 15% plus.

What are the drivers is it from new clients, existing clients or is it initial or some early signs of success from integrating StoneRiver and some cross selling opportunities?.

Hi, Avisha, this is Roni Giladi. So first of all you're totally right, if we exclude the decision about deemphasize APAC operation and see in the halted project we see above 15% organic growth. I would not say that there we trend or change in trend in the behavioral of the company if we look overall several quarter I think it's the same.

So I'd say the market is still strong for our products, slightly more on the P&C right now Life is only I mentioned, but overall the same..

And then where do you stand on the headcount reorganization phase following that cancel project? Is that behind us?.

I'd say that the first of all, in terms of the plan, we are 100% planning completed and the execution I'd say 90% done I think we mentioned that the most of the activities are executed.

We still will have more left over especially in the APAC region, but this is small part we'll probably finish this by the end of this year, 2017, so I'd say significant major part is behind us and all forward to achieve our guidance..

And then my next question.

I know it's still early, but do you have any initial thoughts on how do you plan or you can monetize the IPSH which you received as part of the separation agreement?.

This is an internal task that we have right now in the company on the business development side obviously we total exchange there is a IP, which is not reflected in the books of Sapiens.

We're looking to potentially partner or to sale the IP or to do some a combination of the two when we will have something to announce we'll say it, it currently on plan..

And my next one, you mentioned investments in offshore capabilities in both India and Poland, I assume they related to have the capabilities as well as related specifically to StoneRiver or it's a combination of both Sapiens and StoneRiver?.

I would say the second line is the accurate one, Sapiens is growing and we have a high target to increase our offshore capability and also improve profitability in the company. The main region for offshore is India and Poland, and we we're relocating the employees and management to these territories to support this growth of Sapiens.

When we acquire the StoneRiver, we mentioned that they have also offshore capabilities, but this was with third party and our plan is overtime to see if this operation to Sapiens, so we are investing for both Sapiens and StoneRiver..

And then a completely different topic will change the conversation.

Can you talk a little bit about clients' appetite for your cloud based services, which I believe have a higher margin profile for the company, any areas of strength or areas of the success that you can talk about?.

The answer for this is yes, and again when we saying cloud, saying private cloud this is very important to me to emphasize, we are talking mainly on let's say three and four customers that they provide ask Sapiens to provide for them hosting environment for their product, outside of the IT organization.

And I can say also we've some starting success also in higher number two and three also for this capability [indiscernible] more on the low there, but we see some trend also called let's say tier number two and three..

Can you characterize the demand for that is growing, I mean do you see that?.

I would see I think the answer for that is gradually growing..

Gradually growing. Great, thank you so much..

Thank you..

Thank you..

The next question is from Tavy Rosner of Barclays. Please go ahead..

Hi, everyone. Most of my questions were answered, I just wondering you've touched a little bit on Africa or you kind of expenses physical presence and also planning on leveraging Microsoft, data center or data store.

Can you talk a little bit about Sapiens presence in Africa, the opportunity down the road and what you expect will be the potential revenue contribution let's say two, three years from now?.

Okay. When we talk about South Africa just to remind, we are talking about South Africa.

We Sapiens invest many, many years to had like a let's say seven to eight plant in South Africa and then we penetrate we saw Latin and Europe to one of the big bank there, that's happen like two years ago with ALIS very successful client then bring us more and more business all the time and then we signed big contract with Alexander Forbes.

What we are doing in parallel, it very similar to what we are doing in Scandinavia area. We hire local people, we build an office, we hire sales, we are doing a lot of marketing event there.

Just two weeks ago, we present in a very big event full insurance again like year before so we are short list in few area there again we see as a market that interest for us, very similar to regulation in terms of life to UK and the English speakers, so we see a big demand there, I believe after we can deploy Alexander Forbes sales phase we can show to the South Africa market that's we able to do what we plan to do for them and that's can bring us more business as well.

So the long answer is definitely interesting market for us..

Okay. That's helpful.

And the last one, you mentioned on prepared remarks the shelf for potential debt insurance in Israel, I might have missed it in your prepared remarks, is that refinance the debt that you raise for the acquisition of StoneRiver?.

Hi, Tavy, this is the Roni Gi. The answer for that is yes, we would like to increase our strength of the balance sheet and also for investment and for future M&A activities and obviously of course will retain the bank loan that we have like that..

Okay. Thank you..

[Operator Instructions] There no further questions at this time. Before I ask Mr. Al-Dor to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin in two hours. In the U.S., please call 1-866-500-4953. In Israel, please call 039255947. And internationally, please call 9723-925-5947. Mrs.

Al-Dor, would you like to make a concluding statement?.

Thank you, and thank you to all participates who joining our call today. Have a good day. Thanks..

Thank you. This concludes the Sapiens International Corporation second quarter 2017 results conference call. Thank you for your participation. You may go ahead and disconnect..