Sapiens Reports Third Quarter 2025 Financial Results

Rochelle Park, NJ, November 13, 2025 – Sapiens International Corporation, (NASDAQ and TASE: SPNS), a leading global provider of software solutions for the insurance industry, today announced its financial results for the third quarter ended September 30, 2025. 

 Summary Results for Third Quarter 2025 (USD in millions, except per share data) 

	GAAP			Non-GAAP
	Q3 2025	Q3 2024	% Change	Q3 2025	Q3 2024	% Change
Revenue	$152.3	$137.0	11.2%	$152,3	$137.0	11.2%
Gross Profit	$67.3	$60.3	11.6%	$70.7	$62.8	12.5%
Gross Margin	44.2%	44.0%	20 bps	46.4%	45.8%	60 bps
Operating Income	$17.8	$21.7	-18.3%	$25.5	$25.1	1.5%
Operating Margin	11.7%	15.9%	-420 bps	16.7%	18.3%	-160 bps
Net Income (*)	$14.3	$18.3	-22.0%	$20.5	$21.1	-2.7%
Diluted EPS	$0.25	$0.33	-24.2%	$0.36	$0.37	-2.7%

 

(*) Attributable to Sapiens’ shareholders
 

Roni Al-Dor, President and CEO of Sapiens, stated, “In the third quarter of 2025, we continued to execute on our strategic priorities, securing new deals and strengthening customer relationships globally. Revenue increased by 11.2% year-over-year, reaching $152 million for the quarter. All our top geographic markets grew in the quarter, led by double digit expansion in North America and Rest of the World, reflecting broad-based demand and the successful execution of our strategic initiatives. Our annualized recurring revenue (ARR) totaled $220 million, reflecting a 26.7% year-over-year increase, of which 17.5% is organic and 9.2% contributed from the recent acquisitions. Sapiens’s non-GAAP operating profit totaled $25 million in the quarter, reflecting a 16.7% operating margin. 

Our insurance platform empowers insurers to accelerate digital transformation, achieve sustainable growth, and operational efficiency, fueled by the continued adoption of AI-driven innovation. We remain committed to advancing our platform, accelerating cloud adoption, and expanding our global footprint, all of which will serve as catalysts for continued success. Our continued success in both new customer acquisition and account expansion across North America and EMEA underscores the strategic value of our platform for insurers accelerating digital transformation.” 

Following Sapiens’ announcement on August 12, 2025, that the company has entered into a definitive agreement to be acquired by Advent, a leading global private equity investor, for $43.50 per common share in cash, valuing Sapiens at approximately $2.5 billion, Sapiens will forgo a Q3 2025 Earnings Call.

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: Valuation adjustment on acquired deferred revenue, amortization of capitalized software development and other intangible assets, capitalization of software development, stock-based compensation, compensation related to acquisition and acquisition-related costs, restructuring and cost reduction 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 eliminate valuation adjustment on acquired deferred revenue, stock-based compensation expense, depreciation and amortization, capitalization of software development costs, compensation expenses related to acquisition and acquisition-related costs, restructuring and cost reduction 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 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. We 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 SaaS 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.  

 

Investor and Media Contact  Yaffa Cohen-Ifrah  Chief Marketing Officer and Head of Investor Relations, Sapiens  Yaffa.cohen-ifrah@sapiens.com   +1 917-533-4782

Investor Contacts  Brett Maas Managing Partner, Hayden IR +1 646-536-7331 Brett.Maas@HaydenIR.com  Kimberly Rogers Managing Director, Hayden IR +1 541-904-5075 kim@HaydenIR.com

 

Forward Looking Statements 

Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to:  the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; the global macroeconomic environment, including headwinds caused by inflation, relatively high interest rates, potentially unfavorable currency exchange rate movements, and uncertain economic conditions, and their impact on our revenues, profitability and cash flows; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems; risks related to the insurance industry in which our clients operate; risks associated with our global sales and operations, such as changes in regulatory requirements, wide-spread viruses and epidemics like the coronavirus epidemic,  and fluctuations in currency exchange rates; and risks related to our principal location in Israel and our status as a Cayman Islands company. 

