Document And Entity Information
Document And Entity Information | 6 Months Ended |
Jun. 30, 2020 | |
Document Information Line Items | |
Entity Registrant Name | SAPIENS INTERNATIONAL CORP N V |
Document Type | 6-K |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Entity Central Index Key | 0000885740 |
Document Period End Date | Jun. 30, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 127,978 | $ 66,295 |
Trade receivables (net of allowance for credit losses of $ 543 and $ 1,317 at December 31, 2019 and June 30, 2020 (unaudited), respectively) | 45,943 | 34,615 |
Unbilled receivables and contract assets | 17,026 | 15,606 |
Investment in restricted deposit | 22,890 | |
Other receivables and prepaid expenses | 9,041 | 7,817 |
Total current assets | 199,988 | 147,223 |
LONG-TERM ASSETS: | ||
Capitalized software development costs, net | 23,543 | 23,953 |
Other intangible assets, net | 39,096 | 34,035 |
Property and equipment, net | 16,486 | 16,601 |
Operating lease right-of-use assets | 50,231 | 49,539 |
Goodwill | 186,094 | 170,703 |
Severance pay fund | 5,839 | 5,106 |
Other long-term assets | 6,017 | 5,261 |
Total long-term assets | 327,306 | 305,198 |
Total assets | 527,294 | 452,421 |
CURRENT LIABILITIES: | ||
Trade payables | 5,738 | 5,107 |
Employees and payroll accruals | 29,282 | 26,710 |
Accrued expenses and other liabilities | 35,161 | 33,864 |
Current maturities of Series B Debentures | 19,796 | 9,898 |
Current maturities of operating lease liabilities | 9,073 | 8,312 |
Deferred revenues | 25,061 | 21,021 |
Total current liabilities | 124,111 | 104,912 |
LONG-TERM LIABILITIES: | ||
Series B Debentures, net of current maturities | 98,434 | 58,850 |
Deferred tax liabilities | 7,235 | 5,082 |
Other long-term liabilities | 8,312 | 8,321 |
Long-term operating lease liabilities | 44,319 | 43,394 |
Accrued severance pay | 7,367 | 6,364 |
Total long-term liabilities | 165,667 | 122,011 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
REDEEMABLE NON-CONTROLLING INTEREST | 458 | |
Share capital: | ||
Common shares of € 0.01 par value: Authorized: 70,000,000 shares at December 31, 2019 and June 30, 2020 (unaudited), respectively; Issued: 52,488,172 and 52,737,428 shares at December 31, 2019 and June 30, 2020 (unaudited), respectively; Outstanding: 50,159,876 and 50,409,132 shares at December 31, 2019 and June 30, 2020 (unaudited), respectively | 700 | 697 |
Additional paid-in capital | 220,725 | 217,014 |
Treasury shares, at cost - 2,328,296 Common shares at December 31, 2019 and June 30, 2020 (unaudited) | (9,423) | (9,423) |
Accumulated other comprehensive loss | (3,712) | (2,381) |
Retained earnings | 26,980 | 17,912 |
Total Sapiens International Corporation N.V. shareholders’ equity | 235,270 | 223,819 |
Non-controlling interests | 1,788 | 1,679 |
Total equity | 237,058 | 225,498 |
Total liabilities and equity | $ 527,294 | $ 452,421 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) $ in Thousands | Jun. 30, 2020USD ($)shares | Jun. 30, 2020€ / shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019€ / shares |
Statement of Financial Position [Abstract] | ||||
Net of allowance for credit losses (in Dollars) | $ | $ 1,317 | $ 543 | ||
Common shares, par value (in Euro per share) | € / shares | € 0.01 | € 0.01 | ||
Common shares, authorized | 70,000,000 | 70,000,000 | ||
Common shares, issued | 52,737,428 | 52,488,172 | ||
Common shares, outstanding | 50,409,132 | 50,159,876 | ||
Treasury shares, shares | 2,328,296 | 2,328,296 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 183,597 | $ 156,316 |
Cost of revenues | 109,074 | 95,055 |
Gross profit | 74,523 | 61,261 |
Operating expenses: | ||
Research and development | 19,854 | 17,700 |
Selling, marketing, general and administrative | 31,988 | 26,030 |
Total operating expenses | 51,842 | 43,730 |
Operating income | 22,681 | 17,531 |
Financial expense, net | 1,550 | 1,488 |
Income before taxes on income | 21,131 | 16,043 |
Taxes on income | 4,911 | 4,001 |
Net income | 16,220 | 12,042 |
Attributed to non-controlling interests | 103 | 47 |
Net income attributable to Sapiens’ shareholders | $ 16,117 | $ 11,995 |
Net earnings per share attributable to Sapiens’ shareholders: | ||
Basic (in Dollars per share) | $ 0.32 | $ 0.24 |
Diluted (in Dollars per share) | $ 0.32 | $ 0.24 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 16,220 | $ 12,042 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (1,331) | 4,813 |
Total comprehensive income | 14,889 | 16,855 |
Comprehensive income attributed to non-controlling interests | 103 | 85 |
Comprehensive income attributable to Sapiens’ shareholders | $ 14,786 | $ 16,770 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Common stock | Additional paid-in capital | Treasury shares | Accumulated other comprehensive income (loss) | Retained earnings (Accumulated deficit) | Non-controlling interests | Total | |
Balance at Dec. 31, 2018 | $ 695 | $ 214,918 | $ (9,423) | $ (7,820) | $ 2,674 | $ 1,440 | $ 202,484 | |
Balance (in Shares) at Dec. 31, 2018 | 49,982,004 | |||||||
Stock-based compensation | 666 | 75 | 741 | |||||
Employee stock options exercised (cash and cashless) | [1] | 78 | 78 | |||||
Employee stock options exercised (cash and cashless) (in Shares) | 22,584 | |||||||
Distribution of dividend | (66) | (66) | ||||||
Other comprehensive income (loss) | 4,775 | 38 | 4,813 | |||||
Net income | 11,995 | 47 | 12,042 | |||||
Balance at Jun. 30, 2019 | $ 695 | 215,662 | (9,423) | (3,045) | 14,669 | 1,534 | 220,092 | |
Balance (in Shares) at Jun. 30, 2019 | 50,004,588 | |||||||
Balance at Dec. 31, 2019 | $ 697 | 217,014 | (9,423) | (2,381) | 17,912 | 1,679 | 225,498 | |
Balance (in Shares) at Dec. 31, 2019 | 50,159,876 | |||||||
Stock-based compensation | 1,380 | 6 | 1,386 | |||||
Employee stock options exercised (cash and cashless) | $ 3 | 2,331 | 2,334 | |||||
Employee stock options exercised (cash and cashless) (in Shares) | 249,256 | |||||||
Distribution of dividend | (7,049) | (7,049) | ||||||
Other comprehensive income (loss) | (1,331) | (1,331) | ||||||
Net income | 16,117 | 103 | 16,220 | |||||
Balance at Jun. 30, 2020 | $ 700 | $ 220,725 | $ (9,423) | $ (3,712) | $ 26,980 | $ 1,788 | $ 237,058 | |
Balance (in Shares) at Jun. 30, 2020 | 50,409,132 | |||||||
[1] | Represents an amount lower than $1. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 16,220 | $ 12,042 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation and amortization | 10,637 | 9,262 |
Stock-based compensation | 1,386 | 741 |
Accretion of discount on Series B Debentures | 77 | 84 |
Capital gain from sale of property and equipment | (129) | |
Net changes in operating assets and liabilities | ||
Trade receivables, net and unbilled receivables | (11,554) | 712 |
Other operating assets | 3,286 | (356) |
Deferred tax assets, net | (1,146) | (1,435) |
Trade payables | (275) | 190 |
Other operating liabilities | (2,187) | 152 |
Deferred revenues | 4,008 | 4,760 |
Accrued severance pay, net | 68 | 34 |
Net cash provided by operating activities | 20,520 | 26,057 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (945) | (1,720) |
Proceeds from sale of property and equipment | 821 | |
Net cash paid for acquisitions | (22,483) | |
Proceeds from restricted deposit used for completed acquisition | 22,890 | |
Investment in deposit | (379) | (1,119) |
Capitalized software development costs | (2,688) | (2,962) |
Net cash used in investing activities | (3,605) | (4,980) |
Cash flows from financing activities: | ||
Proceeds from employee stock options exercised | 2,334 | 78 |
Distribution of dividend | (6,632) | |
Repayment of loan | (20,000) | (4) |
Repayment of Series B Debentures | (9,898) | (9,898) |
