Sapiens announces second quarter 2005 results

Significant reduction in losses despite decline in revenues

August 11, 2005

Research Triangle Park, N.C. — August 11, 2005 — Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS) announced today its unaudited financial results for the second quarter ended June 30, 2005.

For the quarter, the company recorded revenues of $9.6 million compared with $10.1 million in the first quarter of 2005, a decrease of 5.0%. Gross profit increased to $3.8 million from $3.5 million, with gross profit margins increasing to 39.9% from 34.6% in the previous quarter. The Company reduced its operating loss to$1.3 million from $2.3 million in the first quarter, an improvement of 43.5%. Net loss for the second quarter was reduced to $1.7 million, compared with a net loss of $2.6 million in the first quarter of 2005, an improvement of 34.6%.

Itzick Sharir, President and Chief Executive Officer of Sapiens, commented: "Though we report a decline in our overall revenues, it relates primarily to our traditional line of business, where long term projects have been successfully implemented and, as a result, we face reduced revenue streams. On the other hand, we are glad to announce that there was an increase in revenue this quarter from our customers in the insurance industry, our strategic focus.

"We are also glad to report that we have increased our gross profit and gross profit margin and have significantly reduced both our operating and net losses. Most importantly, we were able to achieve positive operational cash-flow for the quarter.

"We continue to make progress in penetrating the global insurance marketplace and hope we will soon announce several important wins."

Click here to download Sapiens Q2 05 Results

Q4 and 2004 CONFERENCE CALL:
Sapiens’ management will host a teleconference at 8:45 a.m. EST on August 11, 2005, to discuss the results and the company's outlook.

Please call the following dial-in numbers to participate:

United States 1-866-860-9642
United Kingdom 0-800-917-5108
International +972-3-918-0600
Israel 03-918-0600

Please call 10 minutes prior to the start time

FOR ADDITIONAL INFORMATION:
Elior Brin
Chief Financial Officer
Sapiens International
Tel: +972-8-938-2934
E-mail: IR.Sapiens@sapiens.com

Itzick Sharir
Chief Executive Officer
Sapiens International
Tel: +972-8-938-2934
E-mail: IR.Sapiens@sapiens.com

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, the United Kingdom, EMEA and Asia Pacific, and has partnerships with market leaders such as IBM and EDS. Sapiens' clients include AXA, Liverpool Victoria, Norwich Union, OneBeacon, Principal Financial Group, Prudential, Abbey National, ING, and Occidental Fire & Casualty 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.