Welcome to Sapiens International Corporation’s 2022 First Quarter Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded, May 3, 2022.

It is now my pleasure to introduce your host, Tally Kaplan Porat, Director of Corporate Marketing. Thank you, Tally. You may now begin..

Thank you, and good day, everyone. Sapiens’ first quarter 2022 earnings release was issued before the market opened this morning and has been posted on the company’s website at www.sapiens.com. Representing Sapiens on the call today are Roni Al-Dor, President and CEO; Roni Giladi, our Chief Financial Officer.

Before we start, I would like to remind everyone that this conference call may contain projections or other forward-looking statements. The Safe Harbor provisions in this press release issued today also apply to the content of the call.

Sapiens 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. On today’s call, we will refer to the non-GAAP financial measures.

A reconciliation schedule shows GAAP versus non-GAAP results has 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 is available in the earnings release we published today.

I will now turn the call over to Roni Al-Dor, President and Chief Executive Officer of Sapiens.

Roni?.

Thank you, Tally. I would like to welcome everyone to our call today to review Sapiens’ first quarter 2022 financial results. Sapiens has delivered a good start to 2022 with first quarter revenue increased by 7% year-over-year to $180 million, in line with the guidance we gave on our last earnings calls.

Operating profit increased to $20.8 million for an operating margin of 17.6%. We maintain profitability on parallel with full year 2021 despite increased employee cost.

The global Sapiens team has successfully delivered on multiple forms in quarter one with notable wins in all geographies, efficient delivery, and continue investment in the innovation, capabilities and expansion of our offering. Our global customer centric model continue to achieve consistent goals and profitability and generating cash.

Sapiens success is built upon three key elements. The first key elements is our commitment to innovation, and product excellence, reflecting our meaningful R&D strategy. This drive the continuous improvement and enhancement of our offering, which is being recognized by the analyst community and by our customers.

Second is our Land-and-Expand strategy, which we successfully execute to allow us to go with new and existing clients and penetrate new markets. The third element is our role as a trusted partner, where we support our customers on long-term engagement model in their digital transformation, and the ongoing continuous evolution of the business.

These key elements are tightly coupled and provide us with several levels of goals, evolving with our customers’ need and advancing, thanks to our innate drive for excellence and success.

Europe continues to deliver goals for Sapiens on the heels of outstanding performance in 2021, Europe continue and is as expected to continue to be an exciting region for us in 2022.

We have successfully expanded our European presence by combining organic goals with our past acquisition that are now fully integrated, using influential customer reference and local presence that we gain organic and throughout our acquisitions.

To build a robust pipeline for P&C and Life and Pension in European market, which includes several key region.

We say excellent progress and maturity of this pipeline, particularly in the Spanish speaking Iberia region, the German speaking DACH region, the Nordic region as well as UK and Ireland and few other countries in Central Europe, and such progress demonstrate today the fruits of our investment over the last few years.

This region we have accelerated our business ramp up with the local customer base and local team. Today, we are well positioned as a market leader. And this will allow us to continue and harvest market share in these regions. One great example is our focus in the German market in P&C.

We have established a strong presence and successful leverage, the cultural knowledge, references and regulatory expertise we acquire through rapidly growth our businesses in the German market. As a result, we see increased pipeline in the region at several stages. We recently announced two new P&C wins in Europe that I would like to highlight it.

One is a Builders Insurance Holdings, a leading multinational provider for P&C insurance and reinsurance services with headquarter in Luxembourg. They chose Sapiens to transform their legacy system in multiple countries with our end to end call solution.

We were selected as the partner not only for our leading cost solution, industry knowledge and expertise, but also because we can accompany them on the entire journey across multiple markets.

Building Insurance operates in Germany, Belgium, Luxembourg, Norway and UK, and Sapiens global footprint and industry expertise in this region make us valuable partner and able to support these types of multinational digital transformation journeys.

And other key win in Europe is a leading multinational insurance company in Portugal, both in the life and non-life that selected Sapiens to implement our insurance solution. This solution will enable the insurer to better manage its global diversified insurance product sales network of insurance business for life and non-life sectors.

A significant competitive advantage in Europe is our ability to offer global carriers a single solution that can be implemented across multiple regions. This complex multi-region deals with Tier 1 insurers will be valuable difference as we expand our leadership position in Europe.