While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2024, to be filed in the near future, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, to conform these statements to actual results or to changes in our expectations. 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES  

CONDENSED CONSOLIDATED STATEMENT OF INCOME  

U.S. dollars in thousands (except per share amounts) 

 

			Three months ended				Nine months ended
			September 30,				September 30,
			2025		2024		2025		2024
			(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenue			152,319		137,025		430,026		408,074
Cost of revenue			85,010		76,729		240,166		230,114
Gross profit			67,309		60,296		189,860		177,960
Operating expenses:
	Research and development, net		21,182		16,449		56,291		49,779
	Selling, marketing, general and administrative		28,367		22,101		77,816		64,030
Total operating expenses			49,549		38,550		134,107		113,809
Operating income			17,760		21,746		55,753		64,151
Financial and other (income) expenses, net			(239)		(913)		(2,839)		(3,114)
Taxes on income			3,621		4,324		11,794		12,812
Net income			14,378		18,335		46,798		54,453
Attributable to non-controlling interest			78		–		330		141
Net income attributable to Sapiens’ shareholders			14,300		18,335		46,468		54,312
Basic earnings per share			0.26		0.33		0.83		0.97
Diluted earnings per share			0.25		0.33		0.83		0.97
Weighted average number of shares outstanding used to compute basic earnings per share (in thousands)			55,927		55,854		55,954		55,799
Weighted average number of shares outstanding used to compute diluted earnings per share (in thousands)			56,432		56,308		56,222		56,151

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND SUBSIDIARIES  

RECONCILIATION OF GAAP TO NON-GAAP RESULTS 

U.S. dollars in thousands (except per share amounts) 

 

		Three months ended				Nine months ended
		September 30,				September 30,
		2025		2024		2025		2024
		(unaudited)		(unaudited)		(unaudited)		(unaudited)
GAAP revenue		152,319		137,025		430,026			408,074
Non-GAAP revenue		152,319		137,025		430,026			408,074
GAAP gross profit		67,309		60,296		189,860			177,960
Amortization of capitalized software		1,729		1,470		4,914			4,584
Amortization of other intangible assets		1,650		1,043		3,747			3,630
Non-GAAP gross profit		70,688		62,809		198,521			186,174
GAAP operating income		17,760		21,746		55,753			64,151
Gross profit adjustments		3,379		2,513		8,661			8,214
Capitalization of software development		(1,715)		(1,834)		(5,445)			(5,374)
Amortization of other intangible assets		2,412		1,276		6,066			3,732
Stock-based compensation		861		646		2,553			2,229
Costs related to Sapiens acquisition by Advent		2,324		–		2,324			–
Acquisition-related costs *)		453		754		3,196			1,248
Non-GAAP operating income		25,474		25,101		73,108			74,200
GAAP net income attributable to Sapiens’ shareholders		14,299		18,335		46,468			54,312
Operating income adjustments		7,714		3,355		17,355			10,049
Taxes on income		(1,494)		(599)		(3,319)			(1,808)
Non-GAAP net income attributable to Sapiens’ shareholders		20,520		21,091		60,504			62,553

  

 (*) Acquisition-related costs pertain to charges on behalf of M&A agreements related to future performance targets and retention criteria, as well as completed or prospective third-party services, such as tax, accounting and legal rendered. 

