Board Change • Jul 30
Less than half of directors are independent Following the recent departure of a director, there are only 2 independent directors on the board. The company's board is composed of: 2 independent directors. 5 non-independent directors. Independent External Director Ilan Regev was the last independent director to join the board, commencing their role in 2026. The company's minority of independent directors is a risk according to the Simply Wall St Risk Model. Aankondiging • Jun 17
Formula Systems (1985) Ltd., Annual General Meeting, Jul 20, 2026 Formula Systems (1985) Ltd., Annual General Meeting, Jul 20, 2026. Location: terminal center, 1 yahadut canada st.,6037501, or yehuda Israel Live-nieuws • May 29
Formula Systems Posts Record Q1 2026 Results and Announces US$13.045 Special Dividend Formula Systems reported record first quarter 2026 results, with revenue up 19.2% year over year.
Net income attributable to shareholders rose 84.5% compared with the same quarter a year earlier.
The company completed a merger of subsidiaries Matrix IT Ltd. and Magic Software Enterprises Ltd., making Magic Software a wholly owned subsidiary, and announced a special cash dividend of US$13.045 per share to be paid in June 2026 based on its 2025 results.
The combination of strong top-line and bottom-line growth alongside the subsidiary merger indicates a period of significant corporate activity that could reshape the group structure and earnings mix over time.
The special dividend is a one-off cash return tied to past results, so it may be useful to separate that from expectations about ongoing capital returns when evaluating the stock. Aankondiging • May 17
Formula Systems (1985) Ltd. Declares Special Cash Dividend for Year 2025, Payable on June 4, 2026 Formula Systems (1985) Ltd. announced that its board of directors has approved the distribution of a special cash dividend, based on Formula’s results for 2025, including, in particular, the completion of the acquisition of Sapiens by Advent, of $13.045 per share, or approximately $200.0 million in total. The dividend will be paid on June 4, 2026 to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on May 25, 2026. The dividend will be paid in U.S dollars both with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and its American Depositary Receipts traded on the Nasdaq Global Select Market. Aankondiging • May 02
Formula Systems (1985) Ltd. announced delayed 20-F filing On 04/30/2026, Formula Systems (1985) Ltd. announced that they will be unable to file their next 20-F by the deadline required by the SEC. New Risk • Apr 22
New major risk - Share price stability The company's share price has been highly volatile over the past 3 months. It is more volatile than 90% of Israeli stocks, typically moving 8.5% a week. This is considered a major risk. Share price volatility increases the risk of potential losses in the short-term as the stock tends to have larger drops in price more frequently than other stocks. It may also indicate the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. Currently, the following risks have been identified for the company: Major Risk Share price has been highly volatile over the past 3 months (8.5% average weekly change). Minor Risk Profit margins are more than 30% lower than last year (1.5% net profit margin). Valuation Update With 7 Day Price Move • Apr 20
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to ₪414, the stock trades at a trailing P/E ratio of 55x. Average trailing P/E is 20x in the IT industry in Israel. Total returns to shareholders of 91% over the past three years. Reported Earnings • Mar 27
Full year 2025 earnings released: EPS: US$2.53 (vs US$5.21 in FY 2024) Full year 2025 results: EPS: US$2.53 (down from US$5.21 in FY 2024). Revenue: US$2.63b (down 4.7% from FY 2024). Net income: US$38.7m (down 52% from FY 2024). Profit margin: 1.5% (down from 2.9% in FY 2024). The decrease in margin was driven by lower revenue. Over the last 3 years on average, earnings per share has fallen by 5% per year but the company’s share price has increased by 17% per year, which means it is well ahead of earnings. Aankondiging • Feb 25
