Sapiens International Corporation N.V. (NASDAQ:SPNS) Q3 2019 Earnings Conference Call Transcript

Nov 04, 2019 • 09:30 am ET

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Sapiens International Corporation N.V. (NASDAQ:SPNS) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Sapiens International Corporation Third Quarter 2019 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 November 4th 2019. It is now my pleasure to introduce your host, Ms. Yaffa Cohen-Ifrah, Sapiens CMO and Head of Corporate Communications. Thank you Ms. Cohen, you may now begin.

Executive
Yaffa Cohen-Ifrah

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 Sapiens today are Roni Al-Dor, President and CEO in 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 apply 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 view or expectations or otherwise.

During the course of today's call, we will refer to non-GAAP financial measures. A reconciliation schedule showing GAAP versus non-GAAP result 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 earning release that we published today. I will turn the call over to Roni Al-Dor, President and CEO of Sapiens. Roni?

Executive
Roni Al-Dor

Thank you, Yaffa. And thank you for joining us today to review our third quarter 2019 financial results. We entered to the second half of 2019 with strong pipeline of business and our momentum continued to build going into year end. The outstanding third quarter results demonstrated continuous solid execution against our 2019 priorities of topline goals and margin expansion. Topline, non-GAAP revenue in Q3 2019 increased 12.8% year-over-year, primarily due to the expansion in our P&C division and initial growth in our life annuity division.

The global focus on our key objective to leverage our offshore capabilities, along with improved economics of scale drove a non-GAAP operating margin improvement of 240 basis points versus Q3 2018. We continue to invest in our North America segment which is strengthening our pipeline for next year and improving our capability to deliver on current projects. The outlook for our industry remains robust and we are benefiting from global industry trends that are driving our growth. These include first and foremost, technology and digitalization which are the overriding drivers touching all aspects of the insurance industry.

Second, consumer expectation for streamlined interfaces and digital access. As we engage in renewed M&A activity, we are looking to add capabilities, customers and penetrate into new geographies. We are confident that we have the platform to support the long-term topline