Sapiens Reports Record Quarterly Revenue of $38.6 Million
Non-GAAP Operating Profit increased by 19.6%
For the full financial results click hereIcon-PDF
Sapiens International Corporation,(NASDAQ and TASE: SPNS), a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector, and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), announced today its financial results for the second quarter ended June 30, 2014.
Second Quarter Highlights:
Non- GAAP Revenue increased by 16.9% to $38.6 million from the second quarter of 2013
Cash, cash equivalents and securities investments as of June 30, 2014 was $79.8 million, with no debt.
Launch of Sapiens Retirement Services Platform, the next generation of technology for the defined contribution retirement services industry.
Released Sapiens IDIT core version (11.2) which increases the number of out of the box standard web-services and provides new framework for country level interfaces.
Acquired KPI, owner of “The Decision Model” patent and a leading decision management consultancy firm.
Non- GAAP operating profit was $4.0 million compared to $3.3 million in the second quarter of 2013, an increase of 19.6%.
Non-GAAP net income attributable to Sapiens’ shareholders increased by 13.0% to $3.6 million, or $0.07 cents per diluted share compared to $3.2 million.
First half Highlights:
Non-GAAP revenue increased by 16.6% to $75.3 million from the same period of 2013.
Non-GAAP operating profit was $7.7 million compared to $6.7 million in the first six months of 2013, an increase of 14.2%.
Non-GAAP net income attributable to Sapiens’ shareholders reached $7.0 million, compared to $6.6 million in the year ago period, an increase of 6.0%.
Roni Al-Dor, President and CEO of Sapiens, commented: “This was another strong quarter in which we delivered double-digit revenue and operating profit growth. We continued to make strategic investments in sales, marketing and product development, without compromising current period profits or margins. Our market presence was expanded as we booked growth from both new and existing clients and qualified new opportunities to expand our pipeline across all geographies and products. Clearly, we are executing and delivering on our near-term commitments for growth while balancing profitability and investments for the longer-term potential of the company.”
Mr. Al-Dor concluded, “Our business plan remains solid and we are confident in our ability to deliver full-year 2014 revenue in line with our guidance of $154 million to $158 million.”
Quarterly Results Conference Call
Sapiens management will host its earnings conference call today, August 12th, 2014 at 9:30 am EDT, 4:30 pm Israel, to discuss the results. To participate in the call, please dial in to the following numbers: United States + 1.888.407.2553; International: +972.3. 918.0644; UK: 0.800.917.5108. The call will be webcast live on the Company’s website at https://www.sapiens.com/investors/presentations-and-webcast/. An online replay will also be available approximately two hours following the call. A telephone replay of the call will be available for 7 days after the live broadcast, and may be accessed by dialing: North America: +1.888.254.7270; International: +972.3.925.5904.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Non-GAAP revenue, Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income attributed to Sapiens shareholders, Non-GAAP basic and diluted earnings per share.
Sapiens believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Sapiens’ financial condition and results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.
Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Sapiens urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.
Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables of this release.
The Company defines Adjusted EBITDA as net Profit, adjusted for stock-based compensation expense, depreciation and amortization, capitalized internal-use software development costs, Amortization of internal-use software development costs interest expense, provision for income taxes and other income (expenses). These amounts are often excluded by other companies to help investors understand the operational performance of their business. The Company uses Adjusted EBITDA as a measurement of its operating performance because it assists in comparing the operating performance on a consistent basis by removing the impact of certain non-cash and non-operating items. Adjusted EBITDA reflect an additional way of viewing aspects of the operations that the Company believes, when viewed with the GAAP results and the accompanying reconciliations to corresponding GAAP financial measures provide a more complete understanding of factors and trends affecting its business.
Sapiens International Corporation (NASDAQ and TASE: SPNS) is a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector. We offer core, end-to-end solutions to the global general insurance, property and casualty, life, pension and annuities, and retirement markets, as well as business decision management software. We have a track record of over 30 years in delivering superior software solutions to more than 130 financial services organizations. Our team of more than 900 professionals operates through our fully-owned subsidiaries in North America, the United Kingdom, EMEA and Asia Pacific.
Forward Looking Statement
Some of the statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as “will,” “expects,” “believes” and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 3 of Part III of our Annual Report on Form 20-F for the year ended December 31, 2013 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.
Investors and Media Contact: Yaffa Cohen-Ifrah
Vice President Corporate Marketing and Communications
Phone: +972-3-790 2026