Issuance of Series B Debentures, net of issuance expenses | 60,155 | |
Receipt of short-term loan | 20,000 | |
Payments of contingent consideration | (538) | (120) |
Dividend to non-controlling interest | (66) | |
Net cash provided by (used in) financing activities | 45,421 | (10,010) |
Effect of exchange rate changes on cash and cash equivalents | (653) | 1,587 |
Increase in cash, and cash equivalents | 61,683 | 12,654 |
Cash, cash equivalents at beginning of period | 66,295 | 64,628 |
Cash and cash equivalents at end of period | 127,978 | 77,282 |
Supplemental cash flow activities: | ||
Right-of-use assets obtained in the exchange for operating lease liabilities | 1,861 | 22,089 |
Unpaid withholding taxes in respect of dividend | 417 | |
Property and equipment purchase incurred but unpaid at period end | $ 403 | $ 1,006 |
General
General | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
GENERAL | NOTE 1: GENERAL Sapiens International Corporation N.V. (“Sapiens”) and its subsidiaries (collectively, the “Company”), a member of the Formula Systems (1985) Ltd. Group, is a global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector. The Company’s offerings include policy administration, billing and claims; underwriting, illustration and electronic application; reinsurance; and decision management software. Sapiens’ digital suite features customer and agent portals, and an advanced analytics solution. Sapiens global services include program management, project delivery and implementation of the Company’ software solutions, business services and managed services. The Company operates in North America, Europe, Asia Pacific and South Africa. In March 2020, the World Health Organization categorized the novel coronavirus (“COVID-19”) as a pandemic. The COVID-19 pandemic has rapidly changed market and economic conditions globally, impacting the Company's customers, employees, as well the Company' s business results of operations, although the COVID-19 has not had a material negative impact on the Company's business to date. The Company remains focused on protecting the health and wellbeing of its employees and the communities in which it operates, while assuring the continuity of the Company's business operations. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited interim consolidated balance sheet as of June 30, 2020, and consolidated statements of operations, the consolidated statements of comprehensive income and the consolidated statements of cash flows for the six months ended June 30, 2019 and 2020, as well as the statement of changes in shareholders’ equity for the six months ended June 30, 2020, are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2020, are not necessarily indicative of the results that may be expected for the year ended December 31, 2020. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes for the year ended December 31, 2019. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2019, are applied consistently in these consolidated financial statements except for the policies noted below which changed as a result of the adoption of Topic 326 . Trade Receivables and Allowances Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. The Company makes estimates of expected credit losses for the allowance for doubtful accounts in respect of trade receivables and unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers. Estimated credit loss allowance is recorded as general and administrative expenses on our condensed consolidated statements of income. As of June 30, 2020, $45,943 of trade receivables is presented net of an allowance of $1,317. a. Recently adopted accounting pronouncements: On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, using the modified retrospective transition method. Upon adoption, the Company changed its impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost, including trade receivables. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which requires the calculation of the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company adopted ASU 2017-04 as of January 1, 2020 with no material impact on its condensed interim consolidated financial statements. b. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Non-controlling interests of subsidiaries represent the non-controlling shareholders’ share of the total comprehensive income (loss) of the subsidiaries and fair value of the net assets upon the acquisition of the subsidiaries. The non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. c. Use of estimates: The preparation of the condensed interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Certain Transactions
Certain Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Nonmonetary Transactions [Abstract] | |
CERTAIN TRANSACTIONS | NOTE 3: CERTAIN TRANSACTIONS a. Acquisition of sum.cumo On February 6, 2020 (the “Acquisition Date”), Sapiens completed the acquisition of all outstanding shares of sum.cumo GmbH (“sum.cumo”), a German company. sum.cumo services insurers in the DACH region, helping them to achieve digital transformation of set up their existing business models or to design entirely new business models based on pure digital processes. sum.cumo’s experts in consulting, user experience, marketing and technology enable the region’s insurers to launch highly automated platforms well suited for e-commerce and real-time processing of transactions. In connection with the Company’s acquisition of sum.cumo, on February 6, 2020, the Company issued an aggregate of 173,005 RSUs to ten employees of sum.cumo in connection with the acquisition. The value of these grants was not included in the purchase price of sum.cumo, since their vesting is subject to both continued employment and other performance criteria. In addition, sum.cumo’s senior executives have retention-based payments over three years (2020-2023) of up to EUR 2,350. These payments are subject to continued employment, and therefore were not included in the purchase price. Acquisition related costs amounted to $540, and are presented under selling, marketing, general and administrative in the Company’s consolidated statements of income. The results of sum.cumo’s operations have been included in the consolidated financial statements from the acquisition date. The table below presents the preliminary fair value that was allocated to sum.cumo’s assets and liabilities based upon fair values as determined by the Company. The valuation process to determine the fair values is not yet complete. The Company estimated the preliminary fair value of acquired assets and liabilities as of the effective time of the acquisition of sum.cumo based on information currently available, and continues to adjust those estimates upon refinement of market participant assumptions for integrating businesses, among other relevant considerations. Net assets (including cash of $ 981) $ 1,447 Intangible assets 9,730 Deferred taxes (3,211 ) Goodwill 15,068 Net assets acquired $ 23,034 The goodwill resulted from the acquisition of sum.cumo is primarily attributable to sales growth from future products, new customers and potential synergy with Sapiens, as well as certain intangible assets that do not qualify for separate recognition. Revenues and net income of sum.cumo included in the Company’s consolidated statements of income for the six months ended June 30, 2020 (unaudited) amounted to $9,750 and $385, respectively. b. Other acquisition During the six months ended June 30, 2020, we completed an additional acquisition for a total consideration of approximately $1.7 million. The valuation process to determine the fair values of the acquired intangibles as part of this acquisition is not yet complete. Revenues and net income attributed to this certain acquisition included in the Company’s consolidated statements of income for the six months ended June 30, 2020 (unaudited) were immaterial. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Revenues Disclosure [Abstract] | |
