Welcome to Sapiens International Corporation's 2022 Q1 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded May 3, 2022. It is now my pleasure to introduce your host, Tally Kaplan Porat, Director of Corporate Marketing. Thank you, Tally. You may now begin. Thank you, and good day, everyone. Sapiens' Q1 2022 earnings release was issued before the market opened this morning and has been posted on the company's website at www.sapiens.com. Representing Sapiens on the call today are Roni Al-Dor, President and CEO, and Roni Giladi, Chief Financial Officer. Before we start, I'd like to remind everyone that this conference call may contain projections or other forward-looking statements. The safe harbour provisions in the press release issued today also apply to the content of the call. Sapiens 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, we'll refer to the non-GAAP financial measures. A reconciliation schedule shows GAAP versus non-GAAP results has been provided in our press release issued before the market opened this morning. A 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 Al-Dor, President and Chief Executive Officer of Sapiens. Roni? Thank you, Tally. I would like to welcome everyone to our call today to review Sapiens' Q1 2022 financial results. Sapiens has delivered a good start to 2022. In Q1, revenue increased by 7% year-over-year to $180 million, in line with the guidance we gave on our last earnings call. Operating profit increased to $20.8 million for an operating margin of 17.6%. We maintained profitability on par with full year 2021 despite increased employee costs. The global Sapiens team has successfully delivered on multiple fronts in Q1, with notable wins in all geographies, efficient delivery, and continued investment in the innovation, capabilities, and expansion of our offering. Our global customer-centric model continues to achieve consistent growth and profitability in generating cash. Sapiens' success is built upon 3 key elements. The first key element is our commitment to innovation and product excellence, reflecting our meaningful R&D strategy. This drives the continuous improvement and enhancement of our offering, which is being recognized by the analyst community and by our customers. Second is our land and expand strategy, which we successfully execute to allow us to grow with new and existing clients and penetrate new markets. The third element is our role as a trusted partner, where we support our customers on long-term engagement model in their digital transformation and the ongoing continuous evolution of their business. These key elements are tightly coupled and provide us with several levels of growth, evolving with our customers' needs and advancing things to our innate drive for excellence and success. Europe continues to deliver growth for Sapiens. On the heels of our outstanding performance in 2021, Europe continued and is as expected to continue to be an exciting region for us in 2022. We have successfully expanded our European presence by combining organic growth with our past acquisitions, which are now fully integrated. Using influential customer references and local presence that we gained organically and throughout our acquisitions to build a robust pipeline for our P&C and Life & Pensions in European markets, which includes several key regions. We see excellent progress and maturity of this pipeline, particularly in the Spanish-speaking Iberia region, the German-speaking DACH region, the Nordic region, as well as U.K. and Ireland and few other countries in Central Europe. Such progress demonstrates today the fruits of our investment over the last few years. In this region, we have accelerated our business ramp up with the local customer base and strong local team. Today, we are well-positioned as a market leader, and this will allow us to continue and harvest market share in these regions. 1 great example is our progress in the German market in P&C. We have established a strong presence and successful leverage the cultural knowledge, reference sets, and regulatory expertise required for the rapid growth of our business in the German market. As a result, we see increased pipeline in the region at several stages. We recently announced 2 new P&C wins in Europe that I would like to highlight. 1 is Baloise, a leading multinational provider of P&C Insurance and reinsurance services, is headquartered in Luxembourg. They chose Sapiens to transform their legacy system in multiple countries with our end-to-end core solution. We were selected as their partner, not only for our leading core solution, industry knowledge and expertise, but also because we can accompany them on the entire journey across multiple markets. Baloise operates in Germany, Belgium, Luxembourg, Norway and U.K., and Sapiens global footprint and industry expertise in this region makes us valuable partner and able to support these type of multinational digital transformation journeys. Another key win in Europe is a leading multinational insurance company in Portugal, both in the life and non-life that selected Sapiens to implement our reinsurance solution. This solution will enable the insurer to better manage its global diversified insurance product sales network of reinsurance business for life and non-life sectors. A significant competitive advantage in Europe is our ability to offer global carriers a single solution that can be implemented across multiple regions. These complex multi-region deals with T1 insurers will be valuable reference as we expand our leadership position in Europe. In the U.K., we invest in our product and partners ecosystem to expand our offering and address the specific needs of Lloyd's and London market business. We partner with