Chris Reimer • Barclays

Answer

CFO Asaf Berenstin noted an expected recuperation in U.S. demand after a stagnant period. He attributed margin pressure to the timing of software license renewals, which are concentrated in Q4 2025, and a revenue mix shift towards lower-margin professional services. He anticipates margins will improve and level out around 29% annually. CTO Yuval Lavi added that cloud adoption is increasing among both new and legacy customers.

Ask Fintool Equity Research AI

Answer

Asaf Berenstin (executive) clarified that the positive U.S. momentum is from existing customers, with an increase in deal flow after several stagnant quarters signaling a positive trend for the second half of the year. Regarding margins, Berenstin explained the dip was due to the timing of high-margin software license renewals, which are heavily weighted towards Q3 and Q4 in 2025, unlike in 2024. He anticipates gross margins will improve to over 29% as the year progresses.

Ask Fintool Equity Research AI

Answer

Asaf Berenstin, an executive at Magic Software, attributed the confident guidance to a strong Q4 finish, a growing backlog, robust performance in cloud services and the defense sector, and expected revenue from new AI consulting deals. Regarding expenses, Berenstin noted that payroll costs have been stable but may face upward pressure as the Israeli market recovers, expressing confidence in the company's ability to maintain operational margins.

Ask Fintool Equity Research AI

Answer

CFO Yaniv Arieli described the recent record NPU licensing as a pivotal moment for the business, adding to a strong portfolio that includes growing royalties from Cellular IoT and Wi-Fi 6. CEO Amir Panush provided shipment color, stating that he expects strong sequential growth in the second half for both the smartphone segment (driven by market share gains) and the industrial segment. He also noted that consumer IoT continues to perform very well, with strong ramps in Wi-Fi 6 and Cellular IoT expected to continue.

Ask Fintool Equity Research AI

Answer

CFO Yaniv Arieli explained the lower gross margin is due to temporarily allocating R&D costs to cost of revenue for a strategic 5G advanced customer, a project lasting from a few quarters to a year. CEO Amir Panush added this customization work builds valuable IP. Regarding the outlook, both executives clarified that the guidance reduction reflects proactive conservatism due to the Q1 revenue miss and macro uncertainty, rather than specific weakness in other business areas.

Ask Fintool Equity Research AI

Answer

CFO Yaniv Arieli clarified that the Q4 deals were for off-the-shelf technologies and did not include customization. He explained that the slight gross margin pressure guided for Q1 2025 is a residual effect from a large mobile deal signed in Q3 2024, compounded by seasonal royalty weakness. CEO Amir Panush specified that the two AI-related deals consisted of one for the NeuPro NPU and another for a DSP targeted at AI applications.

Ask Fintool Equity Research AI

Answer

CEO Amir Panush clarified that deal counts can fluctuate quarterly and CEVA prioritizes the quality and strategic value of deals over sheer quantity, noting the annual pace remains on track. He stated that the licensing pipeline is the strongest he has seen since early 2023 and that the robust backlog was a key factor in the decision to raise full-year guidance, reflecting strong business momentum.

Ask Fintool Equity Research AI

Answer

Roy Zisapel, Co-Founder, CEO, President & Director, explained that while carriers are not significantly increasing overall investment, there are growing opportunities to partner on their MSSP businesses using Radware's cloud solutions. Regarding the U.S. enterprise market, he characterized it as stable, with ongoing budget scrutiny and long sales cycles, but noted that Radware is successfully navigating this by increasing its pipeline and focusing on critical AI and cloud security needs.

Ask Fintool Equity Research AI

Answer

CFO Guy Avidan and CEO Roy Zisapel clarified that subscription revenue was 47% for the quarter and 46% year-to-date. Zisapel attributed the strong EMEA results to a healthy, diversified business mix, including strong cloud deals, excellent execution with OEM partners like Cisco and Check Point, and significant on-premise deals with carriers and governments.

Ask Fintool Equity Research AI

Answer

Co-CEO Eyal Sheratzky clarified that with the Stellantis deal, Stellantis is the direct customer, and end-users receive a free trial, which results in lower churn. He explained the ARPU is lower because it's a service-only contract without hardware, but this structure yields higher margins. Sheratzky also noted the opportunity to renew these subscribers at higher, direct-to-consumer rates post-trial. Executive VP & CFO Eli Kamer added that product revenue gross margins are expected to be around 20-25% going forward, though this can be volatile depending on the product mix.

Ask Fintool Equity Research AI

Answer

Executive Eyal Sheratzky explained that providing a precise OEM versus retail subscriber breakdown is difficult due to service overlaps, but confirmed that retail still constitutes the major portion of growth, with OEM business being additive. He noted that OEM contracts have lower margins. Regarding new products, Sheratzky stated that while initiatives like UBI and motorcycle solutions are gaining traction, their individual revenue contributions are not yet significant compared to the large, traditional Stolen Vehicle Recovery (SVR) business.

Ask Fintool Equity Research AI

Answer

Executive Eyal Sheratzky confirmed that there is no material seasonality for the company as a whole, thanks to its diversification across geographies and business segments. He explained that the motorcycle insurance product is gaining traction by addressing a high-risk segment. In Israel, it helps owners reduce theft risk, while in Brazil, it enables insurance companies to manage risk better, leading to a growing customer base.

Ask Fintool Equity Research AI

Answer

CFO Lauri Hanover stated that the company remains vigilant in seeking operational efficiencies across all processes and expenses. CEO Ronen Samuel added that the most important driver for profitability is impression growth. He highlighted initiatives like the "Connections" event, designed to connect demand generators with Kornit's fulfillment network, citing the new Gooten partnership as a direct result of these efforts.

Ask Fintool Equity Research AI

Answer

CEO Ronen Samuel clarified that the Atlas MAX on AIC is designed for customers with lower volumes than Apollo, targeting an annual revenue of around $300,000 per machine. He confirmed strong momentum and a healthy funnel for the offering. Regarding gross margin, he stated that the long-term target is 55%, driven by a richer mix of high-margin consumables, improved service margins, and increased system sales volume over time.

Ask Fintool Equity Research AI

Answer

CEO Roni Al-Dor explained that revenue is expected to see a gradual increase in Q2, followed by a more significant jump in Q3 and Q4, with Q4 being slightly higher than Q3. This progression is dependent on the closing dates of the AdvantageGo and Candela acquisitions. He identified the main drivers for the outlook as continued organic growth, a currency tailwind, and the impact of the recent M&A activities.

Ask Fintool Equity Research AI

Answer

CFO Roni Giladi confirmed that M&A remains a key part of Sapiens' growth strategy. He explained that high valuations were a past obstacle but the market is now more reasonable. Mr. Giladi highlighted that the company was a final bidder in a recent European deal but withdrew due to price, demonstrating their active engagement. He stated a goal to complete at least one acquisition by the end of 2025, leveraging their available cash.

Ask Fintool Equity Research AI

Answer

Chief Strategy Officer Alex Zuckerman confirmed continued high interest in core replacement, driven by carriers' need for operational efficiency, which is now enhanced by AI, data, and cloud capabilities. He noted that while the sales cycle for large transformations remains in the 12-24 month range, customer due diligence can sometimes take longer as they evaluate Sapiens' more comprehensive turnkey platform offering, which includes core, digital, data, and AI components.

Ask Fintool Equity Research AI