REVENUE RECOGNITION | NOTE 4: REVENUE RECOGNITION The Company implements the provisions of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). On most occasions, the Company generates revenues from sales of software licenses which include significant implementation and customization services. Such software licenses and implementation and customization services are not considered distinct performance obligations and are accounted for as one performance obligation. In addition, the Company generates revenues from post implementation consulting services and maintenance services. Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. The aggregate amount of consideration allocated to performance obligations either not satisfied or partially unsatisfied from fixed price projects and post contract support services was approximately $179 million as of June 30, 2020. The Company expects to recognize approximately 47% in the remainder of 2020 from remaining performance obligations as of June 30, 2020 and the remainder in 2021 and thereafter . Disaggregation of revenue The following table provides information about disaggregated revenue by type of contract, and timing of revenue recognition (in thousands): Six months ended June 30, 2019 2020 Total Unaudited Type of contract T&M contracts $ 89,706 $ 119,594 Fixed-priced contracts 66,610 64,003 Total 156,316 183,597 Timing of revenue recognition Products transferred at a point in time 5,003 5,200 Products and services transferred over time 151,313 178,397 Total $ 156,316 $ 183,597 Contract balances: The following table provides information about trade receivables, contract assets (unbilled receivables) and contract liabilities (deferred revenues) from contracts with customers (in thousands): December 31, June 30, 2020 Unaudited Trade receivables 34,615 45,943 Contract assets *) 6,095 6,161 Short-term unbilled receivables **) 9,511 10,865 Long-term unbilled receivables **) 362 782 Deferred revenues (short-term contract liabilities) 21,021 25,061 Long-term deferred revenues (long-term contract liabilities) ***) 216 - (*) Contract assets relate to unbilled receivables, which represent revenue recognized on arrangements for which billings have not yet been presented to customers because the amounts were earned but not contractually billable as of the balance sheet date, and the right to consideration is generally subject to milestone completion, client acceptance or factors other than the passage of time. (**) Unbilled receivables relate to revenue recognized in excess of amounts invoiced as the Company has an unconditional right to invoice and receive payment in the future related to its fulfilled obligations. ***) Included in other long-term liabilities in the consolidated balance sheets Trade receivable are recorded when the right to consideration becomes unconditional, and an invoice is issued to the customer. Unbilled receivables related to the Company’s contractual right to consideration for services performed and not yet invoiced. Billing terms and conditions generally vary by contract type. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly or quarterly) or upon achievement of contractual milestones. Deferred revenues represent contract liabilities, and include unearned amounts received under contracts with customers and not yet recognized as revenues. During the year ended six months ended June 30, 2020, the Company recognized $ 14,996 of revenues that were included in deferred revenues (short-term contract liabilities) balance at January 1, 2020. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Leases | NOTE 5: LEASES The Company leases substantially all of its office space and vehicles under operating leases. The Company’s leases have original lease periods expiring between 2020 and 2029. Some leases include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably certain at lease commencement. Lease payments included in the measurement of the lease liability comprise the following: the fixed non-cancellable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Under Topic 842, all leases with durations greater than 12 months, including non-cancellable operating leases, are now recognized on the balance sheet. The aggregated present value of lease agreements is recorded as a long-term asset titled Right of Use (“ROU”) assets. The corresponding lease liabilities are split between operating lease liabilities between and long-term liabilities. The components of operating lease costs were as follows: Six months ended June 30, 2019 2020 Unaudited Operating lease cost $ 2,449 $ 3,923 Variable lease cost 1,937 1,955 Short-term lease cost 101 114 Total lease costs $ 4,487 $ 5,992 The following is a summary of weighted average remaining lease terms and discount rates for all of the Company’s operating leases: June 30, 2020 Unaudited Weighted average remaining lease term (years) 7.9 Weighted average discount rate 4.74 % Cash paid for amounts included in the measurement of operating lease liabilities for the six months ended June 30, 2020 and 2019 (unaudited) was $4,608 and 3,740, respectively. Maturities of lease liabilities are as follows: The remainder of 2020 $ 5,464 2021 8,280 2022 8,268 2023 7,503 2024 6,688 2025 and thereafter 29,015 Total undiscounted cash flows 65,218 Less imputed interest 11,826 Present value of lease liabilities $ 53,392 |
Capitalized Software Developmen
Capitalized Software Development Costs, Net | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | NOTE 6: CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET The changes in capitalized software development costs during the six months ended June 30, 2020 and the year ended December 31, 2019 were as follows: Year ended December 31, Six months ended 2019 2020 Unaudited Balance at the beginning of the year $ 22,434 $ 23,953 Capitalization 5,665 2,688 Amortization (5,668 ) (3,027 ) Functional currency translation adjustments 1,522 (71 ) Balance at year end $ 23,953 $ 23,543 Amortization of capitalized software development costs for the six months ended June 30, 2020 and the year ended December 31, 2019 was $3,027 and $5,668, respectively, and is included in cost of revenues. |
Other Intangible Assets, Net
Other Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
OTHER INTANGIBLE ASSETS, NET | NOTE 7:- OTHER INTANGIBLE ASSETS, NET a. Other intangible assets, net, are comprised of the following: Weighted average December 31, Six months 2019 2020 Unaudited Original amounts: Customer relationships 7.2 $ 23,409 $ 32,407 Technology 3.6 53,944 55,319 77,353 87,726 Accumulated amortization: Customer relationships 14,673 15,905 Technology 28,645 32,725 43,318 48,630 Other intangible assets, net $ 34,035 $ 39,096 b. Amortization of other intangible assets was $5,428 and $4,981 for the six months ended June 30, 2020 and 2019, respectively. c. Estimated amortization expense for future periods as of June 30, 2020: Remainder of 2020 $ 5,719 2021 10,401 2022 7,047 2023 6,715 2024 3,869 2025 and thereafter 5,345 $ 39,096 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
