Sapiens International Corporation N.V. Price & Performance (SPNS)

Statements 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. On today's call, will refer to the non GAAP financial measures A reconciliation of GAAP to non GAAP results has been provided in our press release, which was issued before the market opened this 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 Azdor, President and CEO of Sapiens.

Good morning, everyone, and thank you for joining us today for Sapiens fourth quarter twenty twenty four earnings call.

Our revenue in Q4 was $134,000,000 a 2.6% increase compared to last year. This quarter showcased solid execution across our key regions of our Covid-nineteen businesses. In quarter four, we signed over 15 deals with new and existing customers across Life and P and C. Since the launch of our insurance platform in June 2024, successfully closed three platform deals globally reflecting the positive impact of our insurance platform.

Overall, in 2024, we signed 36 deals new and existing customer we continue to transition existing customer to the cloud ending the year with total of 169 customers on the second cloud and we see a great potential to accelerate the cloud transition.

Let's drill down into our original performance. First, as promised, our America businesses delivered robust growth in 2024. During Q4, we closed five wins with new and existing customers, These wins reinforce insurance trust in seconds to innovate and drive business transformation enabling them to remain competitive. Our Life and Annuity businesses continued to expand in quarter after a few successful North America Go Live and upgrade for our business application.

Also continue to grow with new logos.

The pipeline for North America Life businesses is robust reaching historical levels.

Recognizing our commitment to product innovation one of our key investment areas and growth driver SETTENZ has been honored for the third consecutive time by Celent. We received the 2024 Excellence Award for customer base and support for our underwriting core for life and annuities in North America. Reinforcing our leadership in life underwriting solutions. These awards recognize Sapiens' exceptional solution that empower insurers to streamline their processes and achieve superior customer outcomes. Let me switch to discuss our cost with P and C in America for 2024. In Q4 of twenty twenty four, a leading property and casualty underwriting agency, a provider of solution for specialty insurance needs, including flood and fine art, [indiscernible] Complementing their core solution of PolicyPro and Claims already in production These go live with additional application is an example of how our insurance platform enables customer upselling. Overall, the P and C team in all America completed over 10 upgrades projects this year seen customers upgrading the entire policy suite billing and claims. Additionally, we executed the cloud transformation for Tier two insurance carriers that provide specialty risk solution across North America. These projects includes upgrading to our latest policy portal release which will be completed in early twenty twenty five.

In quarter four, we released version [indiscernible] Significant improvement operational monitoring functional enhancement and integration to second digital suite for both and the consumer and several insured partners. These enhancements provide our customer with additional capabilities and improvements that enable businesses' growth and enhance platform efficiency easy to use distribution and automation, Seffens continue to invest in North America P and C platform, with data suite integration set for 2025. Which enables AI automation and advanced analytics. The launch of our P and C platform with the product upgrades will help to enhance our competitive position in North America market In alliance with our go to market strategy, of driving increased connection to our data and digital platform offering. Moving to Europe, and to the rest of the world. In Q4, we signed 10 deals across Life and P and C, with new logos as well as existing customer in Europe, and the rest of the world. We have had several successful go like projects for customers with our CoSuite Life solution, Editsweet TSSuite and Reinsurance Master. In the European market, demand for SAP and solution remains robust. As evidenced by our growing pipeline. There is a continued demand for SaaS platform across all solution lines and tiers.

We are also experiencing increasing demand for AI driven solution as clients increasingly wants to leverage AI to enhance operational efficiency and elevate customer experience. In TMC, the demand for second solution remains strong despite the extended sales cycle as evidenced by improved deal close momentum at year end. In the fourth quarter, we signed new P and C deals with both new and existing customers in Europe and rest of the world. I want to highlight a few new wins this quarter, including a leading second customer in the Nordic region to migrated to the second cloud with a significant SaaS agreement leveraging our Microsoft Cloud strategy and investments. In APAC, we continue our market expansion and strong momentum and close an important P and C platform deal with a leading insurer This is our first win this country, Another highlight is GoLive Recetence Data Suite For Our Long Standing Customer Base In Africa. Having been with Sapiens for nearly two decades, this Tier one customer migrated its data platform to the cloud in a consolidated enterprise wide view to improve performance and productivity while enhancing security and the overall user experience. A few comments on like and pension.

This quarter, we signed a new platform deal in Europe We also completed several go lives in the region. Demand for second slide platform remains strong as demonstrated by our growing pipeline. In RFPs coming to the market and Sapiens. Indicating strong market demand across Europe, and South Africa. [indiscernible] sales cycle in the life tend to be more extended than P and C as the offset deal size are much larger. Moving to reinsurance. We continue to expand in North America, Europe and APAC with our Reinsurance Master and Reinsurance Pro solution.

And in this quarter, we closed new deals with new and existing customers, let me highlight a couple. In North America, an existing customer, the leading global insurance and investment provider for commercial P and C insurance [indiscernible] A major European to modernize its highly specialized London market operations. This is the first London market insurer to utilize Sapiens' innovative London market operational reporting services and underwriting supporting messages feature for reinsurance master. Lastly, we closed the reinsurance master deal On the product front, in the third quarter, we rolled out the Sapiens Decision Underwriting Accelerator cutting edge solution designed to enhance underwriting efficiency and significantly improve straight through processing for property and casualty insurers. As I mentioned earlier, we launched our AI based Sapiens insurance platform in June 2024 Sapiens. The platform specialized in meeting the unique requirement of each business vertical ODDIMIN We are integrating AI across our core data and digital to enhance automation, improve decision making, and drive greater efficiency for insurers. In April, Smarter Underwriting more accurate risk assessment and streamline claims processing by embedding AI driven capabilities into our core system. Our AI powered solution leverage advanced data analytics and machine learning to provide actionable insight optimize workflows and enhance operational agility.

Second, Sapiens Intelligence SaaS solution will help insurance modernize their operational improvement, customer experience and stay ahead in digital and data driven We are focused on connecting the power of generative AI We see now comprehensive vision of using AI to drive business operations. Our latest platform release demonstrates this focus incorporating powerful AI capabilities, that enable both efficiency and decision making. For agent and broker, our platform delivers a digital portal offering three sixty degree view of customer and prospects combining [indiscernible] QA Know Your Customer and a suite of machine learning models for strong risk assessment and predictions. Claim handlers and underwriters benefit from our Copilot Gen AI capabilities which exponentially amplified their ability to manage tasks.

Additionally, we have streamlined business rules configuration, enabling the creation of decision trees and rules via Gen AI and automated data mapping for documents and letter using [indiscernible] Looking ahead, we have reached a roadmap to create holistic and Gen AI copilot experience across the entire platform further enhancing the value Our strategic partnership with Microsoft is instrumental in driving our product innovation which is cutting edge AI technology that differentiates our platforms digital transformation capabilities In January 2025, we announced the availability of Sapiens SaaS solution the Microsoft Azure Marketplace. Microsoft Azure customers can purchase Sapiens SaaS solution, enabling them to leverage Azure scalability reliability and agility to drive their application development and shape their business strategies. Moving to system integrators, Sapiens continued to make progress this quarter in its collaboration with system integrators. This emerging channel is open doors to insurers that we're previously beyond our reach expanding our market opportunity and our pipeline. In 2024, Sapiens formalized a commitment and internal process to support MSI alignment model for our go to market and delivery. As a result, in 2024, We close a significant light platform deals in North America with the SI partner Also SI were involved with a Sapiens continued to strengthen its existing partnership with Deloitte globally with LTI ManTree in North America.

We also developed new partnership with Scoforged, Lorina Cognizant and other regional SI. We are excited about the outcomes our growing SI relationship deliver, will continue to develop this valuable channel as a top strategic initiative 2025. Before I wrap up, I would like to share our focus for 2025. Our commitment to building a robust pipeline and expanding our client base across all key markets remains solid. To support this commitment, and achieve our goals in 2025 and beyond, we have identified the following areas of focus for our teams and our resources. First, plateau innovation and advanced AI capabilities. We will continue to invest in Second's intelligent insurance platform focusing on innovation and client success aims, to drive sustainable growth globally and improve our competitive position. We will continue to actively integrated AI in into our offering enhance various aspects of our customer operation. In addition, we are integrating AI tools into our implementation and delivery process reduce implementational costs. Second, [indiscernible] Cross selling to existing customer presents a significant opportunity for growth especially considering that most of our customer current only have one sequence product, We have done extensive analysis to validate the cross selling opportunity for our core business application, data, digital AI and decision solution.

By identifying and targeting the specific need of our customer. Can introduce them to additional solution that complement their existing solution. We are also increasing our investment in the client management and relationship building expanding our client partners team and our account management team, see in our divisions This effort extends across our entire customer base, to drive deeper relationship maximize customer value, and unlock new growth opportunities. Cost selling has a shorter sales cycle compared to acquiring new customers allow us to achieve faster revenue growth Third, accelerating cloud adoption for our existing customer through a scalable and efficient SaaS model. This transition supports our long term customer relationship and we drive sustained growth and value creation.

We now have a unique opportunity accelerate cloud adoption. As our new SaaS solution offer exclusive benefit such as AI driven capabilities that are not available in older versions.

Four we aim to enhance our growth in our life and pension and annuities businesses globally. The demand for life system transformation is strong [indiscernible] to modernize legacy infrastructure, This market shift presents a significant opportunity for our life offerings. Sapiens Life solution featuring market leading components seamlessly integrated into a powerful platform provide a strong competitive advantage and differentiation This position us as a market leader and we are already gaining significant momentum. Our objective is to capitalize our momentum Pipeline which currently is the highest among all Sapiens products. And lastly, we continue building out our system integrator partnership globally. In 2025, there will be a focus on developing a new pipeline with SI partners by formalizing enablement, training, certification and joint delivery models to continue to support the strategy. There will be an increased focus on maturing the model in North America to support the growth plan in the region. In summary, Q4 twenty twenty four marked another quarter of growth and operational progress. And we remain committed to delivering long term growth across all of our key territories. I will turn the call over to our CFO, to provide more details on our financial performance. Thank you, Oney.

I will begin my commentary by reviewing the fourth quarter and full year 2024 non GAAP results followed by comments on the balance sheet and cash flow. I will wrap up with our guidance for 2025.

Revenue in fourth quarter of twenty twenty four totaled $134,000,000 an increase of 2.6% compared to $131,000,000 in the fourth quarter of twenty twenty three. In Q4 twenty twenty four, had currency headwind compared to Q3 of twenty twenty four. On a constant currency basis, our Q4 revenue $2,000,000 higher than the reported Q4 revenue. Reported revenues for Q4 and the full year were in line with the updated guidance we provided last quarter despite the currency headwind [indiscernible] For Q4 twenty twenty four, our annualized recurring revenue [indiscernible] [indiscernible] $175,000,000 reflecting 6.5% decays from Q4 of last year. Higher than the total reported revenue growth during the same period. Our revenue mix show that revenue from recurrent software products and reoccurring postproduction services increased year over year by 7.7% to $97,000,000 compared to $90,000,000 in Q4 twenty twenty three. [indiscernible] Growth of this segment was higher than the overall reported growth in line with our strategy to increase recurring and recurring revenues. I want to emphasize that recurring and recurring revenues in Q4 twenty twenty four represent 72.5% of total revenue.

Reflecting 3.4% in his compared to Q4 of last year.

Moving on to profitability. [indiscernible] Gross profit in the quarter was $63,000,000 compared to $59,000,000 in Q4 of twenty twenty three. The gross margin in the quarter was 46.7% compared to 45.4% in Q4 of twenty twenty three.

Representing an increase of 130 basis This increase in gross margin [indiscernible] due to higher recurring and recurring revenue ratio of total revenue with high gross margin than gross margin from one time implementation.

Operating profit in the fourth quarter of twenty twenty four was $24,000,000 similar to Q4 twenty twenty three.

Net income attributable to Sapiens shareholders for the fourth quarter of twenty twenty four was 21,000,000 up 3.1% from 20,000,000 in Q4 of twenty twenty three.

Earnings per share [indiscernible] $0.37 for the fourth quarter of twenty twenty four up from $0.36 of the fourth quarter of last year. Turning now to full year results. For the twelve months, ended 12/31/2024. 2024 revenues [indiscernible] $542,000,000 5.4% compared to $515,000,000 in 2023. We met our full year updated revenue guidance which we provided in Q3. Despite the currency headwind happened in Q4. [indiscernible] Turning to revenue mix. In 2024, revenue from recurrent software product and reoccurring postproduction services [indiscernible] $390,000,000 compared to $342,000,000 in 2023. A $48,000,000 increase or 14.1% growth This recurring and real care and revenue [indiscernible] 72% of our total revenue in 2024. Moving to geographic breakdown. Revenue in North America represent 42% of total revenue Our European revenue represents 50% and rest of the world represent 8% Growth in 2024 from growth of 6.3% in North America 4.9% in Europe and 3.7% in rest of falls. We do not have customer concentration. As evident by the fact that our top 10 customers represent 21.5% of revenue, with no customer representing more than 5% of total revenue. Gross profit increased by $16,000,000 in 2024 while gross profit margin increased by 60 basis points to 45.9%.

The main reason for the gross margin improvement are a better ratio of free care and real care and revenue than last year improved in offset ratio. Our operating profit increased by $5,000,000 or 4.8% The operating margin was 18.2%. Which is in line with our guidance. Despite the increasing gross margin of 60 basis points our operating margin declined by 10 basis points versus twenty twenty three. [indiscernible] Due to our strategic decision at the beginning of the year, to increase investment in sales and marketing, in absolute dollar and as a percentage from total revenue. Net income 10.5% from $75,000,000 in 2023. Earnings per diluted share [indiscernible] $1.48 9.6% from $1.35 in 2023. Turning now to our balance sheet. As of 12/31/2024, we had cash and cash equivalent and short term deposits totaling [indiscernible] of $40,000,000 In January 2025, we paid the annual debenture coupon 20,000,000 last and final payment of $20,000,000 is scheduled for January 2026. [indiscernible] Turning to adjusted free cash flow. In Q4 twenty twenty four, we generated an adjusted free cash flow of $41,000,000 compared to $37,000,000 in Q4 of twenty twenty three. June 2024, we generated adjusted free cash flow of $75,000,000 compared to 71,000,000 in 2023.

Our adjusted free cash flow [indiscernible] 89.5% of our non GAAP net income proving our business model of converting net profit to free cash flow. Let me now introduce our guidance for 2025. [indiscernible] Non GAAP revenue in the range of $553,000,000 to €558,000,000 representing loss of 2.4% at the midpoint. This loss assume a currency headwind [indiscernible] mainly to the euro and pound. Which have weakened by percent and two percent, respectively. Versus The USA dual out. On a constant currency basis, our growth rate would be 3.4%. Profit Non GAAP operating profit in the range of $98,000,000 to $102,000,000 with operating margin of 18% at the midpoint. On a constant exchange rate, our operating profit would be higher and implies an operating margin of 18.7%.

The negative currency impact on operating profit is mainly due to the euro and pound weakening versus the U. S. Dollar and the strengthening of the Israeli shekel versus the U. S. Dollar. Let me elaborate on the factors impact in our 2025 guidance.

In Q3 twenty twenty four, earnings calls we discussed the factor impacting 2024 and 2025 growth Transition to SaaS ProP and C North America and macroeconomic uncertainty. We will now provide an update on this as they relate to our growth outlook. Transition to SaaS We anticipate a similar impact on growth in 2025.

As we mentioned in the earning call of Q3.

With the transition of existing customer and the signing of new SaaS contracts, expected to create an estimated 2% to 3% revenue headwind. Core P and C in North America, Ronny Zdov mentioned in his remarks that we are making strategic investment P and C platform. And are already seeing early positive indicators. We expect this effort to provide contribution starting in 2026 And Macroeconomic uncertainty [indiscernible] To persist across global markets including North America, Middle East and other regions. We do not control these factors and cannot predict restabilize Those macroeconomic factors can lead to delay in signing new deals which can in turn impact our revenue growth. As mentioned, those three factors that emerge in 2024 will impact our growth in 2025. In late Q4 of twenty twenty four, we had a strong deal closing momentum. Even with this strong deal closing momentum, The timing of these closing effects the pace of revenue realization 2025.

And as a result, our overall growth I want to reiterate that we remain focused on accelerating the growth Trajectory, To accelerate our growth beyond 2025, are taking the following steps. One, expanding new logo acquisition globally. We are strengthening our sales team in producing our comprehensive insurance platform. And deepening our relationship with System Integrator. Since we started, our initiatives to work with SI we signed two new logos through SI partnership. Driving cross sell opportunity with existing customer. We are expanding our team and leveraging our pre integrated insurance platform as a key enabler to cross sell additional application maximize customer value. In 2024, [indiscernible] Gross selling grew by 8% compared to last year. [indiscernible] advancing the transition of existing customer to cloud and subscription. In 2023, we successfully migrated seven customer to the cloud followed by additional 10 Cloud migration in 2024. The total number of cloud customer at the end of twenty twenty one hundred and sixty nine and we are focused on accelerating this momentum in the coming years. Currently, 28% of our customers are on the cloud. And our goal is to reach over 60% of our total customer within the next five years.

Reinforcing our commitment to long term growth in higher ARR ratio. Before handing the call back to Roni El Dor, I want to reiterate that we remain focused on successful execution of our strategy prioritizing sustainable growth I will now turn the call back to Onieldo. Thank you, Ronnie. We delivered a solid fourth quarter reflecting the progress across our key markets, our continued investment in our insurance platform remains a critical driver for growth. Most importantly, we are committed to deliver long term growth across all of our key territories and reinforce our position as a trusted provider of intelligent insurance solution. I want to thank our global team for their commitment to excellence and growth and our investors for their ongoing support of Sapiens. I will now ask the operator to please open the call for questions.

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. Poll for your questions. The first question Dylan Becker of William Blair. Please go ahead. Hey, guys. [indiscernible] Sticking with some of the 2025 initiatives, you called out kind of cross selling and obviously accelerating migration framework. You touched on a lot of the cloud customers, landing little wall to wall having that kind of full suite adoption of your confidence in those two initiatives given you do have a vast ecosystem of customers to migrate, and it seems that their propensity to kind of spend more and adopt more of the core platform continues to grow in the cloud as well. Yes. Hi.

This is Ronny A. As to answer your question about the cloud and the platform, In both area, we feel very comfortable We are are migrating many, as we said, but we have huge potential for both [indiscernible] And this is also in our core core platform, core system, also the business application as well. For the new clients, we are this is almost standard. So it's 99% are going with these two solutions from the existing There is still many opportunity ahead of us. At this moment, we are more try to convince the customer to both but we are not pushing and this is the our plan for the future for in the upgrade situation that they will have to push them to the cloud. So that's for my side. Maybe Alex want to add? So then just to add to what Roni said, this is Alex. When it comes to the existing customers, so again reiterate what Roni said. We increased the pace focus on that to reach the 60% level within the next five years. This is one clear target. [indiscernible] notion of the platform allows us to come back to our customer to the existing customer base and find their missing solutions that we can provide.

So we see a lot of white space within our customer base, and the connectivity of the platform it means for them that there is a strong economy of scale and usability by taking those models from us and from someone else this is part of our offerings. Also there, we see lots of interest, and the plan is to [indiscernible] In order also to facilitate that, not on the product side, but sell side, we increased [indiscernible] The team at Sapiens that looks after existing accounts And we are encouraging them to to grow stronger after this customer base. Maybe one more sentence into that This year, we've been able to transfer 10 existing customer to the cloud. We see also increasing momentum on this opportunity We've also been able to transfer big accounts that give a confidence that we are being able to do this with many customer of us going forward And this give us the notion of reaching 60% in five years.

Got it. Okay. Thank you all. That's really helpful. Maybe to the life side, seems to be another area of notable strength. You kind of give us a sense maybe the dynamics obviously on that space that pushing for faster modernization now? And maybe how we can kind of reconcile that or look back as some of the trends you've seen play out or you're seeing play out maybe on the life side relative to how the P and C modernization opportunities played out over the last several years to extent that sounds really exciting as well. [indiscernible] So this is Alex again. So what we've seen on the life insurance space globally strong focus on North America, but also in the rest other parts of the world, strong emphasis of carriers to replace systems and to drive modernization on the life side. What we've seen in the past five to seven years in the P and C market is happening now on the life side. The P and C went a bit before the life into this replacement. And into this modernization process in general. Now we see strong standards on the life side. It's a combination of factors.

One is the overall digitalization of the world. The strong competition that requires them to be tech savvy The second part is the macroeconomics, the volatile market the interest rate, the inflation, they all drive to stronger adoption of life insurance especially on the individual side as it comes as a solution to the individual market. This is a great momentum for us also from timing perspective coming into the North America market with the platform approach that on this case provide a strong differentiation several leading products and capabilities as a standalone basis to combine them into an holistic Combined offering that really ticks the boxes for for the majority of needs of our customers, and we see great adoption on the platform notion competition in the market. So we feel very, very strong on the combination of we have the right offering to the market, powerful platform approach together with the macroeconomic that drives adoption to their life feel we have a strong opportunity here. [indiscernible] There. Maybe one last clarification on for Ronny G. Here. You guys gave out the constant currency revenue number and impact into 2024, but any sense on constant currency from an ARR perspective in the quarter and how to think about '25 given the postproduction strength Thank you.

We grew this quarter 6.4% on the ARR [indiscernible] versus lower number 2% or 2.4% in the quarter in total revenue. Obviously, the ARR is growing faster [indiscernible] the ARR. We need to add additional 1%. So are 7.4% ARR growth in the company today. We are looking to increase this ratio going forward going to 02/2005, 02/2006 and going onwards. And as we mentioned, we'd like to do a transition to the cloud, which will support this ARR what we discussed a minute ago. And obviously, obviously, all the new customer are automatically on the cloud on subscription based. So both of these factor will impact their growth and increase the growth rate 10% and onwards.

Great. Thank you, guys. The next question is from Chris Reimer of Barclays. Please go ahead.

Hi.

Thanks for taking my question.

Was wondering you had been thinking about M and A in the pipeline and a while since there's been any acquisitions by you guys. Just wondering what's your thinking on that right now given the environment [indiscernible] continue. Obviously, M and A is part of our growth And therefore, we are pursuing for this opportunity You are right. In the last three two to three years within complete any M and A. The main reason two years ago was the valuation. And right now, we are in let's say, reasonable market in terms of valuation. Internal Team That's Looking For That And We Are Pursuing Several Opportunities Across The Globe North America and Europe We are focusing on mid to small companies, potentially sometimes when there is opportunity, we are looking also for big organization. I can emphasize that during 2024, we had good opportunity in the European markets both on P and C and Life. We compete with several competitors to do this acquisition. And then came to the final two. And we lost again based on valuation the price at the last point was unreasonable to us and we dropped I'm mentioning this to show the confidence that we are really engaged in this opportunity, and we are looking in 2025 to complete at least one M and A in the next until the end of the year.

So fully engaged in this opportunity to execute with the cash, and we are ready to do so.

Great. Thanks for that. That's great color. That's it for me. The next question is from Alexei Gogolaz of JPMorgan. Please go ahead.

Hello, everyone.

Ronny Chi, I was wondering if you can elaborate on the comment you made [indiscernible] [indiscernible] top 10 now represents 21 My first [indiscernible] '23 And Same with [indiscernible] which used to be just over 3% of So can you maybe talk about what was the dynamic [indiscernible] Hi, Alexei. This is Roni. Obviously, concentration, and there isn't anyone the dependent on customer. As I mentioned, the biggest customer is only 4%. Yes, slightly higher than last year, or 3%, but this is not material in terms of the total volume of Sapiens. Going forward, we are looking to keep this momentum of the same level 21%, 20% of the top 10 and less than 5% from those overall. We do not see any risk from this customer, and obviously, not risk for Sapiens overall revenue. Okay.

And then a follow-up on Dylan's question about [indiscernible] [indiscernible] You've added customers to Sapiens in 2020 It It sounds like you're looking to add another 200 over the next five years, Can you talk about that you are hoping accelerate And what sort of carrots and [indiscernible] Yes. Obviously, the growth from 20% to 60% looks a lot. But if you dive in into the figures, we basically came from two verticals. The first one that is ongoing all the time, as Henry and Alex mentioned, all new deals that we are signing are on the cloud subscription. So this is by itself going to contribute significant amount of percentage to the 60% total volume. The second vertical is that we have almost four fifty customers, slightly less customer that we sold several years ago to the subscriptioncloud over the years. Last year, we did 10 We are looking to increase these factors even to fifteen, twenty and 30 going forward as the adoption for subscriptioncloud is growing bigger and bigger as we speak. So coming from two verticals, new customer and shifting existing one [indiscernible] And Roni, just to clarify a comment you 36 total [indiscernible] could you maybe talk about the contribution to ARR the average size of [indiscernible] year over year No, the contribution, the not decrease.

But in the early years, the contribution to the ARR is slightly smaller than as we The contribution from the ARR is increasing as we signing them. I think we had a higher number of deals that we signed from Crossel and sometimes cross sell is already in the cloud. But every deal that we are signing new logo, I contributed there Again, in the early years, less than as we continue going forward.

And are those deals [indiscernible] C or in life or Across the board.

Okay. Perfect. Thank you, Roni.

There are no further questions at this time. Before I ask Mr. Ms. To go ahead with her 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, 8060 In Israel, please call 25038. And internationally, 925-5938. Please go ahead.

Thank you for joining our call today. We look forward to this discussing our first quarter results on the next earnings call. We welcome you to contact us if you have any further questions. Thank you. Thank you. This concludes the Sapiens International Corporation.

Fourth Quarter twenty twenty four Results Conference Call. Thank you for your participation. You may go ahead and disconnect. [indiscernible]