In the UK, we invest in our products and partners ecosystem to expand our offering and address the specific needs of Lloyd’s and London market business. We partnered with Albany Group to integrate its code free Connect with Sapiens code system and provide end to end performance, regulatory and operational control of supply chains.

We also partners with WCL, a solution provider that delivers B2B gateway to manage connectivity and data exchange for Lloyds of London Bureau Services.

Together with Sapiens’ core digital insurance platform WCL Bureau messaging integration will open the distribution to Lloyd’s syndicate for Sapiens global 600 insurance customer base that can leverage for expansion in the dynamic UK market.

On the Life and Annuity Fund, industry analysts Celent awarded Sapiens call suite for life, the 2021 Excellent Award in EMEA in a better of functionality category, and recognize it as a luminary solution, excelling in both advanced technology and breadth of functionality.

This recognition by Celent illustrate Sapiens’ depth of impact, breadth of knowledge and keen understanding of the life and pension insurance industry.

This marks the second time Sapiens call suite for Life and Pension in EMEA was recognized by Celent after winning the 2019 Celent Excellent Award, this award also recognized Sapiens’ strong team of deep domain experts. We are proud that this award validate our product strategy is on trend and sighted due to our continued investment in our platform.

We stay sharper focus on user experience improvement. The current Sapiens user interface is still ahead of many of its fields. Celent recognized the Sapiens call suite for life continue to be primary system within the EMEA marketplace for the insurers. In North America, we see positive and tangible improvements.

A highlight in North America is a new business closing and life and annuity, thanks to the investments in our core solution and business application components.

One of those deals is Guardian Insurers, re-chosen Sapiens cloud native customer acquisition solution, integrating Sapiens illustration and application products for financing their digital operation. This is a core-sell following the successful implementation of accelerated underwriting solution by Sapiens.

In quarter four of 2021, we were selected to perform a blueprint process with North America Carriers for CoreSuite Life, which has been successfully completed. We are now in the last stage of discussion with this customer, adding our digital suite to the solution mix. We expect to initiate the project implementation sooner.

Overall, we see improvement in the pipeline for life and annuity with progress in the final moving to contract negotiation, and the opportunity started in a previous quarter are advancing. We are confident that our life and annuity business in North America will grow in 2022 and build a solid pipeline towards 2023.

Our North America pipeline for P&C is progressing with several deals moving to advanced stage in the sales process. In addition, our existing customer are adding additional product and notably deliver has improved with existing projects. We continue to accelerate investment in product and delivery methods.

And we plan to grow our P&C core businesses by year end. Reinsurance continue to grow steadily, building a solid pipeline for 2022 in North America, after years of using Sapiens financial and compliance solution, Applied Underwriting select Sapiens to also automate the insurance administration accounting, analysis and reporting.

The solution allowed them to replace their legacy process and automate complex accounting tasks to eliminate manual process. We are confident with our product for North America and have additional opportunity in late stage in the pipeline. APAC in South Africa region was strong again in Q1.

Our increased production and market recognition sustained our momentum in this region in the first quarter. In South Africa Sapiens expand our business with the Hollard Insurance company with our cloud native low-code DigitalSuite.

Hollard is already a long-term customer for Sapiens previously deploying our solution for both the life and reinsurance businesses. In addition, another customer in one of South Africa largest financial institution, select to expand relation with us.

Following a successful experience with Sapiens transformation, their P&C eco system to implement Sapiens’ life and annuity solution. These are two examples of upselling to our customer base who both chose Sapiens once again for the next phase for the digital transformation.

Most APAC in South Africa offer growth potential with high demand for our offering. Sapiens product offering is progressing with cloud and digital across the board. Sapiens is prioritized innovation and our R&D investments have bought us real gain and competitive advantage.

As always we have focused our R&D budget, like our cloud and digital and low code offerings, along with DECISION platform, our key growth levers that continue to deliver win. All of the new deals I mentioned this quarter, except one will deliver on the cloud.

One major R&D priority is to continuously enhance the cloud native capabilities of our product portfolio. We also collaborate with both Microsoft Azure and Amazon web services to ensure using innovative and cutting edge cloud capabilities.

Many opportunity such as Guardian and Hollard mentioned above combine a digital component and a core module for Sapiens to allow our customers to progress in digital journey.

Our product strategy is based on providing a digital insurance platform offering a holistic, pre-integrated, connect rich insurance platform covering core processing, digital experience and data analytics and decision management that can be deployed in a full or modular manner following the cloud.

