www.sapiens.com

Investor PresentationQ2 2017 Results

August 7, 2017

Roni Al-Dor, CEO

Roni Giladi, CFO

Yaffa Cohen-Ifrah, CMO

Safe Harbor Statement

Certain statements made in this presentation may be constitute “forward-looking statements” within the meaning of Section

27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private

Securities Litigation Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used to identify

these forward-looking statements (although not all forward-looking statements include such words). These forward-looking

statements, which may include, without limitation, projections regarding our future performance and financial condition, are

made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking

statement is not a guarantee of future performance and actual results could differ materially from those contained in the

forward-looking statement.

These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-

looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment.

New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information

regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors

detailed in Item 3 of Part III of our Annual Report on Form 20-F for the year ended December 31, 2016 and subsequent reports

and registration statements filed from time to time with the Securities and Exchange Commission.

2

Who is Sapiens?

3

Global Footprint*

114 135

158 179

216

2012 2013 2014 2015 2016

Revenue Growth

Non-GAAP revenue (USD M); See appendix for Non-GAAP reconciliation

1982 $216m

~400

~2,500

+17%

Year founded

Customers*

Employees*

15%9

2016 EBITDA(non-GAAP)

EBITDA MarginAcquisitions in 6 years

$32.5m

2016 Revenuesnon-GAAP)

Revenue CAGR2013-2016

*As of June 2017

Development & Delivery Center

Site

Global Presence

North America: 41%United Kingdom: 18%Rest of Europe & SA: 25%Israel: 10%APAC: 6%

We provide core mission-critical solutions to insurance companies

Our Offering – Insurance Software Suites

4

Property & Casualty

Core: Policy administration solutions Core: Policy administration solutions

e App

Illustration

Needs analysis

Underwriting

Agent portal

Business services

DecisionCustomer engagementClient portal BI

Financial & ComplianceReinsurance

Digital Suite

Life & Annuities

Financial & Compliance

Sapiens’ Mission

Help our clients keep pace with the changes ahead and become fully digital

Allow our clients to offer a personalized, omni-channel experience that puts the customer in the center

Enable operational efficiency and agility to accelerate growth

5

The Insurance Markets

66

The Insurance Markets

▪ Highly regulated industry with accelerating regulatory changes

▪ Competitive markets with little product differentiation

▪ Increased globalization▪ Legacy IT transition challenges

Enterprises are seeking modular, next-gen solutions to ease the transition and transform the consumer experience

WealthLiabilityCatastrophe PropertyMotor Voice

PROPERTY, CASUALTY, REINSURANCE

LIFE, ANNUITY, RETIREMENT

Annuities Retirement LifeInjuries

7

The Insurance Industry

Source: Market size data per Celent. April 2016

Big Market

$5,200,000,000,000 gross written premium (GWP)

11,000 insurance companies globally

Potential

3-4% of GWP invested in IT

$185B in 2017 Life - $102B; P&C - $83B

IT-related Investment

8

The Insurance IT Opportunity is Large and Growing

Source: * Source: Market size data per Celent. April 2017 and company analysis

Global IT spending 2017-2018 expected

to increase by

5%

External Software and IT services

spending2017-2018

expected to grow by

8%

Sapiens’ Total Addressable Market

$30B Highly Attractive Growing Market

Highly Attractive Growing Market

9

Today’s Market Challenges & Trends

10

Regulation Competition Risk Mitigation

Customer Experience

Personalization Flexibility

Time to Market EfficiencyNew Distribution

Models

Sapiens Today

1111

Our Value Proposition

Global Presence

End-to-end solutionsLeading technology Domain expertise

Decades of proven project delivery Award-winning, packaged solutions Consultative approach

12

North America

“The ALIS system has a very good user interface. It is simple for the user and flows well...The ALIS system has a graphical policy timeline that is unique and useful for a customer service representative working with a client. Sapiens is releasing new portals,which Celent reviewed, that are among the best we have seen.“ ...”Going forward, we expect the Sapiens ALIS system to makemost evaluation short lists and Sapiens to expand its already rich customer base in the EMEA region.”

Nov. 2015

XCelent Awards - EMEA Policy Administration Systems for Life, Annuities, Pension and Health, 11/2015 13

Leadership in L&A SolutionsBreadth of Functionality, 2015 Breadth of Functionality, 2015

EMEA

Leadership in P&C Solutions

“Sapiens IDIT continues to offer a strong digital policy administration system for insurers globally, with strong experience across Europe…customers commented that Sapiens is responsive, committed, and constructive, and can provide creative solutions.”

Feb. 2016Celent research - EMEA Policy Administration Systems, General Insurance, Property & Casualty February 2016, Craig BeattieCelent research – APAC Policy Administration Platform Property & Casualty, 04/2016, KyongSun Kong 14

Technology and Breath of Functionality, 2015 Technology, 2015

EMEA APAC

Sapiens P&C

Sapiens L&A

Hosting

Product Upgrades

TrainingSupport Services

Migration

TestingConsulting

Project Implementation

End-to-End Solution – Software and Services

15

400 Blue-Chip Global Customers

North America

UK

ContinentalEurope

APAC

Bulgaria

16

Global PresenceExpanded U.S. Presence

17

Development & Delivery Center

Site

OurStrategy

1818

Land and Expand Growth Strategy

19

Win New Customers

Grow with Existing Customers

M & A

Our M&A Strategy

20

Complementary Solutions Growing Customer Base Geographic Expansion

3 core products

2 offshore operations

76 new customers

1 patent

INSECO

Completed 8 M&A

Growth Supported by Focused M&A Strategy

21

22

Recent Acquisition -$80 million dollar Revenues

500 Professionals 200 CustomersGeographic Presence

$80M Revenues

Wide Range of Insurance Products

Domain expertise Customer base Expand U.S presence Core & complementary solutions

