Sapiens reports reduced net loss for the quarter

August 6, 2004

RESEARCH TRIANGLE PARK - Sapiens International Corporation N.V. today announced its unaudited results of operations for the second quarter ended June 30, 2004. Compared to the first quarter of 2004, revenues decreased from $12.6 million to $11.8 million. Gross profit was $5.2 million compared with $5.7 million in the first quarter, and gross profit margin was 44.0% compared with 45.7% in the first quarter. The Company reported an operating loss of $0.3 million in each of the first and second quarters of 2004, and a net loss of $1.1 million in the second quarter of 2004 compared with a loss of $1.3 million in the previous quarter.

Itzick Sharir, President and Chief Executive Officer of Sapiens, commented:

"As expected, the results of the second quarter still reflect the delays Sapiens is experiencing in penetrating the insurance industry. However, despite lower revenues, we have effectively succeeded in reducing our losses as a result of cost cutting measures taken. In addition, our positive operating cash flow further increased to $1.5 million, reflecting our customers' satisfaction and improved collection. We have signed new orders amounting to approximately $12 million, thus keeping our backlog stable.

"We expect to report further improvements in the third quarter of 2004 and continue to believe that we can return to profitability as soon as the fourth quarter of 2004 as a result of growing revenues and further cost cutting.

"Our pipeline for insurance applications continues to develop in all our territories, in both the life & pension and property & casualty sectors. We believe we are close to signing more new orders in the near future."

About Sapiens International
Sapiens International Corporation (NASDAQ and TASE: SPNS), a member of Formula Group (NASDAQ: FORTY and TASE: FORT), is a leading global provider of proven IT solutions that modernize business processes and enable insurance organizations to adapt quickly to change. Sapiens' innovative solutions are widely recognized for their ability to cost-effectively align IT with the business demands for speed, flexibility and efficiency. Sapiens operates through its subsidiaries in North America, EMEA and Asia Pacific and has partnerships with market leaders such as IBM and EDS. Sapiens' clients include Abbey National, AXA, ING, Liverpool Victoria, Norwich Union, Occidental Fire & Casualty, OneBeacon, Principal Financial and Prudential among others. For more information, please visit http://www.sapiens.com.

Except for historical information contained herein, the matters set forth in this release are forward-looking statements that are dependent on certain risks and uncertainties, including such factors, among others, as market acceptance, market demand, pricing, changing regulatory environment, changing economic conditions, risks in new product and service development, the effect of the Company's accounting policies and other risk factors detailed in the Company's SEC filings.

Contacts

French/West/Vaughan
Melissa Holton, 919-277-1154
E-mail: mholton@fwv-us.com
or
Sapiens International
Chief Financial Officer
Yuval Hadari, +1-877-554-2426 or +972-8-938-2721
E-mail: yuval.h@sapiens.com