Albany Group to integrate its code-free Connect with Sapiens core system and provide end-to-end performance, regulatory and operational control of supply chains. We also partner with WCL, a solution provider that delivers B2B gateway to manage connectivity and data exchange for Lloyd's of London Bureau services. Together with Sapiens core digital insurance platform, WCL Bureau messaging integration will open the distribution to Lloyd's syndicates for Sapiens global 600 insurance customer base that can leverage for expansion in the dynamic U.K. market. On the life and annuity front, industry analysts Celent awarded Sapiens CoreSuite for Life the 2021 XCelent Award in EMEA in the breadth of functionality category, and recognize it as a luminary solution excelling in both advanced technology and breadth of functionality. This recognition by Celent illustrates Sapiens depth of impact, breadth of knowledge and keen understanding of the life and pension insurance industry. This marks the second time Sapiens CoreSuite for Life and Pensions in EMEA was recognized by Celent after winning the 2019 Celent XCelent Award. This award also recognized Sapiens' strong team of deep domain experts. We are proud that this award validates our product strategy is on trend, it cited that due to our continued investment in our platform. With a sharper focus on user experience improvement, the current Sapiens user interface is still ahead of many of its peers. Celent recognized that Sapiens CoreSuite for Life continues to be primary system within the EMEA marketplace for the insurers. In North America, we see positive and tangible improvements. A highlight in North America is a new business closing in life and annuities, thanks to the investment in our core solution and business application components. 1 of those deals is Guardian who chosen Sapiens cloud-native customer acquisition solution, integrating Sapiens illustration and application product for enhancing their digital operation. This is a cross-sell following the successful implementation of accelerated underwriting solution by Sapiens. In Q4 of 2021, we were selected to perform a blueprint process with North America carriers for CoreSuite for Life, which has been successfully completed. We are now in the last stage of discussion with this customer, adding our DigitalSuite to the solution mix. We expect to initiate the project implementation soon. Overall, we see improvement in the pipeline for life and annuity with progress in the funnel moving to contract negotiation, and the opportunities started in the previous quarter are advancing. We are confident that our life and annuity business in North America will grow in 2022 and build a solid pipeline towards 2023. Our North America pipeline for P&C is progressing, with several deals moving to advanced stage in the sales process. In addition, our existing customer are adding additional products, and notably delivery has improved with existing projects. We continue to accelerate investment in products and delivery methods, and we plan to grow our P&C core businesses by year-end. Reinsurance continued to grow steadily, building a solid pipeline for 2022 in North America. After years of using Sapiens financial and compliance solution, Applied Underwriters selects Sapiens to also automate reinsurance administration, accounting, analysis, and reporting. The solution allows them to replace their legacy process and automate complex accounting tasks to eliminate manual process. We are confident with our product for North America and have additional opportunity in late stage in the pipeline. APAC and South Africa region were strong again in Q1. Our increased traction and market recognition sustained our momentum in this region in the Q1. In South Africa, Sapiens expand our business with The Hollard Insurance Company with our cloud-native low-code DigitalSuite. The Hollard Insurance Company is already a long-term customer for Sapiens, previously deploying our solution for both the life and reinsurance businesses. In addition, another customer and 1 of South Africa’s largest financial institutions selected to expand relations with us following a successful experience with Sapiens transforming their P&C core system to implement Sapiens’ Life and Annuity solution. These are 2 examples of upselling to our customer base who both chose Sapiens once again for their next phase of the digital transformation. Both APAC and South Africa offer growth potential with high demand for our offerings. Sapiens’ product offering is progressing with cloud and digital across the board. Sapiens has prioritized innovation, and our R&D investment has brought us real gains and competitive advantage. Areas where we have focused our R&D budget, like our cloud and digital and low-code, no-code offerings, along with Decision Platform, our key growth levers that continue to deliver wins. All of the new deals I mentioned this quarter, except one, were delivered on the cloud. 1 major R&D priority is to continuously enhance the cloud-native capabilities of our product portfolio. We also collaborate with both Microsoft Azure and Amazon Web Services to ensure using innovative and cutting-edge cloud capabilities. Many opportunity, such as Guardian and The Hollard Insurance Company mentioned above, combine a digital component and a core module for Sapiens to allow our customer to progress in digital journey. Our product strategy is based on providing a digital insurance platform offering, a holistic, pre-integrated, connect-rich insurance platform covering core processing, digital experience, and data analytics and decision management that can be deployed in a full or modular manner, all in or all on the cloud. 