 

 Adjusted EBITDA Calculation
U.S. dollars in thousands 

 

		Three months ended				Nine months ended
		September 30,				September 30,
		2025		2024		2025		2024
GAAP operating profit		17,760		21,746		55,753		64,151
Non-GAAP adjustments:
Valuation adjustment on acquired deferred revenue		–		–		–		–
Amortization of capitalized software		1,728		1,470		4,914		4,584
Amortization of other intangible assets		4,063		2,319		9,813		7,362
Capitalization of software development		(1,715)		(1,834)		(5,445)		(5,374)
Stock-based compensation		861		646		2,553		2,229
Costs related to Sapiens acquisition by Advent		2,324		–		2,324		–
Compensation related to acquisition and acquisition-related costs		453		754		3,196		1,248
Non-GAAP operating profit		25,474		25,101		73,108		74,200
Depreciation		1,059		1,288		3,088		3,480
Adjusted EBITDA		26,533		26,389		76,196		77,680

 

 Summary of NON-GAAP Financial Information
U.S. dollars in thousands (except per share amounts) 

 

	Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024
Revenues	152,319		141,602		136,105		134,305		137,025
Gross profit	70,688		64,838		62,995		62,692		62,809
Operating income	25,474		23,077		24,557		24,468		25,101
Adjusted EBITDA	26,533		24,141		25,529		25,359		26,389
Net income to Sapiens’ shareholders	20,520		19,305		20,679		20,710		21,091
Diluted earnings per share	0.36		0.34		0.37		0.37		0.37

 

Annual Recurring Revenue (“ARR”) 

U.S. dollars in thousands  

 

		Three months ended
		September 30,
		2025				2024
Annual Recurring Revenue			219,715				173,414

 

Non-GAAP Revenues by Geographic Breakdown
U.S. dollars in thousands 

	Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024
North America	64,291		59,782		56,871		56,753		55,755
Europe	71,817		70,095		67,480		65,624		69,281
Rest of the World	16,211		11,725		11,754		11,928		11,989
Total	152,319		141,602		136,105		134,305		137,025

  

Non-GAAP Revenue breakdown 

U.S. dollars in thousands 

	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Software products and re-occurring post-production services (*)	119,799		100,707		337,715		292,992
Pre-production implementation services (**)	32,520		36,318		92,311		115,082
Total Revenues	152,319		137,025		430,026		408,074

 

 

	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Software products and re-occurring post-production services (*)	64,303		53,809		182,234		156,386
Pre-production implementation services (**)	6,385		9,000		16,287		29,788
Total Gross profit	70,688		62,809		198,521		186,174

 

 

	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Software products and re-occurring post-production services (*)	53.7%		53.4%		54.0%		53.4%
Pre-production implementation services (**)	19.6%		24.8%		17.6%		25.9%
Gross Margin	46.4%		45.8%		46.2%		45.6%

 

(*) Software products and re-occurring post-production services include mainly subscription, term license, maintenance, application maintenance, cloud solutions and post-production services. This revenue stream is a mix of recurring and re-occurring in nature.  

(**) Pre-production implementation services include mainly implementation services before go-live, which are one-time in nature.  

Adjusted Free Cash-Flow
U.S. dollars in thousands 

	Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024
Cash-flow from operating activities	10,643		1,873		25,353		42,109		13,083
Increase in capitalized software development costs	(1,715)		(1,788)		(1,942)		(1,759)		(1,834)
Capital expenditures	(431)		(1,003)		(366)		(419)		(1,125)
Free cash-flow	8,497		(918)		23,045		39,931		10,124
Cash payment related to Sapiens acquisition by Advent	165		–		–		–		–
Cash payments attributed to acquisition-related costs(*) (**)	803		626		–		1,238		124
Adjusted free cash-flow	9,468		(292)		23,045		41,169		10,248

  

(*) Included in cash-flow from operating activities 

(**) Acquisition-related payments pertain to charges on behalf of M&A agreements related to future performance targets and retention criteria, as well as completed or prospective third-party services, such as tax, accounting and legal rendered. 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES 

CONDENSED CONSOLIDATED BALANCE SHEET 

U.S. dollars in thousands 

 