GOODWILL | NOTE 8:- GOODWILL The changes in the carrying amount of goodwill for the six months ended June 30, 2020 and the year ended December 31, 2019 are as follows: Year ended Six months Unaudited Balance at the beginning of the period $ 166,094 $ 170,703 Acquisitions 622 15,715 Functional currency translation adjustments 3,987 (324 ) $ 170,703 $ 186,094 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 9: FAIR VALUE MEASUREMENT FASB ASC No. 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value. Fair value is an exit price, representing the amount that would be received for selling an asset or paid for the transfer of a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 Unadjusted quoted prices in active markets that are accessible on the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company measures its foreign currency derivative contracts. Derivative contracts are classified within Level II as the valuation inputs are based on quoted prices and market observable data of similar instruments. The carrying amounts of cash and cash equivalents, accounts receivable, and trade payables approximates their fair value, due to the short-term maturities of such instruments. The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 : December 31, June 30, Unaudited Fair value measurement using Other receivables and prepaid expenses Derivative instruments $ - $ 607 Total assets $ - $ 607 Other accrued expenses Derivative instruments $ (67 ) $ - Total liabilities $ (67 ) $ - |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | NOTE 10: DERIVATIVE INSTRUMENTS The Company’s option and forward contracts do not qualify as hedging instruments under ASC 815, “Derivatives and hedging”. Changes in the fair value of option strategies are reflected in the consolidated statements of income as financial income or expense. During the six months ended June 30, 2020 and 2019, the Company entered into option contracts in the notional amounts of $2,310 (unaudited) and $41,348 (unaudited), respectively, and during the six months ended June 30, 2020 and 2019, the Company entered into forward contracts in the notional amounts of $71,000 (unaudited) and $43,602 (unaudited), respectively, in order to protect against foreign currency fluctuations. As of June 30, 2020, and December 31, 2019, the Company had outstanding options and forward contracts, in the notional amount of $44,760 and $15,384 (unaudited), respectively. During the six months ended June 30, 2020 and 2019, the Company recorded income (expense) of $(637) (unaudited), and $55 (unaudited), respectively, with respect to the above transactions, presented in the statements of income as financial income. |
Series B Debentures, Net of Cur
Series B Debentures, Net of Current Maturities | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
SERIES B DEBENTURES, NET OF CURRENT MATURITIES | NOTE 11: SERIES B DEBENTURES, NET OF CURRENT MATURITIES December 31, June 30, Unaudited Series B Debentures $ 69,287 $ 118,778 Less: Current maturities (9,898 ) (19,796 ) Less: Unamortized debt premium, discount and issuance costs (539 ) (548 ) $ 58,850 $ 98,434 In September 2017, the Company issued Series B Debentures in the aggregate principal amount of NIS 280 million (approximately $79.2 million), linked to the US dollars, payable in eight equal annual payments of $9,898, on January 1 of each of the years 2019 through 2026. The outstanding principal amount of the Series B Debentures will bear a fixed interest rate of 3.37% per annum, payable on January 1 and July 1 of each of the years 2018 through 2025, with one final interest payment on January 1, 2026. Debt discount and issuance costs were approximately $956, allocated to the Series B Debentures discount and are amortized as financial expenses over the term of the Series B Debentures due in 2026. In June 2020, the Company extended the Series B Debentures and raised an additional NIS 210 million (approximately $60.2 million) linked to US dollars, payable in six equal annual payments of $9,898, on January 1 of each of the years 2021 through 2026. The outstanding principal amount of the Series B Debentures will bear a fixed interest rate of 3.37% per annum, payable on January 1 and July 1 of each of the years 2020 through 2025, with one final interest payment on January 1, 2026. Debt premium and issuance costs, net were approximately $83, allocated to the Series B Debentures discount and are amortized as financial expenses over the term of the Series B Debentures due in 2026. Following the raise of the additional NIS 210 million in Series B Debentures, a $20,000 short-term bank loan which taken on March 18, 2020 from a commercial bank. was fully repaid on June 9, 2020. The Series B Debentures are listed for trading on the Tel-Aviv Stock Exchange. The Series B Debentures are unsecured and non-convertible. The Series B Debentures interest may be increased in the event that the debentures’ rating is downgraded below a certain level. The Company has undertaken to maintain a number of conditions and limitations on the manner in which it operates its business, including limitations on its ability to undergo a change of control, distribute dividends, incur a floating charge on the Company’s assets, or undergo an asset sale or other change that results in a fundamental change in the Company’s operations. In accordance with the indenture for the Series B Debentures, the Company is required to meet the following financial covenants: (1) Target shareholders’ equity (excluding minority interest)- above $120 million – as of June 30, 2020, total shareholders’ equity was $237 million; and (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% - as of June 30, 2020 the ratio of net financial indebtedness to net capitalization was (3.4)%. (3) Target ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is below 5.5. As of June 30, 2020, the Target ratio of net financial indebtedness to EBITDA was (0.1). As of June 30, 2020, Sapiens is in compliance with all of its financial covenants. During the six months ended June 30, 2020 and 2019, the Company recorded $1,147 (unaudited) and $1,159 (unaudited), respectively of interest expense and $77 and $84, respectively as amortization of debt issuance costs and, premium and discount in respect of the Series B Debentures. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 12: COMMITMENTS AND CONTINGENT LIABILITIES a. Sapiens Technologies (1982) Ltd. (“Sapiens Technologies”), a subsidiary incorporated in Israel, was partially financed under programs sponsored by the Israel Innovation Authority (“IIA”), formerly the Office of the Chief Scientist, for the support of certain research and development activities conducted in Israel. In exchange for participation in the programs by the IIA, the Company agreed to pay 3.5% of total net consolidated license and maintenance revenue and 0.35% of the net consolidated consulting services revenue related to the software developed within the framework of these programs based on an understanding with the IIA reached in January 2012. The royalties will be paid up to a maximum amount equalling 100%-150% of the grants provided by the IIA, linked to the dollar, and for grants received after January 1, 1999, bear annual interest at a rate based on LIBOR. Royalty expense amounted to $238 (unaudited) and $232 (unaudited) in the six months ended June 30, 2020 and 2019, respectively, and are included in cost of revenues. As of June 30, 2020, the Company had a contingent liability to pay royalties of $6,110 (unaudited). b. As of June 30, 2020, the Company provided bank guarantees in the amount of $834 (unaudited) as security for the rent to be paid for its leased offices. The bank guarantees are valid through February 2021 and thereafter will be renewed for the same amount through March 2022. As of June 30, 2020, the Company provided bank guarantees of $203 (unaudited) as security for the performance of various contracts with customers and suppliers. In addition, as of June 30, 2020 (unaudited), the Company had no restricted bank deposits in favour of the bank guarantees. d. In accordance with the indenture for the Series B Debentures, the Company is required to meet certain financial covenants. See Note 11 above. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | NOTE 13: EQUITY a. Stock option plans: In 2011, the Company’s board of directors approved its 2011 Share Incentive Plan (the “2011 Plan”) pursuant to which the Company’s employees, directors, officers, consultants, advisors, suppliers, business partners, customers and any other person or entity whose services are considered valuable are eligible to receive awards of share options, restricted shares, restricted share units and other share-based awards. Options granted under the 2011 Plan may be exercised for a period of up to six years from the date of grant and become exercisable in four equal, annual instalments, beginning with the first anniversary of the date of the grant, or pursuant to such other schedule as may provide in the option agreement. The total number of Common Shares available under the 2011 Plan was set at 8,000,000. Upon the approval of the 2011 Plan, the board of directors determined that no further awards would be issued under the Company’s previously existing share incentive plans. As of June 30, 2020, 2,682,217 (unaudited) common shares of the Company were available for future grant under the 2011 Plan. Any options granted under the 2011 Plan which are forfeited, cancelled, terminated or expired, will become available for future grant under the 2011 Plan. A summary of the stock option activities in the six months ended June 30, 2020 (unaudited) is as follows: Six months ended June 30, 2020 (unaudited) Amount of Weighted Weighted Aggregate Outstanding at January 1, 2020 1,869,412 10.25 3.21 $ 23,838 Granted 235,000 25.12 Exercised (249,256 ) 9.75 Expired and forfeited (110,492 ) 11.30 Outstanding at June 30, 2020 1,744,664 12.12 3.03 $ 27,667 Vested and expected to vest 1,744,664 12.12 3.03 $ 27,667 Exercisable at June 30, 2020 1,040,450 9.62 2.17 $ 19,101 The weighted average grant date fair values of the options granted during the six months ended June 30, 2020 (unaudited) was $8.50. The total intrinsic value of options exercised during the six months ended June 30, 2020 (unaudited) was $3,481. The total equity-based compensation expense related to all of the Company’s equity-based awards, recognized for the six months ended June 30, 2020 and 2019 was $1,386 (unaudited) and $741 (unaudited), respectively, and were included in Selling, marketing, general and administrative expenses in the Company’s condensed consolidated statements of income. A summary of the RSU activities in the six months ended June 30, 2020 (unaudited) is as follows: Amount of Weighted Unvested at January 1, 2020 - - Granted 238,005 24.45 Unvested at June 30, 2020 238,005 24.45 In connection with the Company’s acquisition of sum.cumo, on February 6, 2020 (see Note 3), the Company issued an aggregate of 173,005 RSUs to certain employees of sum.cumo in connection with the acquisition. The value of these grants was not included in the purchase price of sum.cumo, since their vesting is subject to both continued employment and other performance criteria. The Company recorded compensation costs related to RSUs of $602 (unaudited) for the six months ended June 30, 2020, which were included in Selling, marketing, general and administrative expenses in the Company’s condensed consolidated statements of income. b. As of June 30, 2020, there was $8,617 (unaudited) of total unrecognized compensation cost related to non-vested options and RSUs, which is expected to be recognized over a period of 2.7 years. c. Dividend On May 14, 2020, the Company’s extraordinary general meeting of shareholders approved the distribution of a cash dividend of $0.14 per common share for a total amount of $7,049 (unaudited). Of that amount, $6,632 (unaudited) was paid on June 10, 2020. The remainder, which represents withheld taxes on the dividend of $417 (unaudited), was paid during July 2020. |
Basic and Diluted Net Income Pe
Basic and Diluted Net Income Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED NET INCOME PER SHARE | NOTE 14: BASIC AND DILUTED NET INCOME PER SHARE Six months ended 2019 2020 Unaudited Numerator (thousands): Net income used for earnings per share $ 11,995 $ 16,117 Denominator (thousands): Denominator for basic earnings per share - weighted average number of common shares, net of treasury stock 49,994 50,236 Stock option and RSUs 436 892 Denominator for diluted net earnings per share - adjusted weighted average number of shares 50,430 51,128 The weighted average number of shares related to outstanding anti-dilutive options excluded from the calculations of diluted net earnings per share was 306,141 (unaudited) and 0 (unaudited) for the six months June 30, 2020 and 2019, respectively. |
Geographic Information
Geographic Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION | NOTE 15: GEOGRAPHIC INFORMATION a. The Company operates in a single reportable segment as a provider of software solutions. See Note 1 for a brief description of the Company’s business. The data below is presented in accordance with ASC 280, “Segment Reporting”. b. Geographic information: The following table sets forth revenues by country based on the billing address of the customer. Other than as shown below, no other country accounted for more than 10% of the Company’s revenues during the six months ended June 30, 2020 and 2019 (unaudited): Six months ended 2019 2020 Unaudited Revenues: North America *) $ 77,365 $ 91,177 Europe 66,074 81,262 Rest of the world 12,877 11,158 $ 156,316 $ 183,597 *) Revenue derived from North America consist primarily of revenues from the United States, except for approximately $280 (unaudited) and $351 (unaudited) of revenues derived from Canada during the six months ended June 30, 2020 and 2019, respectively. c. Major customer data: During the six months ended June 30, 2020 and 2019 (unaudited), the Company has not generated revenues from a single customer exceeding 10% of its total revenues. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 16: SUBSEQUENT EVENT a. Acquisition of Delphi Technology Inc. On July 27, 2020, the Company completed the acquisition of Delphi Technology Inc. (“Delphi”), a software vendor focused on the medical professional liability insurance carrier markets in the United States. The total purchase price was $19.6 million in cash. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently adopted accounting pronouncements: | a. Recently adopted accounting pronouncements: On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, using the modified retrospective transition method. Upon adoption, the Company changed its impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost, including trade receivables. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which requires the calculation of the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company adopted ASU 2017-04 as of January 1, 2020 with no material impact on its condensed interim consolidated financial statements. |
Principles of consolidation: | b. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Non-controlling interests of subsidiaries represent the non-controlling shareholders’ share of the total comprehensive income (loss) of the subsidiaries and fair value of the net assets upon the acquisition of the subsidiaries. The non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. |
Use of Estimates, Policy [Policy Text Block] | c. Use of estimates: The preparation of the condensed interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Certain Transactions (Tables)