One example is embedding decision without coinsurance to enhance the value proposition for P&C insurers. We're also looking to further continue to development of machine learning and predictive analytics use cases. Lastly, we continuously expand our ecosystem to insurtech partners is increasing the scope of solution we can bring to our customers.

Partnering with this innovative insurtech partners bring value to our clients and help us to improve our value proposition to our clients and even enter to new market as I shared earlier.

Our marketing activities in Q1, it has been such pleasure to engage with scholars, industry experts and customer in person events, and hosts face to face meeting with our clients. The first quarter alone we attend six events in North America and in Europe.

We are exciting to host an intimate and engagement event, we selected executive from North America customer base in the upcoming executive council being held in Nashville Tennessee next week.

Meeting in person and attending live events is critical to creating deep engagement with prospective end customers and key to build a robust pipeline of prospects.

While there may be related increase in travel expenses, these can be offset by boost we can get to our business from the large number of meetings, the efficiency of -- with many customers at industry tradeshow and marketing event.

The marketing team is a full schedule for the remainder of the year, and we look forward to increase exposure it will bring to Sapiens. Looking ahead to the remainder of 2022.

To summarize our first quarter performance show how the core elements of our strategy are delivering growth due to our ongoing commitment and advanced innovation, our product offering continued to be recognized for its excellence in functionality and performance.

Europe remain a dynamic market for Sapiens because our life and annuity and P&C businesses wherever we have a significant runway to take market share. In North America following our focus investments, we see solid progress in our life and reinsurance businesses growth and are encouraged by the future growing in P&C.

APAC in South Africa was another bright spot in the first quarter and this region show promise. Sapiens has established a track record of growth profitability and high cash generation.

Through our strategic M&A and organic growth, we have a high standing in the global insurance market, the Sapiens team worldwide is committed to executing our strategy to deliver growth and improve our shareholder value. Now I would like to turn the call to Roni Giladi, our CFO.

Roni?.

Thank you, Roni. I will begin my commentary with a review of the first quarter 2022 non-GAAP results. All comparison are year-over-year versus Q1 2021 unless otherwise stated. I’ll follow up with comments on the balance sheet and cash flow and we'll wrap up with our guidance for 2022.

Revenue in the first quarter of 2022 increased to $117.7 million, up 6.8% from the first quarter of 2021. Currency headwind versus Q1 2021 was 2.7%. Our organic growth rate without currencies headwind was 9.5%. Our revenue in North America was $49 million compared to $44.8 million a year ago.

On a sequential basis, North America revenue was up modestly from $48.9 million in Q4 of 2021. Revenue in Europe reached $59.3 million, up 2.8% compared to a year ago quarter. Europe region was significantly affected by currency headwinds as Euro, pound, Danish Krona and SEK were weakened against dollar.

On a constant currency basis, our growth would be 8%. Revenue from the rest of world which represent APAC in South Africa grew 20.6% to $9.4 million in Q1 of 2022 compared to $7.8 million in the year ago quarter mainly due to new logo win.

On the global view, the Russia Ukraine war did not affect our revenue as we did not have customer or employee in that region. Although the situation can be escalated and affecting global economy, and obviously Sapiens. Gross profit in Q1 2022 was $52.9 million, up from $49.2 million in Q1 of last year, an increase of 7.5%.

Our gross margin this quarter was 45% higher than 44.7% in the comparable quarter. This result is despite currency headwinds and increase of labor costs. Operating profit this quarter increased to $20.8 million, up 9.3% from $19 million in Q1 of 2021.

Operating margin was 17.6 this quarter, 40 basis points higher compared to 17.2 in the first quarter of 2021. Interest income in Q1 was $348,000 due to income from hedging transaction compared to interest expenses of $575,000 in Q1 of 2021. Tax rate for the quarter was 17.9%.

Net income attributable to Sapiens shareholder for the quarter was $17.3 million, up 16% from $14.9 million in Q1 of 2021. EPS for the quarter was $0.31 per diluted share, compared to $0.27 per diluted share in the first quarter of last year, reflecting EPS growth of 14.8%. EBITDA increased by 8.9% to $21.9 million in the first quarter.

Our adjusted EBITDA margin was 18.6%. Turning to our balance sheet, as of March 31, 2022, with cash and cash equivalents and short term deposits, totaling $206 million, and total debt of $80 million, which we mature in full yearly equal installments until January 2026.