1 example is embedding decision with our core insurance to enhance the value proposition for P&C insurers. We are also looking to further continue to development of machine learning and predictive analytics use cases. Lastly, we continuously expand our ecosystem to InsurTech partners that's increasing the scope of solution we can bring to our customers. Partnering with these innovative InsurTech partners brings value to our clients and help us to improve our value proposition to our clients and even enter to new market, as I shared earlier. Our marketing activities in Q1. It has been such a pleasure to engage with colleagues, industry experts, and customer in-person events, and host face-to-face meeting with our clients. In the Q1 alone, we attend 6 events in North America and in Europe. We are excited to host an intimate and engaging event with selected executive from North America customer base in the upcoming Executive Council being held in Nashville, Tennessee next week. Meeting in person and attending live events is critical to creating deep engagement with prospect and customer, and key to build a robust pipeline of prospects. While there may be related increase in travel expenses, this can be offset by boost we can get to our business from the large number of meetings we efficiently host with many customers at 1 industry trade show and marketing events. The marketing team has a full schedule for the remainder of the year, and we look forward to increased exposure it will bring to Sapiens. Looking ahead to remainder of 2022. To summarize, our Q1 performance show how the core elements of our strategy are delivering growth. Due to our ongoing commitment and advanced innovation, our product offering continue to be recognized for its excellence in functionality and performance. Europe remains a dynamic market for Sapiens across our life and annuity and P&C businesses, wherever we have a significant runway to take market share. In North America, following our focused investment, we see solid progress in our life and reinsurance businesses growth and are encouraged by the future growth in P&C. APAC and South Africa were another bright spot in the Q1, and this region shows promise. Sapiens has established a track record of growth, profitability, and high cash generation. Through our strategic M&A and organic growth, we have a high standing in the global insurance market. The Sapiens team worldwide is committed to executing our strategy to deliver growth and improve our shareholder value. Now I would like to turn the call to Roni Giladi, our CFO. Roni. Thank you, Roni. I will begin my commentary with a review of the Q1, 2022 non-GAAP results. All comparisons are year-over-year versus Q1 2021, unless otherwise stated. I will follow up with comments on the balance sheet and cash flow, and we'll wrap up with our guidance for 2022. Revenue in the Q1 of 2022 increased to $117.7 million, up 6.8% from the Q1 of 2021. Currency headwind versus Q1 2021 was 2.7%. Our organic growth rate without currency headwind was 9.5%. Our revenue in North America was $49 million compared to $44.8 million a year ago. On a sequential basis, North America revenue was up modestly from $48.9 million in Q4 of 2021. Revenue in Europe reached $59.3 million, up 2.8% compared to a year ago quarter. Europe region was significantly affected by currency headwind, as euro, pound, Danish krone, and SEK were weakened against dollar. On a constant currency basis, our growth would be 8%. Revenue from the rest of world, which represents APAC and South Africa, grew 20.6% to $9.4 million in Q1 of 2022, compared to $7.8 million in the year ago quarter, mainly due to new logo wins. On the global view, the Russia-Ukraine war did not affect our revenue as we did not have customer or employee in that region. Although the situation can be escalated and affecting global economy and obviously Sapiens. Gross profit in Q1 2022 was $52.9 million, up from $49.2 million in Q1 of last year, an increase of 7.5%. Our gross margin this quarter was 45%, higher than 44.7% in the comparable quarter. This result is despite currency headwinds and increase of labor cost. Operating profit this quarter increased to $20.8 million, up 9.3% from $19 million in Q1 of 2021. Operating margin was 17.6% this quarter, 40 basis points higher compared to 17.2% in the Q1 of 2021. Interest income in Q1 was $348 thousand due to income from hedging transaction, compared to interest expenses of $575 thousand in Q1 of 2021. Tax rate for the quarter was 17.9%. Net income attributable to Sapiens shareholders for the quarter was $17.3 million, up 16% from $14.9 million in Q1 of 2021. EPS for the quarter was $0.31 per diluted share, compared to $0.27 per diluted share in the Q1 of last year, reflecting EPS growth of 14.8%. EBITDA increased by 8.9% to $21.9 million in the Q1. Our adjusted EBITDA margin was 18.6%. Turning to our balance sheet. As of March 31, 2022, with cash and cash equivalents and short-term deposits totalling $206 million and total debt of $80 million, which will mature in 4 yearly equal installments until January 2026. During the Q1 of 2022, we generated adjusted free cash flow of $16.1 million compared to $10.6 million in Q1 of 2021. I would like to turn now to our guidance for 2022. We are reiterating our revenue guidance of $495 million-$500 million for 2022. On the profit side, we are increasing our non-GAAP operating profit from a range of 17%-17.3% to a higher range of 17.4%-17.6%. The increase in employee attrition rate and increase in labor cost and additional currency headwind are offset by higher offshore rates and efficiency measures. We are confident in our ability to grow while improving profits. We continue to convert our profitability to strong, solid free cash