Certain Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Nonmonetary Transactions [Abstract] | |
Schedule of Other Assets, Noncurrent | Net assets (including cash of $ 981) $ 1,447 Intangible assets 9,730 Deferred taxes (3,211 ) Goodwill 15,068 Net assets acquired $ 23,034 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Revenues Disclosure [Abstract] | |
Schedule of disaggregated revenue | Six months ended June 30, 2019 2020 Total Unaudited Type of contract T&M contracts $ 89,706 $ 119,594 Fixed-priced contracts 66,610 64,003 Total 156,316 183,597 Timing of revenue recognition Products transferred at a point in time 5,003 5,200 Products and services transferred over time 151,313 178,397 Total $ 156,316 $ 183,597 |
Schedule of trade receivables, contract assets and contract liabilities from contracts with customers | December 31, June 30, 2020 Unaudited Trade receivables 34,615 45,943 Contract assets *) 6,095 6,161 Short-term unbilled receivables **) 9,511 10,865 Long-term unbilled receivables **) 362 782 Deferred revenues (short-term contract liabilities) 21,021 25,061 Long-term deferred revenues (long-term contract liabilities) ***) 216 - (*) Contract assets relate to unbilled receivables, which represent revenue recognized on arrangements for which billings have not yet been presented to customers because the amounts were earned but not contractually billable as of the balance sheet date, and the right to consideration is generally subject to milestone completion, client acceptance or factors other than the passage of time. (**) Unbilled receivables relate to revenue recognized in excess of amounts invoiced as the Company has an unconditional right to invoice and receive payment in the future related to its fulfilled obligations. ***) Included in other long-term liabilities in the consolidated balance sheets |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Schedule of operating lease costs | Six months ended June 30, 2019 2020 Unaudited Operating lease cost $ 2,449 $ 3,923 Variable lease cost 1,937 1,955 Short-term lease cost 101 114 Total lease costs $ 4,487 $ 5,992 |
Schedule of operating lease costs | June 30, 2020 Unaudited Weighted average remaining lease term (years) 7.9 Weighted average discount rate 4.74 % |
Schedule of Maturities of lease liabilities | The remainder of 2020 $ 5,464 2021 8,280 2022 8,268 2023 7,503 2024 6,688 2025 and thereafter 29,015 Total undiscounted cash flows 65,218 Less imputed interest 11,826 Present value of lease liabilities $ 53,392 |
Capitalized Software Developm_2
Capitalized Software Development Costs, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of changes in capitalized software development costs | Year ended December 31, Six months ended 2019 2020 Unaudited Balance at the beginning of the year $ 22,434 $ 23,953 Capitalization 5,665 2,688 Amortization (5,668 ) (3,027 ) Functional currency translation adjustments 1,522 (71 ) Balance at year end $ 23,953 $ 23,543 |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Weighted average December 31, Six months 2019 2020 Unaudited Original amounts: Customer relationships 7.2 $ 23,409 $ 32,407 Technology 3.6 53,944 55,319 77,353 87,726 Accumulated amortization: Customer relationships 14,673 15,905 Technology 28,645 32,725 43,318 48,630 Other intangible assets, net $ 34,035 $ 39,096 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Remainder of 2020 $ 5,719 2021 10,401 2022 7,047 2023 6,715 2024 3,869 2025 and thereafter 5,345 $ 39,096 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Goodwill | Year ended Six months Unaudited Balance at the beginning of the period $ 166,094 $ 170,703 Acquisitions 622 15,715 Functional currency translation adjustments 3,987 (324 ) $ 170,703 $ 186,094 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | December 31, June 30, Unaudited Fair value measurement using Other receivables and prepaid expenses Derivative instruments $ - $ 607 Total assets $ - $ 607 Other accrued expenses Derivative instruments $ (67 ) $ - Total liabilities $ (67 ) $ - |
Series B Debentures, Net of C_2
Series B Debentures, Net of Current Maturities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | December 31, June 30, Unaudited Series B Debentures $ 69,287 $ 118,778 Less: Current maturities (9,898 ) (19,796 ) Less: Unamortized debt premium, discount and issuance costs (539 ) (548 ) $ 58,850 $ 98,434 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of RSU activities | Six months ended June 30, 2020 (unaudited) Amount of Weighted Weighted Aggregate Outstanding at January 1, 2020 1,869,412 10.25 3.21 $ 23,838 Granted 235,000 25.12 Exercised (249,256 ) 9.75 Expired and forfeited (110,492 ) 11.30 Outstanding at June 30, 2020 1,744,664 12.12 3.03 $ 27,667 Vested and expected to vest 1,744,664 12.12 3.03 $ 27,667 Exercisable at June 30, 2020 1,040,450 9.62 2.17 $ 19,101 |
Schedule of RSU activities | Amount of Weighted Unvested at January 1, 2020 - - Granted 238,005 24.45 Unvested at June 30, 2020 238,005 24.45 |
Basic and Diluted Net Income _2
Basic and Diluted Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | Six months ended 2019 2020 Unaudited Numerator (thousands): Net income used for earnings per share $ 11,995 $ 16,117 Denominator (thousands): Denominator for basic earnings per share - weighted average number of common shares, net of treasury stock 49,994 50,236 Stock option and RSUs 436 892 Denominator for diluted net earnings per share - adjusted weighted average number of shares 50,430 51,128 |
Geographic Information (Tables)
Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | Six months ended 2019 2020 Unaudited Revenues: North America *) $ 77,365 $ 91,177 Europe 66,074 81,262 Rest of the world 12,877 11,158 $ 156,316 $ 183,597 *) Revenue derived from North America consist primarily of revenues from the United States, except for approximately $280 (unaudited) and $351 (unaudited) of revenues derived from Canada during the six months ended June 30, 2020 and 2019, respectively. |
Significant Accounting Polici_2
Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Trade receivables | $ 45,943 | $ 34,615 |
Trade receivables, allowance for doubtful accounts | $ 1,317 | $ 543 |
Certain Transactions (Details)
Certain Transactions (Details) $ in Thousands | Feb. 06, 2020USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Certain Transactions (Details) [Line Items] | |||
Restricted stock units (in Shares) | shares | 173,005 | ||
Entity Number of Employees | 10 | ||
Retention based payments, description | In addition, sum.cumo’s senior executives have retention-based payments over three years (2020-2023) of up to EUR 2,350. | ||
Revenues | $ 183,597 | $ 156,316 | |
Net income | 16,117 | $ 11,995 | |
Additional acquisition amount | 1,700 | ||
Acquisition related costs [Member] | |||
Certain Transactions (Details) [Line Items] | |||
Acquisition related costs amount | $ 540 | ||
Sum.cumo [Member] | |||
Certain Transactions (Details) [Line Items] | |||
Revenues | 9,750 | ||
Net income | $ 385 |
Certain Transactions (Details)
Certain Transactions (Details) - Schedule of Other Assets, Noncurrent $ in Thousands | Jun. 30, 2020USD ($) |
Schedule of Other Assets, Noncurrent [Abstract] | |
Net assets (including cash of $ 981) | $ 1,447 |
Intangible assets | 9,730 |
Deferred taxes | (3,211) |
Goodwill | 15,068 |
Net assets acquired | $ 23,034 |
Certain Transactions (Details_2
Certain Transactions (Details) - Schedule of Other Assets, Noncurrent (Parentheticals) $ in Thousands | Jun. 30, 2020USD ($) |
Schedule of Other Assets, Noncurrent [Abstract] | |
Cash | $ 981 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue Recognition (Details) [Line Items] | ||