During the first quarter of 2022, we generated the adjusted free cash flow of $16.1 million, compared to $10.6 million in Q1 of 2021. I'd like to turn now to our guidance for 2022. We are reiterating our revenue guidance of $495 million to $500 million for 2022.

On the profit side, we are increasing our non-GAAP operating profit from a range of 17% to 17.3% to higher range of 17.4% to 17.6%. The increase in employee attrition rate and increase in labor costs and additional currency headwinds are offset by higher offshore rate and efficiency measures.

We are confident in our ability to grow while improving profits. We continue to convert our profitability to strong solid free cash flow.

According to our policy, we are declaring cash dividend of 40% of our annual non-GAAP net income, which represent $0.47 per share totaling to approximately $26 million, compared to $0.36 per share, or $20 million in 2021.

Moving forward, we'd like to change our policy to semiannual dividend payout to reflect our confidence in the business of recurring positive cash flow generation. I'd like now to turn back the call to Roni Al-Dor..

Thank you, Roni. Sapiens is well established in a multi-billion market that provides macro tailwind as insurance move from legacy soft sales to digital and cloud solutions. We have established a global presence and look forward to our prospective opportunity during the late stage in the pipeline.

We are taking an active role in shaping the evolving insurance software industry. And our focus growth strategy and increased market demand position us for further success. Operator, we are ready to open the call for Q&A..

The first question is from Surinder Thind of Jefferies..

Good morning, gentlemen. Congratulations on what looks like a fairly solid quarter. I'd actually like to start a question about the gross margins, can you provide a little bit more color on the quality of the gross margins this quarter that came in well above or better than I was anticipating, and then maybe the sustainability of them at this point..

Hi, Surinder, this is Roni Giladi. Gross margin this quarter was 45%, a slightly higher than Q1 of 2021. And basically the same level of the previous quarter, we see improvement of almost 1%. If we need neutralize the currency headwind versus Q1 of 2021. The reason for the improvement are several, I will start with offshore ratio.

As we continue and grow the company, the offshore ratio is increasing and obviously helping us and supporting us to increase gross margin. The attrition rate that went up in recent quarter is not supporting us to deliver the revenue, but eventually if we recruit more in offshore locations also increase offshore ratios. So this is one area.

The second area as we continue to sell our products in the same location as we are doing the same more and more obviously, profitability of each of the implementation is higher. So this is second elements. And obviously third element is internal measure that we are working on them ongoing basis to improve the profit margin..

Got it. And then just a clarification on the offshoring component.

So are you -- would you characterize that as an acceleration in the process? At which point you're able to offshore delivery services?.

I would say that the in the last few quarters the answer for that is yes. Obviously, we are focusing this is the ongoing basis. But then traditionally it went up on a global basis, also supported us to increase the offshore ratio..

Got it. And then in terms of, as I think about the commentary, it sounds like the business environment remains fairly strong.

Can you provide any color there if we were to think about your views from a quarter ago to where they are now, in terms of the conversations you're having with clients? Are you seeing any hesitation? It just seems that things are looking quite good at this point, just any differences in the margin -- on the margin in terms of just those conversations from a quarter ago versus what you're having now..

Okay, so if the question is on the margin, I don't see any pressure on the margin in terms of customer..

I apologize. I didn't mean the operating margins, what I meant is just the difference between the conversations you're having a quarter ago, with clients versus the conversations you're having now.

How should we think about your clients? And what's impacting their decisions in the current macro environment versus a quarter ago? Because obviously, there's been a big change in the macro environment..

Okay, so I will split the answer into two, I would say you APAC together, we do not see, even the state we do not see any micro environment change as of today versus the previous quarter.

Internally, in the state, we see change in the position of Sapiens in Europe and in APAC, we continue to be strong and we have some shift going up in the USA market. This is internally, on a global market. We do not see any change..

Understood. And then just one clarification question here. My last question, in terms of the reiteration of guidance.

How much of that revenue is already locked in meaning that it's, it will come from existing projects, and then how much of that revenue has yet will come from projects that have yet to start or projects that have yet to be won?.

So we are starting a business model of Sapiens that around 10% of our revenue is coming from new logo year-over-year and about 90% of it is coming from existing customers. Either customer that they already post go live and or customers that are in implementation phase. If you ask about obviously, we are past few one.