Matrix IT Ltd. (TASE:MTRX) completed the acquisition of Magic Software Enterprises Ltd. (NasdaqGS:MGIC) from Formula Systems (1985) Ltd. (TASE:FORTY) and others. Matrix IT Ltd. (TASE:MTRX) entered into memorandum of understanding to acquire Magic Software Enterprises Ltd. (NasdaqGS:MGIC) from Formula Systems (1985) Ltd. (TASE:FORTY) and others for ILS 2.6 billion on March 10, 2025. The consideration consists of issue of ordinary shares of Matrix IT Ltd. in exchange for Magic Software Enterprises Ltd shares, an aggregate of 28,861,563 ordinary shares of Matrix, representing 0.5878202 Matrix ordinary shares for each one (1) Magic Software Enterprises Ltd ordinary share. Upon completion, Eligible Shareholders of Magic Software Enterprises Ltd are expected to hold, 31.125% of the issued and paid-up share capital of Matrix on a fully diluted basis, and the shareholders of Matrix are expected to hold 68.875% of the issued and paid-up share capital of Matrix on a fully diluted basis. Upon completion of the Merger, Matrix will acquire the entire share capital of Magic on a fully diluted basis by way of a reverse triangular merger, and Magic will become a private wholly-owned of Matrix. On November 3, 2025, Magic Software Enterprises Ltd. entered into a definitive Agreement and Plan of Merger with Matrix IT Ltd.
The transaction is subject to approval by regulatory board / committee, consummation of due diligence investigation, definitive agreement, approval by shareholders of both Matrix and Magic Software and third party approval needed. The deal has been approved by the Magic Software board. Matrix board of directors appointed an independent committee to evaluate the transaction. As of December 10, 2025, the transaction has been approved by the shareholders of Magic Software Enterprises Ltd. As of February 5, 2026, the parties have satisfied the conditions precedent to the closing of the Merger, including the receipt of the Israel Tax Authority tax ruling, except the receipt of the merger certificate from the Israeli Registrar of Companies is still pending.
Value Base M&A Ltd. acted as financial advisor for Magic Software Enterprises Ltd. Gornitzky & Co. acted as legal advisor for Magic Software Enterprises Ltd. Guy Ben Ami, Steven Glusband and Melinda Fellner of Carter Ledyard & Milburn, LLP acted as legal advisor for Magic Software Enterprises Ltd. William Blair & Company, L.L.C. acted as financial advisor for Matrix IT Ltd. Jefferies LLC acted as financial advisor, KPMG acted as an accountant and Herzog Fox & Neeman acted as legal advisor for the independent committee of Matrix IT Ltd. Carter Ledyard & Milburn acted as U.S. securities counsel. Prometheus Financial Advisory acted as fairness opinion provider to Matrix IT Ltd.
Matrix IT Ltd. (TASE:MTRX) completed the acquisition of Magic Software Enterprises Ltd. (NasdaqGS:MGIC) from Formula Systems (1985) Ltd. (TASE:FORTY) and others on February 24, 2026. The transaction has received the merger certificate issued by the Israeli Registrar of Companies. Upon receipt of the Merger Certificate, all Conditions Precedent to completion of the Merger were satisfied. Following the completion of the Merger, the Magic Software Enterprises Ltd.'s ordinary shares will be delisted from trading on the TASE and from NASDAQ, and the Company will be a private company wholly owned by Matrix IT Ltd. New Risk • Feb 11
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Israeli stocks, typically moving 6.0% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. This is currently the only risk that has been identified for the company. Valuation Update With 7 Day Price Move • Feb 05
Investor sentiment deteriorates as stock falls 17% After last week's 17% share price decline to ₪413, the stock trades at a trailing P/E ratio of 27.2x. Average trailing P/E is 23x in the IT industry in Israel. Total returns to shareholders of 62% over the past three years. Upcoming Dividend • Dec 23
Upcoming dividend of ₪1.64 per share Eligible shareholders must have bought the stock before 30 December 2025. Payment date: 13 January 2026. Trailing yield: 1.1%. Lower than top quartile of Israeli dividend payers (5.4%). Lower than average of industry peers (2.2%). Aankondiging • Nov 22