			September 30,		December 31,
			2025		2024
			(unaudited)		(unaudited)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents		82,200		163,690
	Short-term bank deposit		–		52,500
	Trade receivables, net and unbilled receivables		138,189		99,603
	Other receivables and prepaid expenses		31,363		19,350
					335,143
	Total current assets		251,752		335,143
LONG-TERM ASSETS
	Property and equipment, net		10,268		10,656
	Severance pay fund		2,621		3,208
	Goodwill and intangible assets, net		430,900		302,472
	Operating lease right-of-use assets		21,201		20,746
	Other long-term assets		26,948		19,486
	Total long-term assets		491,938		356,568
TOTAL ASSETS			743,690		691,711
LIABILITIES AND EQUITY
CURRENT LIABILITIES
	Trade payables		13,218		8,414
	Current maturities of Series B Debentures		19,808		19,796
	Accrued expenses and other liabilities		91,650		77,390
	Current maturities of operating lease liabilities		6,351		6,440
	Deferred revenue		34,989		37,543
					149,583
	Total current liabilities		166,016		149,583
LONG-TERM LIABILITIES
	Series B Debentures, net of current maturities		–		19,792
	Deferred tax liabilities		12,310		6,899
	Other long-term liabilities		11,511		10,331
	Long-term operating lease liabilities		17,376		17,719
	Accrued severance pay		9,285		7,758
			Z		62,499
	Total long-term liabilities		50,482		62,499
REDEEMABLE NON-CONTROLLING INTEREST			13,724		–
EQUITY			513,468		479,629
TOTAL LIABILITIES AND EQUITY			743,690		691,711

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES 

CONSOLIDATED STATEMENT OF CASH FLOW
U.S. dollars in thousands 

	For the nine months ended September 30,
	2025		2024
	(unaudited)		(unaudited)
Cash flows from operating activities:
Net income	46,797		54,453
Reconciliation of net income to net cash provided by operating activities:
Depreciation	3,088		3,480
Amortization of capitalized software and other intangible assets	14,727		11,946
Accretion of discount on Series B Debentures	17		32
Capital loss from sale of property and equipment	1		13
Stock-based compensation related to options issued to employees	2,553		2,229
Net changes in operating assets and liabilities, net of amount acquired:
Increase in trade receivables, net and unbilled receivables	(21,034)		(20,640)
Decrease in deferred tax liabilities, net	(3,325)		(2,280)
Increase in other operating assets	(138)		(908)
Increase in trade payables	3,129		1,989
Decrease in other operating liabilities	(1,880)		(5,154)
Decrease in deferred revenues	(7,279)		(5,684)
Increase in accrued severance pay, net	1,213		640
Net cash provided by operating activities	37,869		40,116
Cash flows from investing activities:
Purchase of property and equipment	(1,864)		(2,306)
Proceeds from deposits	52,366		36,360
Proceeds from sale of property and equipment	64		49
Payments for business acquisitions, net of cash acquired	(106,683)		(375)
Capitalized software development costs	(5,445)		(5,374)
Net cash provided by (used in) investing activities	(61,562)		28,354
Cash flows from financing activities:
Proceeds from employee stock options exercised	–		98
Distribution of dividend	(37,037)		(29,789)
Repayment of Series B Debenture	(19,796)		(19,796)
Acquisition of non-controlling interest	–		(4,131)
Acquisition deferred payment	(455)		–
Net cash used in financing activities	(57,288)		(53,618)
Effect of exchange rate changes on cash and cash equivalents	(509)		4,584
Increase (decrease) in cash and cash equivalents	)81,490(		19,436
Cash and cash equivalents at the beginning of period	163,690		126,716
Cash and cash equivalents at the end of period	82,200		146,152

 Debentures Covenants 

As of September 30, 2025, Sapiens was in compliance with all of its financial covenants under the indenture for the Series B Debentures, based on having achieved the following in its consolidated financial results:  

Covenant 1  

• Target shareholders’ equity (excluding non-controlling interest): above $120 million. 

• Actual shareholders’ equity (excluding non-controlling interest) equal to $513.5 million. 

Covenant 2 

• Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for the Company’s Series B Debentures) below 65%. 

• Actual ratio of net financial indebtedness to net capitalization equal to (13.79)%.  

Covenant 3 

• Target ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is below 5.5. 

• Actual ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is equal to (0.61).