So everything is locked if we are going forward, the numbers of course less than 10%. And we already signed several customer, we are engaged in several customers that we are very close to sign. So the number is less than 10% of total revenue in Sapiens..

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

Thank you, Roni and Roni, congrats on the quarter.

I wanted to start with a question around just demand, and really my question there is, in terms of clients, are they now more likely to buy the entire core from Sapiens? In other words, are they doing policy billing and claims? Or are they still buying maybe one solution from say Sapiens and then they might go to another vendor for some of the other products on the core side.

And then I wanted to get your thoughts on just overall sort of momentum versus the competition that are playing in the same tiers of the market, whether it's Duck Creek and Guidewire and Majesco and others. Thanks..

Hey, this is Alex Zuckerman, Head of Strategy. So for your question, we see there's a bit of a difference between the European and APAC market. And between the North America markets when we look at the European market, it's much more tending towards full suite deals and encompassing policy billing claims together.

And this is the majority of the deals we are signing in Europe, full suite. What I would like to add on top of that, in a big part of those deals, we don't sell only the core, but we sell at least another component from our product portfolio on top of the core.

It can be an API layer, digital managed services, and data and analytics, at least one of those components typically will join the mix. When you look at the North America market on P&C, I will say to split of roughly 50:50 in terms of the deals we are looking at.

Some of them are full suite and some of them specific components either policy or billing or claims. Many policy and claims we see pure billing base, but we compete on the two types of deals and we see demand on the two sides..

Got it. And then on competition, I sort of combined that question.

But just in terms of your win rates versus some of the other players on the cloud, across the tiers where you play? Are you seeing more competition or your win rates still keeping up? Just maybe any context? That would be helpful?.

Sure. So again, I think here from our perspective, there is a difference between Europe and the US. When we look at the European market, our win rate is very high. And we are continuing the trend that we saw last year. Both on the life side and the P&C side, we're progressing very nice on the deals.

Going to the leading stages and continuing a very high win rate in the North America market. It's more of a mixed type of product, we returned to the market last year with our life proposition with of course with life. And in the year, let's say five quarters that passed since then we see tremendous progress in our pipeline.

And getting closer to close the deal. We just completed the blueprint with one major customer which means it's only us and it’s basically creating the scope for the implementation which we foresee to start soon. We just were selected for another customer in North America. So definitely strong improvement on the life side.

On the P&C side, we see initial signs of improvement of our pipeline and the ability to progress the pipeline. At the moment, we are shortlisted for few deals in North America, P&C shortlisted means it's us and another vendor. And so we see there improvement but we and we hope to see stronger improvement towards the end of the year..

The next question is from Tavy Rosner of Barclays..

Hi, this is Chris Reimer on for Tavy. Thank you for taking my questions and congratulations on a strong quarter. I wanted to just touch on the previous caller’s question regarding the competition.

Do you feel that you're seeing any lengthened deal processes or delayed decision making as a result of increased costs that maybe the insurers are having on themselves? And just how does that relate to the uptick we're seeing in North America? Was that already baked in? Is that what you were already expecting? Versus what you were saying in previous quarters? About the heavier second half of the year?.

So I think the question was the split of two about competition about the uptick in the States, obviously, Q1 versus Q1 2021, we had the going up revenue quarter-over-quarter and staying flat from Q3 to Q4, then to Q1, 2022. We will have I belief in the revenue level in the state towards the end of the year, but they must be not significant.

You will be in an APAC will be the strongest area of growth of Sapiens. USA, North America, this will be single digit growth not significant. But we expect because of all the stuff that we are doing that will follow up in 2023 is double digit growth for North America also. So this was the second part.

Regarding a competition and customer’s adaptation versus delays et cetera. We don't see any material change from a previous quarter in terms of customer behavior. And we don't see at the moment any real impact of the macroeconomic situation on decisions, but we see strong demand in the market.

And if we see delays, there are practical case per case, depending on a deal and not something that we can look at the phenomenon or a trend..

Great, thanks. And just one follow up regarding the increase to the operating margin guidance.

Can you give some color around what's driving that? Is there anything else other than what you've already mentioned? Regarding the offshoring?.

I think we mentioned that on top of offshore and the escalating offshoring pace, there is some efficiency measure that we are taking in place in the company. And the third element obviously, is economy of scale.

We are a year behind the integration of a recent acquisition that we have, that obviously we can improve a portion of efficiency, all of this all together make us to provide these guidance..

