This is definitely allows us to demonstrate a very, very mature and comprehensive solution. I think what we see in P&C solutions is also our ability to serve the customers to show the value, to help them grow their business in a record time. That’s definitely another driver. This is their product. When we look at our platform proposition and the digital and data capabilities that we bring together with the core, by ability to provide a turnkey solution, a full end-to-end solution, this is definitely one of the strengths point, having it fully integrated in a platform level, being able to deploy them all together, and we see here the effect in the market.
Dylan Becker: Great. Very helpful. Thanks, Alex. Thanks, Roni. Thanks.
Alex Zukerman: Thanks.
Operator: The next question is from Kevin Kumar of Goldman Sachs. Please go ahead.
Kevin Kumar: Hi, thanks for taking my question. I wanted to ask about the data and digital profit modules. I know that’s been a big focus area for you all, and just curious how that’s attaching to new deals, maybe how that’s trending versus prior quarters? And in general, can you just talk a little bit about cross-selling some of these modules back into the customer base and the success you’re having there? Thanks.
Alex Zukerman: Yes, so this is Alex here. Again the way we look at both digital and data solutions that we have a central entity in Sapiens that develops those solutions and spreads it across our different segments of the business and the different core solutions. So what we see is the effect of that in our strategy, we put a huge emphasis on the fact that we provide our core data and digital solutions fully pre-integrated, loosely coupled, so customers can pick and choose, but definitely fully integrated out of the box, which brings a huge operational efficiency both in the project and deployment and in the business as usual. Now, the impact on our business has several factors. One, our typical deal size is increasing. The wallet share of a typical deal is increasing, because we are not selling only core as we used to do in the years before, but we typically sell another with the core, a digital or a data or both solutions, and also deployed in the cloud.
Not less important, of course, this aspect as well. So, I think first impact is wallet share. Second impact is the attractiveness of our solutions is rising, and it seems more and more attractive because we can provide customers the full end-to-end solutions covering the various aspects of this business in a single installation. And this brings also a lot of value to the customer’s inability to work with one vendor to deploy something that is pre integrated and hence cost effective. This also allows us to increase our cross-sell now this is something that we are now starting to do more aggressively than before. This is also comes with a high level of maturity of our digital and data solutions that now we feel very, very comfortable going forward.
And as Roni mentioned, increasing our sales and account executive teams to be able to go back to our customer base. Most of them are on a core business application usage and cross sell with our data and digital solutions. And we start to see this trend both in Europe and in the U.S.
Kevin Kumar: Great, appreciate that and helpful. And I wanted to maybe ask also if you can give an update on your offshore ratio, kind of where we are in terms of that transition and maybe how much that is helping drive margin expansion this year and anything else you’d comment on kind of the success you’re seeing in kind of improving profitability this year. Thank you.
Roni Giladi: Hi Kevin, this is Roni G. So offshore ratio, we are about 51% overall. We are growing this quarter-over-quarter. This quarter we also grow a minimal percentage, but continue to grow. There is obviously impact on the gross margin and operational profits. So this is important factor in our business this quarter. The improvement is not coming from the offshore ratio. It’s mainly coming from shekels versus dollar impact that have some benefit to us. But we offset this by additional investment in SG&A and in R&D. And we believe we can increase the offshore ratio in the next several years and create additional few percentage improvements in operation profit in the next few years.