flow. According to our policy, we are declaring cash dividend of 40% of our annual non-GAAP net income, which represent $0.47 per share, totaling to approximately $26 million, compared to $0.36 per share or $20 million in 2021. Moving forward, we would like to change our policy to semi-annual dividend payout to reflect our confidence in the business of recurring positive cash flow generation. I would like now to turn back the call to Roni Al-Dor. Roni? Thank you, Roni. Sapiens is well established in a multi-billion market that provides macro tailwind as insurance move from legacy sources to digital and cloud solutions. We have established a global presence and look forward to our prospective opportunity that are in the late stage in the pipeline. We are taking an active role in shaping the evolving insurance software industry and our focused growth strategy and increased market demand position us for further success. Operator, we are ready to open the call for Q&A. Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. If you have a question, please press star 1. If you wish to cancel your request, please press star 2. If you are using speaker equipment, kindly raise the handset before pressing the numbers. Please ask your question in a loud and clear voice. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. The first question is from Surinder Singh of Jefferies. Please go ahead. Good morning, gentlemen. Congratulations on what looks like a fairly solid quarter. I'd actually like to start a question about the gross margins. Can you provide a little bit more color on the quality of the gross margin this quarter that it came in well above or better than I was anticipating, and then maybe the sustainability of them at this point? Hi, Surinder, this is Roni Giladi. Gross margin this quarter was 45%. Slightly higher than Q1 of 2021, and basically the same level as the previous quarter. We see improvements of almost 1% if we neutralize the currency headwind versus Q1 of 2021. The reason for the improvement are several. I will start with the offshore ratio. As we continue to grow the company, the offshore ratio is increasing and obviously helping us and supporting us to increase gross margin. The attrition rate that went up in recent quarter is not supporting us to deliver the revenue, but eventually if we recruit more in offshore locations, also increase the offshore ratio. This is 1 area. The second area, as we continue to sell our product in the same location as we are doing the same more and more, obviously profitability of each of the implementation is higher. This is second element. Obviously, third element is, internal measure that we are working on them, on an ongoing basis to improve the profit margin. Got it. Just a clarification on the offshoring component. Are you characterize that as an acceleration in the process at which point you're able to offshore the delivery of services? I would say that the last few quarters, the answer for that is yes. Obviously, we are focusing, this is ongoing basis, but the attrition rate that went up on a global basis also supported us to increase the offshore ratio. Got it. In terms of as I think about the commentary, it sounds like the business environment remains fairly strong. Can you provide any color there if we were to think about your views from, you know, a quarter ago to where they are now in terms of the conversations you're having with clients? Are you seeing any hesitation? It just seems that things, you know, are looking quite good at this point. Just any differences on the margin in terms of just those conversations from a quarter ago versus what you're having now? Okay. If the question is on the margin, I don't see any pressure on the margin in terms of customer- I apologize. I didn't mean operating margins. What I meant is just the difference between the conversations you're having a quarter ago with clients versus the conversations you're having now. How should we think about your clients, and what's impacting their decisions in the current macro environment from versus a quarter ago? Because obviously there's been a big change in the macro environment. Okay. I will split the answer into 2. I would say Europe and APAC together, we do not see, even the States, we do not see any macro environment change, as of today versus the previous quarter. Internally, in the States, we see change in the position of Sapiens. In Europe and in APAC, we continue to be strong, and we have some shift going up in the USA market. This is internally. On a global market, we do not see any change. Understood. Just 1 clarification question here, my last question. In terms of the reiteration of guidance, how much of that revenue is already locked in, meaning that it will come from existing projects? How much of that revenue will come from projects that have yet to start or projects that have yet to be won? We are starting the business model of Sapiens that around 10% of our revenue is coming from new logo, year-over-year, and about 90% of it is coming from existing customers, either customers that already went live, or customers that are in implementation phase. If you ask about obviously we are past Q1, so everything is locked. If you are going forward, the number is of course less than 10%. We already sold or signed several customers. We are engaging several customers that we are very close to sign. The number is less than 10% of total revenue in Sapiens. Thank you. That's it for me. The next question is from Mayank Tandon of Needham & Company. Please go ahead. Thank you, Roni and Roni, congrats on the quarter. I wanted to start with a question around just demand. Really my question there is in terms of clients, are they now more likely to buy the entire