Click to edit Master subtitle style

Getting Together in Numbers

23

2,500employees

400customers

15products

25offices

Financials

2424

Revenue – Continue our GrowthNon-GAAP Revenues (USD millions)

1 Revenues of $98.1 M in 2011 pro-forma for the FIS and IDIT acquisitions 25

70.3

114.2

135.4

157.5

179.3

216.2

98.1

2011 2012 2013 2014 2015 2016

(1)

Non-GAAP Revenues (USD millions)

+16.4%

+18.8%

+16.3%

+13.9%

YoY Growth

+20.6%

Annual Revenue by Geography

Non-GAAP Revenues (USD millions)

Focus on North America and Europe

26

35.5

26.622.4 23.6

12.5

44.2

31.1

24.923

12.2

49.6

35

28.4 28.8

15.7

61.3

42.6

26.528.3

20.5

74.5

46.9

35.5

29.1 30.2

NA UK EU Israel APAC

2012 2013 2014 2015 2016

Year 3 Year 4 Year 5 Year 6-10

Contractual High

Attractive Revenue Model

Ongoing Post-ProductionPre-Production

Year 1 Year 2

Go

-Liv

e

Typical life of product engagement: 10–15 years

Revenue ($mm)

Initial Deal Size

Stage

Stickiness

$7 - $10m $8 - $10m $3 - $5m $1 - $1.5m

ReinsuranceL&A P&C Closed Books

27

With Significant VisibilityR

eve

nu

e

≈15%New Customers

≈85% Existing Customers

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

Customer stickiness and layered revenue streams create significant visibility

28

Q2 – Non-GAAP Results

** The Company defines Adjusted EBITDA as net Profit, adjusted for stock-based compensation expense, depreciation and amortization, capitalized internal-use software development costs, amortization of internal-use software development costs interest expense, restructuring and cost reduction cost, provision for income taxes and other income (expenses). 29

Q2

20162017

53.069.2Revenue

22.726.4Gross Profit

42.9%38.2 %

7.43.2Operational Profit

14.0%4.7%

6.21.9Net Income

11.8%2.8%

8.14.2Adjusted EBITDA**

0.130.04Diluted EPS

49,75949,887Diluted Weighted Average Number of Shares

(in USD million, except per share amount)

Strong Cash Flow Generation

$46.4M Cash

$38M Debt

Annual Non-GAAP Operating Cash Flow

Dividend Payments:$9.8m in 2016, $7.2m in 2015 and $6m in 2013

Non-GAAP operating cash flow include the cost of capitalized software development

15.3

11.915.4

34.4

20.5

2012 2013 2014 2015 2016

30

Cash and Debt as of June 30, 2017

2017 Guidance

31

Revenue and Operational Margin GuidanceRevenue Guidance Operational Margin Target

32

216

265

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

2016 2017 Guidance

13.7%13.5%

9%

0

5

10

2016 H2 2017Guidance

2017Guidance

275.0

32

Revenue Guidance Operational Margin Target

14.5%

10.0%

Run rate

-50 bp

Investment Highlights

3333

Financial and Investment Highlights

High growth Recurring revenue model Risk mitigation Global player

34

Massive Market Technology Leader Top-tier customers Proven management

www.sapiens.com

Thank You

Contact: Yaffa Cohen-Ifrah, CMO & Head of Corporate Communications

Mobile: +1-201-250-9414 | Phone: +972-3-7902032Email: IR.sapiens@Sapiens.com | Website: www.sapiens.com

Non-GAAP EBITDA to Adj. EBITDA Reconciliation

1 See definition of Adjusted EBITDA in Q2 2017 press release

36

Quarter ended June 30

20162017

6,407(2,986)GAAP operating profit (loss)

1,2561,235Amortization of capitalized software

4951,727Amortization of other intangible assets

(1,396)(1,850)Capitalization of software development

182617Compensation related to acquisition and acquisition related cost

482456Stock-based compensation

-3,900Restructuring and cost reduction plan

-118Valuation adjustment on acquired deferred revenue and long-term contract

7,4263,217Non-GAAP operating profit

14%4.7%

656962Depreciation

8,0824,179Adjusted EBITDA1

15.2%6.0%

(in USD thousands)

Q4 and Annual – Non-GAAP Results

** The Company defines Adjusted EBITDA as net Profit, adjusted for stock-based compensation expense, depreciation and amortization, capitalized internal-use software development costs, amortization of internal-use software development costs interest expense, provision for income taxes and other income (expenses). 37

AnnualQ4

2015201620152016

179.3216.248.757.1Revenue

78.591.821.523.9Gross Profit

43.8%42.4%44.2%41.8 %

26.529.67.47.5Operational Profit

14.8%13.7%15.1%13.1%

22.124.26.36.0Net Income

12.3%11.2%13.0%10.4%

28.532.57.98.3Adjusted EBITDA**

0.450.490.130.12Diluted EPS

49,32749,78049,53649,935Diluted Weighted Average Number of Shares

Outstanding Shares: 49,036)as of December 31, 2016(

(in USD million, except per share amount)