The next question is from Dylan Becker of William Blair..

Hey, Roni and Roni. Appreciate you guys taking the questions and a nice job here on the quarter. I guess, maybe first, since we talked about done in the past as well leveraging some of these ancillary components. I know you mentioned the decision solution.

You talked about reinsurance, and maybe in looking more to leverage partners in that higher tier segment, especially in North America as well. How much of that kind of plays into the investments you're making, the benefits of some of the live events you talked about and establishing some of that brand awareness, right.

And then as well, as some of the cross-sell conversations as you look to transition, maybe some of those larger customers to more core based decision makings or discussions as well..

Okay, so let's start several components in your question, try to break it. So on the first part, we are definitely seeing an increase in the demand in deals to provide more than one component from Sapiens.

As I mentioned, in majority of the cases, we sell our new deals in the cloud, which is accompanied by a component of managed services that we provide in the cloud. Majority of the deals include API layer that we provide on top of the core in either components from our digital solution, decision, or our analytic solution.

So definitely this is a platform approach that we promote and this is the spirit of our R&D, how actually to make those different components work together, insurance, with P&C, the digital and data, we see the positive market reaction to this segment.

In terms of partnerships, when we look at our ecosystem in insurtech partner, definitely keeping the work to increase the partner base. Today, I believe we are around 70 partner, ecosystem partners that we operate with globally.

And we have a dedicated team that looks after this segment of the market, canvases it and signed new deals and new partnerships with such companies as needed to progress our penetration to different markets. In terms of our system integration collaboration, we chose to look at it for specific segments of our business.

And for very specific areas, we are working sporadically at the moment with some partners still doesn't have a major impact on our revenue..

I would like to give more light on the core sale.

As Alex mentioned, obviously, we have this old business application, ancillary products that you mentioned, we see a trend that it's starting from I would say the last two years and going up, that all the new deals that we're starting is coming from additional application on top of that, and this is not only ancillary product, because this is also sometimes also co product P&C to life or vice versa.

So this is good rate, and we are trying to duplicate this also for existing customers. And this is an additional initiative that we are looking into to do this..

Yes, that's super helpful color. Thank you both. And maybe Roni G again, here to a lot of the margin expansion again, has been driven by some upscaling of that offshore operations, right.

I guess where do we sit today relative to kind of the mix of those resources? And where again, what's the kind of steady state potential where can we see kind of further expansion as we continue to allocate more heads to those offshore areas..

We are at the end of Q1 2022 We are sitting at about 47% the offshore ratio, this is a combination of R&D and delivery team members, almost for all product of phase Sapiens company, R&D and delivery, we see additional potential growing this number in the coming years that they can add additional a few 100 basis point to our operating margin, I would say this as a midterm goal not immediate one, because we need to keep the knowledge, 20 people over time we can do this.

Today we are operating in several location offshore I mentioned few for example, India, Poland, and Lithuania. And we are thinking also potentially down the road to open additional location to support of this growth and profit margin..

There is a follow up question from Surinder Thind of Jefferies..

Thank you. In terms of just the M&A environment valuations any color you can add there in terms of your pipeline or just what you're seeing in the marketplace and deal flow..

Yes, this is good question. As you know, we like to do M&A but we still see a high valuation for the company that we are looking for. We did the few almost due diligence, like early stage, but we walked away because the high valuation, many those few things happened in Europe. But it still the valuation is very high..

If I add more color, we see the private companies following the public markets, probably in delay. We still see them on high valuation is only mentioned. But down the road, I would say a few months, let's say six months, we think you will see a decrease in valuation also for private companies, when will participate in this..

The next question is from Omri Lapidot of Leumi Partners..

Yes, hi. I also wanted to ask about the M&A front. So I guess you answered for me. Thanks. There are no further questions at this time. Before I asked 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 US, please call 1-888-269-0005 and Israel, please call 039-255-938 and internationally, please call 972-39255-938. Mr.

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

Yes, definitely. Thank you for joining us today. We look forward to speaking with you again in our next earning calls. Please note that we are hosting virtual one-on-one meetings at Needham Technology and Media Conference on Monday, May 16. Reach out to your Needham representative to schedule in one-on-one meeting. So thank you..

Thank you. This concludes the Sapiens International Corporation first quarter 2022 results conference call. Thank you for your participation. You may go ahead and disconnect..