core from Sapiens? In other words, are they doing policy, billing and claims, or are they still buying maybe, you know, 1 solution from, say, a Sapiens, and then they might go to another vendor for some of the other products on the core side? I wanted to get your thoughts on just overall sort of momentum versus the competition that are playing in the same tiers of the market, whether it's Duck Creek and Guidewire, and Majesco and others. Thanks. Hey, this is Alex Zukerman, Head of Strategy. For your question, we see there's a bit of a difference between the European and APAC market and between the North America markets. When we look at the European market, it's much more tending towards full suite deals encompassing policy, billing, claims together. This is the majority of the deals we are signing in Europe are full suite. What I'd like to add on top of that in a big part of those deals, we don't sell only the core, but we sell at least another component from our product portfolio on top of the core. It can be an API layer, digital managed services, data and analytics. At least 1 of those components typically will join the mix. When we look at the North America market on P&C, I would say it's a split of roughly 50/50 in terms of the deals we are looking at. Some of them are full suite and some of them specific components, either policy or billing or claims. Many policy and claims. We see less pure billing deals. We compete on the 2 types of deals, and we see demand on the 2 sides. Got it. On competition, I sort of combined that question, but just in terms of your win rates versus some of the other players on the cloud across the tiers where you play, are you seeing more competition? Are your win rates still keeping up? Just maybe any context there would be helpful. Sure. Again, I think here, from our perspective, there is a difference between Europe and the U.S. When we look at the European market, our win rate is very high. We are continuing the trend that we saw last year, both on the life side and the P&C side. We are progressing very well on the deals, going to the leading stages and continuing a very high win rate. In the North America market, it's more of a mixed type of approach. We returned to the market last year with a life proposition, with a full suite life. In the year, let's say 5 quarters that passed since then, we see tremendous progress in our pipeline and getting closer to close the deal. We just completed a blueprint with 1 major customer, which means it's only us, and it's basically creating the scope for the implementation, which we foresee to start soon. We just were selected for another customer in North America. Definitely strong improvement on the life side. On the P&C side, we see initial signs of improvement of our pipeline and the ability to progress the pipeline. At the moment we are shortlisted for few deals in North America P&C. Shortlisted means it's us and another vendor. We see there improvement, but we hope to see stronger improvement towards the end of the year. Great. That's very helpful. Thank you so much. Thank you. The next question is from Tavy Rosner of Barclays. Please go ahead. Hi, this is Chris Reimer on for Tavy. Thank you for taking my questions, and congratulations on a strong quarter. I wanted to just touch on the previous caller's question regarding the competition. Do you feel that you're seeing any lengthened deal processes or delayed decision-making as a result of increased costs that maybe the insurers are having on themselves? Just how does that relate to the uptick we're seeing in North America? Was that already baked in? Is that what you were already expecting versus what you were saying in previous quarters about the heavier H2 of the year? I think the question was split in 2 about competition, about the uptick in the States. Obviously Q1 versus Q1 with 2021, we had a growth in revenue quarter-over-quarter and staying flat from Q3 to Q4, then to Q1 2022. We will have uplifts in the revenue level in the States through the end of the year, but it's not significant. European and APAC will be the strongest area of growth of Sapiens. USA, North America this year will be single-digit growth, not significant. We expect because of all the steps that we are doing that will follow up in 2023 as a double-digit growth for North America also. This was the second part. Regarding competition and customer adaptation versus delays, et cetera, we don't see any material change from previous quarter in terms of customer behaviour. We don't see at the moment any real impact of the macroeconomic situation on decisions to buy. We see strong demand in the market. If we see delays, they are case by case, depending on a deal and not something that we can look at as a phenomenon or a trend. Mm-hmm. Great. Thanks. Just 1 follow-up regarding the increase to the operating margin guidance. Can you give some color around what's driving that? Is there anything else other than what you've already mentioned regarding the offshoring? I think we mentioned that, on top of offshoring, escalating the offshoring pace, there is some efficiency measure that we are taking place in the company. The third element, obviously, is economy of scale. We are a year behind the integration of recent acquisition that we have that obviously we can improve operational efficiency. All of that together make us to provide this guidance. Great. Thank you very much. That's it for me. The next question is from Dylan Becker of William Blair. Please go ahead. Hey, Roni and Roni. Appreciate you guys taking the questions, and then nice job here in the quarter. I guess, maybe first, since we talked about kind of in the past as well, leveraging some of these ancillary components. I know you mentioned the decision solution. You talked about reinsurance and maybe looking more to leverage partners in that higher tier segment, especially in North America as well. How much of that kind of plays into the investments you're making, the benefits of some of these live events you talked about in establishing some of that brand awareness, right? And then as well, some of the cross sell conversations as you look to transition maybe some of those larger customers to more core-based decision makings or discussions as well. Okay, let's start several components in your question. I'll try to break it. On the first part, we are definitely seeing an increase in the demand in deals to provide more than 1 component from Sapiens. As I mentioned, in the majority of the cases, we sell our new deals in the cloud, which is accompanied by a component of managed services that we provide in the cloud. In majority of the deals include API layer that we provide on top of the core, and either components from our digital solution, decision or our analytic solution. Definitely this platform approach that we promote, and this is the spirit of our R&D, how to actually make those different components work together, the insurance with P&C, the digital and data. We see the positive market reaction to this segment. In terms of partnerships, when we look at our ecosystem InsurTech partners, we're definitely keeping the work to increase our partners base. Today, I believe we are around 70 partners, ecosystem partners that we operate with globally, and we have a dedicated team that looks after this segment of the market, canvases it and signs new deals and new partnerships with such companies as needed to progress our penetration to different markets. In terms of our system integration collaboration, we chose to look at it for specific segments of our business and for very specific areas. We are working sporadically at the moment with some partners. Still doesn't have a major impact on our revenue. I would like to give more light on the cross sell. As Alex mentioned, obviously we have this all business application, ancillary products that you mentioned. We see a trend that it's starting from the, I would say, the last 2 years and going up, that all the new deals that we're signing is coming from additional application on top of that. This is not only ancillary product. This is also sometimes core product, P&C to life or vice versa. This is good trend, and we are trying to duplicate this also for existing customers, and this is an additional initiative that we are looking into to do this. Yeah. That's super helpful colour. Thank you both. Maybe Roni, to you again, here too. A lot of the margin expansion again has been driven by some of the scaling of that offshore operations, right? I guess where do we sit today relative to kind of the mix of those resources? Where again, what's the kind of steady state potential? Where can we see kind of further expansion as we continue to allocate more heads to those offshore areas? We are at the end of Q1 2022. We are sitting at about 47% offshore ratio. This is a combination of R&D and delivery team members almost for all products of Sapiens company, R&D and delivery. We see additional potential growing this number in the coming years that can add additional few hundred basis points to our operating margin. I would say this is a midterm goal, not an immediate one, because we need to keep the knowledge, train the people. Over time, we can do this. Today, we are operating in several locations offshore. I mentioned a few. For example, India, Poland, Lithuania, and we are thinking also potentially down the road to open additional locations to support this growth and profit margin. Got it. Very helpful. Thank you guys for taking the questions. There is a follow-up question from Surinder Singh of Jefferies. Please go ahead. Thank you. In terms of just the M&A environment valuations, any color you can add there in terms of your pipeline or just what you're seeing in the marketplace in deal flow? Yes, this is a good question. As you know, we like to do M&A, but we still see a high valuation for the company that we are looking for. We did a few almost due diligence, like every page, but we walked away because the high valuation. Many of those few things happen in Europe, but it's still the valuation is very high. If I add more color, we see the private companies following the public market, probably in delay. We still see them on high valuation, as Ronny mentioned. Down the road, I would say a few months, let's say 6 months, we think we see decrease in valuation also of a private company when we participate in these deals. Got it. That's helpful. That was my 1 follow-up. Thank you. The next question is from Henri Lapidot of Leumi Partners. Please go ahead. Yeah. Hi. I also wanted to ask about the M&A front, so I guess you answered for him. Thanks. Thank you, Henri. Thank you. There are no further questions at this time. Before I ask Mr. Al-Dor to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin in 2 hours. In the U.S., please call 1-888-269-0005. In Israel, please call 03-925-5938. Internationally, please call 972-3-925-5938. Mr. Al-Dor, would you like to make your concluding statement? Yes, definitely. Thank you for joining us today. We look forward to speaking with you again in our next earnings calls. Please note that we are hosting virtual one-on-one meetings at Needham Technology & Media Conference on Monday, May 16th. Reach out to your Needham representative to schedule a one-on-one meeting. Thank you. Thank you. This concludes the Sapiens International Corporation Q1 2022 results conference call. Thank you for your participation. You may go ahead and disconnect.