Formula Systems (1985) Ltd. Approves the Distribution of a Cash Dividend Third Quarter of 2025, Payable on January 13, 2025 Formula Systems (1985) Ltd.’s board of directors approved the distribution of a cash dividend in an amount of NIS 1.64 per share (approximately $0.50 per share) and in an aggregate amount of approximately NIS 25.2 million (approximately $7.7 million) for the third quarter of 2025 . The dividend is payable on January 13, 2026, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on December 30, 2025. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Globa l Select Market. Reported Earnings • Nov 22
Third quarter 2025 earnings released: EPS: US$0.76 (vs US$1.54 in 3Q 2024) Third quarter 2025 results: EPS: US$0.76 (down from US$1.54 in 3Q 2024). Revenue: US$696.6m (flat on 3Q 2024). Net income: US$11.6m (down 51% from 3Q 2024). Profit margin: 1.7% (down from 3.4% in 3Q 2024). Over the last 3 years on average, earnings per share has remained flat but the company’s share price has increased by 22% per year, which means it is well ahead of earnings. Upcoming Dividend • Oct 08
Upcoming dividend of ₪1.69 per share Eligible shareholders must have bought the stock before 15 October 2025. Payment date: 28 October 2025. Trailing yield: 1.4%. Lower than top quartile of Israeli dividend payers (5.5%). Lower than average of industry peers (2.6%). Reported Earnings • Aug 19
Second quarter 2025 earnings released: EPS: US$0.98 (vs US$1.23 in 2Q 2024) Second quarter 2025 results: EPS: US$0.98 (down from US$1.23 in 2Q 2024). Revenue: US$743.4m (up 11% from 2Q 2024). Net income: US$15.1m (down 20% from 2Q 2024). Profit margin: 2.0% (down from 2.8% in 2Q 2024). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has fallen by 1% per year but the company’s share price has increased by 9% per year, which means it is well ahead of earnings. Aankondiging • Aug 19
Formula Systems (1985) Ltd. Approves Cash Dividend for Second Quarter of 2025, Payable on October 28, 2025 Formula Systems (1985) Ltd. approved the distribution of a cash dividend in an amount of NIS 1.69 per share (approximately $0.50 per share) and in an aggregate amount of approximately NIS 25.9 million (approximately $7.7 million). The dividend is payable on October 28, 2025, to all of the Company's shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on October 14, 2025. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select
Market. New Risk • Aug 12
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Israeli stocks, typically moving 6.3% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. This is currently the only risk that has been identified for the company. Board Change • Jul 30
Less than half of directors are independent Following the recent departure of a director, there are only 3 independent directors on the board. The company's board is composed of: 3 independent directors. 4 non-independent directors. Independent Director Itay Meroz was the last independent director to join the board, commencing their role in 2024. The company's minority of independent directors is a risk according to the Simply Wall St Risk Model. Aankondiging • May 22
Formula Systems (1985) Ltd. Approves Cash Dividend for First Quarter of 2025, Payable on July 22, 2025 Formula Systems (1985) Ltd. approved the distribution of a cash dividend in an amount of NIS 1.57 per share (approximately $0.44 per share) and in an aggregate amount of approximately NIS 24.1 million (approximately $6.8 million). The dividend is payable on July 22, 2025, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on July 7, 2025. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market. Aankondiging • May 01
Formula Systems (1985) Ltd. announced delayed 20-F filing On 04/30/2025, Formula Systems (1985) Ltd. announced that they will be unable to file their next 20-F by the deadline required by the SEC. Upcoming Dividend • Apr 27
Upcoming dividend of ₪3.45 per share Eligible shareholders must have bought the stock before 04 May 2025. Payment date: 14 May 2025. Trailing yield: 2.0%. Lower than top quartile of Israeli dividend payers (6.4%). Lower than average of industry peers (3.1%). Aankondiging • