Kevin Kumar: Thanks for taking my question. I wanted to touch on cloud migrations a bit more. Just can you talk about the activity during the quarter? Was that in line with your expectations? And was there any material kind of negative impact to revenue recognition at all in the quarter? I know you’re targeting about one point of impact for the year, but just curious kind of how the quarter played out?
Roni Giladi: Hi, Kevin. This is Roni. So, obviously, with new customers we mentioned, all what we offer is on subscription, a SaaS solution. And we are starting this already in North America a year ago. So, there is no in Europe, we are partially and right now full on that. So, we do not see any major impact to transition. Now, the migration for existing customer, this is journey that will take several years. We are also doing this in a way that we do not want to have significantly the revenue as we mentioned. We anticipate only 1% and it’s growing at a reasonable pace. We are continuing doing this. We transition some of the customer, but it will take a journey of several years of our existing customers.
Kevin Kumar: And then, I wanted to ask about the partnership with Microsoft that was called out few times. I guess, can you just talk a bit more about the generate capabilities that are being offered to carriers there and kind of how they’re leveraging those capabilities and maybe how that differentiates Sapiens in the marketplace?
Alex Zukerman: So, few things about our Gen AI initiatives. First of all, we have a strategic partnership with Microsoft and so we really join forces together to provide the next level of solutions to the industry and we work very closely with their Gen AI experts and labs and get a great support from them. This really helps us to generate the right use cases. In terms of the actuals there, so our data platform includes several aspects of AI from a more machine learning predictive analytics model. We currently, for example, deploy some of them, with some of our customers, one customer in South Africa, one customer in Europe, where we deploy those machine learning use cases as a baseline. On top of that, we are developing a set of generative AI capabilities to support two areas of the business.
One is across the external value chain, meaning providing a Copilot and Gen AI capabilities for the different roles and players in the insurance value chain, claim handlers, underwriters, customer service, et cetera. To provide them actually, let’s say, ability to perform their role on steroids, bringing operational efficiency, better accuracy and speed to their performance. The other part where we invest is on the let’s call it more the back office or the inbound of the platform ability to run automatic configuration from document to configure. We released first release of our decision model with the ability to automatically create configuration just by getting a scope document in Word or PDF for the customer and then automatically configure that.
Now we are doing second stage. The vision is also to continue with this approach to our core systems. Today also we develop capabilities to run data migration using AI to map the different fields from source to, from source platform to target platform and about how to create documents and letters within the platform, this is all today run on Gen AI. So, we have already deployed some cases and moving forward with the roadmap to deploy additionals. The reaction of our customers is very strong. This is super interesting for them. The market is definitely looking for those capabilities and we feel it is becoming a differentiator on our side.
Operator: The next question is from Chris Reimer of Barclays. Please go ahead.
Chris Reimer: Actually, all the topics were mentioned already, but I was wondering if you could just comment on how you see the company positioned in terms of competition, especially in light of the move to the SaaS model? And then just on those legacy customers, what are some of the challenges they’re facing, if any? Or is it just a matter of time before they do transition?
Alex Zukerman: So, when we look at our competition, Sapiens is a unique company in the fact that we play in both P&C Life, North America, Europe and APAC. So, when we talk about competition, it’s quite fragmented. So, let me split the answer to several aspects. In North America market, the SaaS itself is not a differentiator to our favor. All the leading players and our leading competitors are SaaS. We are on peer with them and we match the standards of the market as all are expected to run a SaaS capability. So, on the P&C side, we feel we are on the same level as our competitors in terms of the cloud maturity. In some cases, we see a strong advantage to our P&C platform in terms of the upgradability. This is one of the largest challenges for SaaS companies in our business to go to a seamless and rapid upgrade process, this is where we excel.
So, this is a small differentiator to my favor. When we look so this is on the P&C side. When we look at the workers’ compensation side, we are, our analysis shows that we are in a very leading position. Our win rate is very strong. The combination of the technical capabilities of the platform and functionality definitely puts us in a strong leading position in the market compared to all our competitors. Similarly, when we look in the Life side, of course, we have competition in the market, but I think that we are positioned very well compared to them both from the technical perspective, the maturity of our cloud proposition on life, the usage of automation tools of Gen AI within the platform. And on top of that, the fact that we bring to the market the combination of a core suite together with the life components of illustration, underwriting and IAP, which as a standalone, they are very powerful products combined with our core, we feel there is an unprecedented proposition to the market, a strong differentiator and we start to see that reflecting in the pipeline.
So, that’s the North America market. I think when we look at the European and APAC market, we see the same story on the life side. So very similar to what we see in North America. The combination of strong technical architecture, cloud maturity and functional rich nets really put us in a driving position with the life in Europe and in APAC. P&C, we are considered by all analysts and by the market as it’s a two-horse race on the big guys. It’s us and Guidewire leading the market on the P&C side. And when we look in APAC, and I think we also talked about before, we see large opportunity for us in APAC. Definitely see ourselves as the leading position in Southeast Asia, both on Life and P&C and we intend to leverage this strong position.