Performance obligation | $ 179,000 | |
Percentage of remaining performance obligations | 47.00% | |
Revenues | $ 183,597 | $ 156,316 |
ASC 606 [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Revenues | $ 14,996 |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of disaggregated revenue - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Type of contract | ||
Total | $ 183,597 | $ 156,316 |
Products transferred at a point in time [Member] | ||
Type of contract | ||
Total | 5,200 | 5,003 |
Products and services transferred over time [Member] | ||
Type of contract | ||
Total | 178,397 | 151,313 |
Timing of Revenue Recognition [Member] | ||
Type of contract | ||
Total | 183,597 | 156,316 |
T&M contracts [Member] | ||
Type of contract | ||
Total | 119,594 | 89,706 |
Fixed-priced contracts [Member] | ||
Type of contract | ||
Total | 64,003 | 66,610 |
Timing of Revenue Recognition [Member] | ||
Type of contract | ||
Total | $ 183,597 | $ 156,316 |
Revenue Recognition (Details)_2
Revenue Recognition (Details) - Schedule of trade receivables, contract assets and contract liabilities from contracts with customers - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Schedule of trade receivables, contract assets and contract liabilities from contracts with customers [Abstract] | |||
Trade receivables | $ 45,943 | $ 34,615 | |
Contract assets | [1] | 6,161 | 6,095 |
Short-term unbilled receivables | [2] | 10,865 | 9,511 |
Long-term unbilled receivables | [2] | 782 | 362 |
Deferred revenues (short-term contract liabilities) | 25,061 | 21,021 | |
Long-term deferred revenues (long-term contract liabilities) | [3] | $ 216 | |
[1] | Contract assets relate to unbilled receivables, which represent revenue recognized on arrangements for which billings have not yet been presented to customers because the amounts were earned but not contractually billable as of the balance sheet date, and the right to consideration is generally subject to milestone completion, client acceptance or factors other than the passage of time. | ||
[2] | Unbilled receivables relate to revenue recognized in excess of amounts invoiced as the Company has an unconditional right to invoice and receive payment in the future related to its fulfilled obligations. | ||
[3] | Included in other long-term liabilities in the consolidated balance sheets |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Leases (Details) [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 12 years | ||
Operating lease liabilities | $ 9,073 | $ 8,312 | |
Leases [Member] | |||
Leases (Details) [Line Items] | |||
Operating lease liabilities | $ 4,608 | $ 3,740 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating lease costs - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of operating lease costs [Abstract] | ||
Operating lease cost | $ 3,923 | $ 2,449 |
Variable lease cost | 1,955 | 1,937 |
Short-term lease cost | 114 | 101 |
Total lease costs | $ 5,992 | $ 4,487 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of weighted average remaining lease terms and discount rates | Jun. 30, 2020 |
Schedule of weighted average remaining lease terms and discount rates [Abstract] | |
Weighted average remaining lease term (years) | 7 years 328 days |
Weighted average discount rate | 4.74% |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of Maturities of lease liabilities $ in Thousands | Jun. 30, 2020USD ($) |
Schedule of Maturities of lease liabilities [Abstract] | |
The remainder of 2020 | $ 5,464 |
2021 | 8,280 |
2022 | 8,268 |
2023 | 7,503 |
2024 | 6,688 |
2025 and thereafter | 29,015 |
Total undiscounted cash flows | 65,218 |
Less imputed interest | 11,826 |
Present value of lease liabilities | $ 53,392 |
Capitalized Software Developm_3
Capitalized Software Development Costs, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Amortization of capitalized software development costs | $ 3,027 | $ 5,668 |
Capitalized Software Developm_4
Capitalized Software Development Costs, Net (Details) - Schedule of changes in capitalized software development costs - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Schedule of changes in capitalized software development costs [Abstract] | ||
Balance at the beginning of the year | $ 23,953 | $ 22,434 |
Capitalization | 2,688 | 5,665 |
Amortization | (3,027) | (5,668) |
Functional currency translation adjustments | (71) | 1,522 |
Balance at year end | $ 23,543 | $ 23,953 |
Other Intangible Assets, Net (D
Other Intangible Assets, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 5,428 | $ 4,981 |
Other Intangible Assets, Net _2
Other Intangible Assets, Net (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Original amounts: | ||
Intangible asset, Gross | $ 87,726 | $ 77,353 |
Accumulated amortization: | ||
Intangible assets, Accumulated amortization | 48,630 | 43,318 |
Other intangible assets, net | $ 39,096 | 34,035 |
Customer relationships [Member] | ||
Original amounts: | ||
Weighted average remaining useful life (years) | 7 years 73 days | |
Intangible asset, Gross | $ 32,407 | 23,409 |
Accumulated amortization: | ||
Intangible assets, Accumulated amortization | $ 15,905 | 14,673 |
Technology [Member] | ||
Original amounts: | ||
Weighted average remaining useful life (years) | 3 years 219 days | |
Intangible asset, Gross | $ 55,319 | 53,944 |
Accumulated amortization: | ||
Intangible assets, Accumulated amortization | $ 32,725 | $ 28,645 |
Other Intangible Assets, Net _3
Other Intangible Assets, Net (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ||
Remainder of 2020 | $ 5,719 | |
2021 | 10,401 | |
2022 | 7,047 | |
2023 | 6,715 | |
2024 | 3,869 | |
2025 and thereafter | 5,345 | |
Other intangible assets amortization expense | $ 39,096 | $ 34,035 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of Goodwill - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Schedule of Goodwill [Abstract] | ||
Balance at the beginning of the period | $ 170,703 | $ 166,094 |
Acquisitions | 15,715 | 622 |
Functional currency translation adjustments | (324) | 3,987 |
Balance at year end | $ 186,094 | $ 170,703 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Schedule of assets and liabilities measured at fair value on a recurring basis - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other receivables and prepaid expenses | ||
Derivative instruments | $ 607 | |
Total assets | 607 | |
Other accrued expenses | ||
Derivative instruments | (67) | |
Total liabilities | $ (67) |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Contracts, description | the Company entered into option contracts in the notional amounts of $2,310 (unaudited) and $41,348 (unaudited), respectively, and during the six months ended June 30, 2020 and 2019, the Company entered into forward contracts in the notional amounts of $71,000 (unaudited) and $43,602 (unaudited), respectively, in order to protect against foreign currency fluctuations. | ||
Derivative notional amount | $ 44,760 | $ 15,384 | |
Income tax expensesa | $ (637) | $ 55 |
Series B Debentures, Net of C_3
Series B Debentures, Net of Current Maturities (Details) $ in Thousands, ₪ in Millions | 1 Months Ended | 6 Months Ended | ||||
Sep. 30, 2017USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020ILS (₪) | Mar. 18, 2020USD ($) | Sep. 30, 2017ILS (₪) | |
Debt Disclosure [Abstract] | ||||||
Principal amount | $ 79,200 | $ 60,200 | ₪ 210 | ₪ 280 | ||
Annual payments | $ 9,898 | $ 9,898 | ||||
Interest rate percentage | 3.37% | 3.37% | 3.37% | 3.37% | ||
Debt discount and issuance costs | $ 956 | $ 83 | ||||
short-term bank loan | $ 20,000 | |||||
