ROCHELLE PARK, N.J., May 8, 2025 -- Sapiens International Corporation, (NASDAQ: SPNS) (TASE: SPNS), a leading global provider of software solutions for the insurance industry, today announced its financial results for the first quarter ended March 31, 2025.
Summary Results for First Quarter 2025 (USD in millions, except per share data) | ||||||
GAAP | Non-GAAP | |||||
Q1 2025 | Q1 2024 | % Change | Q1 2025 | Q1 2024 | % Change | |
Revenue | $136.1 | $134.2 | 1.4 % | $136.1 | $134.2 | 1.4 % |
Gross Profit | $60.7 | $57.6 | 5.4 % | $63.0 | $60.9 | 3.5 % |
Gross Margin | 44.6 % | 42.9 % | 170 bps | 46.3 % | 45.4 % | 90 bps |
Operating Income | $21.2 | $20.5 | 3.3 % | $24.6 | $24.3 | 1.2 % |
Operating Margin | 15.6 % | 15.3 % | 30 bps | 18.0 % | 18.1 % | -10 bps |
Net Income (*) | $17.9 | $17.4 | 3.3 % | $20.7 | $20.4 | 1.3 % |
Diluted EPS | $0.32 | $0.31 | 3.2 % | $0.37 | $0.36 | 2.8 % |
(*) Attributable to Sapiens' shareholders | ||||||
Roni Al-Dor, President and CEO of Sapiens, stated, "We delivered a strong start to 2025, advancing our strategic growth priorities, signing deals with new and existing customers, and signing two successful targeted acquisitions. The addition of Candela and AdvantageGo significantly expands our global footprint and innovative solution breadth, reinforcing our position as a leader in both Life and P&C."
Mr. Al-Dor continued, "We continue to see steady increases in demand for our AI-driven insurance platforms, strong customer adoption of our SaaS model, and are proud of our team's relentless efforts on generating results. Innovation is in our DNA, and with the healthy state of our current pipeline, we remain confident in our ability to drive long-term value creation for our customers and shareholders alike."
"We are well-positioned to continue our positive momentum from the first quarter throughout the remainder of the year," concluded Mr. Al-Dor. "We are raising our 2025 guidance for non-GAAP revenue to the range of $574 million to $578 million from the previous $553 million to $558 million."
"Our non-GAAP operating profit is expected to be in the range of $94 million to $96 million, with an operating margin of 16.5% at the midpoint. This compares to the previous guidance of $98 million to $102 million."
"Our 2025 operating profit guidance reflects favorable currency movements. However, this is expected to be offset by losses associated with AdvantageGo and integration costs related to both the Candela and AdvantageGo acquisitions. The total aggregate negative impact on 2025 operating profit is approximately $5 million at the midpoint."
Quarterly Results Conference Call
Management will host a conference call and webcast on May 8, 2025, at 9:30 a.m. Eastern Time (4:30 p.m. in Israel) to review and discuss Sapiens' results. Please call the following numbers (at least 10 minutes before the scheduled time) to participate:
North America (toll-free): 1-888-642-5032
International: 972-3-918-0609
UK: 0-800-917-5108
The live webcast of the call can be viewed on Sapiens' website at the following link. A replay of the call will be available one business day following the completion of the event at the same link for 90 days.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: non-GAAP revenue, ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributed to Sapiens shareholders, non-GAAP basic and diluted earnings per share, Adjusted EBITDA and Adjusted Free Cash-Flow.
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.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of capitalized software development and other intangible assets, capitalization of software development, stock-based compensation, compensation related to acquisition and acquisition-related costs, and tax adjustments related to non-GAAP adjustments.
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.
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 Annual Recurring Revenue ("ARR") as the annualized value of our revenue from customer subscriptions, term licenses, maintenance, application maintenance, and cloud solutions, which may not be the same as the timing and amount of revenue recognized. The ARR run rate is equal to the product of (i) the sum of these revenues in our most recently completed fiscal quarter, multiplied by (ii) four.
The Company defines Adjusted EBITDA as net profit, adjusted to stock-based compensation expense, depreciation and amortization, capitalization of software development costs, compensation expenses related to acquisition and acquisition-related costs, financial expense (income), provision for income taxes and other income (expenses). These amounts are often excluded by other companies as well, in order 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 reflects 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. The Company uses Adjusted Free Cash-Flow as a measurement of its operating performance, and reconciles cash-flow from operating activities to Adjusted Free Cash-Flow, while reducing the amounts for capitalization of software development costs and capital expenditures. The Company adds back cash payments made for former acquisitions in respect of future performance targets and retention criteria as determined upon acquisition date of the respective acquired company, which were included in the cash-flow from operating activities. We believe that Adjusted Free Cash-Flow is useful in evaluating our business, because Adjusted Free Cash-Flow reflects the cash surplus available to fund the expansion of our business.
About Sapiens
Sapiens International Corporation (NASDAQ and TASE: SPNS) is a global leader in intelligent insurance SaaS-based software solutions. With Sapiens' robust platform, customer-driven partnerships, and rich ecosystem, insurers are empowered to future-proof their organizations with operational excellence in a rapidly changing marketplace. Our SaaS-based Solutions help insurers harness the power of AI and advanced automation to support core solutions for property and casualty, workers' compensation, and life insurance, including reinsurance, financial & compliance, data & analytics, digital, and decision management. Sapiens boasts a longtime global presence, serving over 600 customers in more than 30 countries with its innovative offerings. Recognized by industry experts and selected for the Microsoft Top 100 Partner program, Sapiens is committed to partnering with our customers for their entire transformation journey and is continuously innovating to ensure their success. For more information visit sapiens or follow us on LinkedIn
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