Debt instrument, covenant description | In accordance with the indenture for the Series B Debentures, the Company is required to meet the following financial covenants: (1) Target shareholders’ equity (excluding minority interest)- above $120 million – as of June 30, 2020, total shareholders’ equity was $237 million; and (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% - as of June 30, 2020 the ratio of net financial indebtedness to net capitalization was (3.4)%. (3) Target ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is below 5.5. As of June 30, 2020, the Target ratio of net financial indebtedness to EBITDA was (0.1). As of June 30, 2020, Sapiens is in compliance with all of its financial covenants. | |||||
Interest Expense, Debt | $ 1,147 | $ 1,159 | ||||
Amortization of debt issuance costs | $ 77 | $ 84 |
Series B Debentures, Net of C_4
Series B Debentures, Net of Current Maturities (Details) - Schedule of Long-term Debt Instruments - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Long-term Debt Instruments [Abstract] | ||
Series B Debentures | $ 118,778 | $ 69,287 |
Less: Current maturities | (19,796) | (9,898) |
Less: Unamortized debt premium, discount and issuance costs | (548) | (539) |
Total | $ 98,434 | $ 58,850 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Commitments and Contingent Liabilities (Details) [Line Items] | ||
Percentage of total net consolidated license and maintenance revenue | 3.50% | |
Percentage of net consolidated consulting services revenue | 0.35% | |
Royalty Expense | $ 238,000 | $ 232,000 |
Contingent liability to pay royalties | 6,110 | |
Bank guarantees amount for leased offices | 834 | |
Bank guarantees amount for customers and suppliers | $ 203 | |
Minimum [Member] | ||
Commitments and Contingent Liabilities (Details) [Line Items] | ||
Percentage of royalties to paid grants received | 100.00% | |
Maximum [Member] | ||
Commitments and Contingent Liabilities (Details) [Line Items] | ||
Percentage of royalties to paid grants received | 150.00% |
Equity (Details)
Equity (Details) - USD ($) | Jun. 10, 2020 | May 14, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Equity (Details) [Line Items] | |||||
Total equity-based compensation expense | $ 1,386,000 | $ 741,000 | |||
Issued an aggregate (in Shares) | 173,005 | ||||
Compensation costs related | $ 602,000 | ||||
Unrecognized compensation cost related | $ 8,617 | ||||
Recognized over a period | 2 years 255 days | ||||
Cash dividend Per Shares (in Dollars per share) | $ 0.14 | ||||
Dividend common share | $ 6,632 | $ 7,049 | |||
Subsequent Event [Member] | |||||
Equity (Details) [Line Items] | |||||
Dividend paid | $ 417 | ||||
2011 Plan [Member] | |||||
Equity (Details) [Line Items] | |||||
Total number of common shares available (in Shares) | 8,000,000 | ||||
Director [Member] | 2011 Plan [Member] | |||||
Equity (Details) [Line Items] | |||||
Common shares available for future grant (in Shares) | 2,682,217 | ||||
Employees And Directors [Member] | |||||
Equity (Details) [Line Items] | |||||
Weighted average grant date fair values of options granted (in Dollars per share) | $ 8.50 | ||||
Total intrinsic value of options exercised | $ 3,481,000 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of Share-based Payment Arrangement, Option, Activity $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Schedule of Share-based Payment Arrangement, Option, Activity [Abstract] | |
Amount of options, Outstanding at Beginning balance | shares | 1,869,412 |
Weighted average exercise, Outstanding at Beginning balance | $ / shares | $ 10.25 |
Weighted average remaining contractual life, Outstanding at Beginning balance | 3 years 76 days |
Aggregate intrinsic value, Outstanding at Beginning balance | $ | $ 23,838 |
Amount of options, Granted | shares | 235,000 |
Weighted average exercise, Granted | $ / shares | $ 25.12 |
Amount of options,Exercised | shares | (249,256) |
Weighted average exercise, Exercised | $ / shares | $ 9.75 |
Amount of options,Expired and forfeited | shares | (110,492) |
Weighted average exercise, Expired and forfeited | $ / shares | $ 11.30 |
Amount of options, Outstanding at Beginning balance | shares | 1,744,664 |
Weighted average exercise, Outstanding at Beginning balance | $ / shares | $ 12.12 |
Weighted average remaining contractual life, Outstanding at Beginning balance | 3 years 10 days |
Aggregate intrinsic value, Outstanding at Beginning balance | $ | $ 27,667 |
Amount of options,Vested and expected to vest | shares | 1,744,664 |
Weighted average exercise,Vested and expected to vest | $ / shares | $ 12.12 |
Weighted average remaining contractual life, Vested and expected to vest | 3 years 10 days |
Aggregate intrinsic value,Vested and expected to vest | $ | $ 27,667 |
Amount of options,Exercisable at Ending | shares | 1,040,450 |
Weighted average exercise, Exercisable at Ending | $ / shares | $ 9.62 |
Weighted average remaining contractual life, Exercisable at Ending | 2 years 62 days |
Aggregate intrinsic value, Exercisable at Ending | $ | $ 19,101 |
Equity (Details) - Schedule o_2
Equity (Details) - Schedule of RSU activities | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Schedule of RSU activities [Abstract] | |
Amount of options, Unvested at Beginning balance | shares | |
Weighted Average Grant- Date Fair Value, Unvested at Ending | $ / shares | |
Amount of options, Granted | shares | 238,005 |
Weighted Average Grant- Date Fair Value, Granted | $ / shares | $ 24.45 |
Amount of options, Unvested at Beginning balance | shares | 238,005 |
Weighted Average Grant- Date Fair Value, Unvested at Ending | $ / shares | $ 24.45 |
Basic and Diluted Net Income _3
Basic and Diluted Net Income Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Diluted net earnings per share | 306,141 | 0 |
Basic and Diluted Net Income _4
Basic and Diluted Net Income Per Share (Details) - Schedule of earnings per share, basic and diluted - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator (thousands): | ||
Net income used for earnings per share (in Dollars) | $ 16,117 | $ 11,995 |
Denominator (thousands): | ||
Denominator for basic earnings per share - weighted average number of common shares, net of treasury stock | 50,236 | 49,994 |
Stock option and RSUs | 892 | 436 |
Denominator for diluted net earnings per share - adjusted weighted average number of shares | 51,128 | 50,430 |
Geographic Information (Details
Geographic Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Geographic Information (Details) [Line Items] | ||
Revenues (in Dollars) | $ 183,597 | $ 156,316 |
Percentage of revenue from single customer | 10.00% | 10.00% |
Sales [Member] | ||
Geographic Information (Details) [Line Items] | ||
Percentage of revenues from major customers | 10.00% | 10.00% |
Canada [Member] | ||
Geographic Information (Details) [Line Items] | ||
Revenues (in Dollars) | $ 280 | $ 351 |
Geographic Information (Detai_2
Geographic Information (Details) - Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
North America [Member] | |||
Revenues: | |||
Revenues | [1] | $ 91,177 | $ 77,365 |
Europe [Member] | |||
Revenues: | |||
Revenues | 81,262 | 66,074 | |
Rest of the World [Member] | |||
Revenues: | |||
Revenues | 11,158 | 12,877 | |
Total Revenues [Member] | |||
Revenues: | |||
Revenues | $ 183,597 | $ 156,316 | |
[1] | Revenue derived from North America consist primarily of revenues from the United States, except for approximately $280 (unaudited) and $351 (unaudited) of revenues derived from Canada during the six months ended June 30, 2020 and 2019, respectively. |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | 1 Months Ended |
Jul. 27, 2020USD ($) | |
Subsequent Event [Member] | |
Subsequent Event (Details) [Line Items] | |
Payments to acquire businesses, gross | $ 19.6 |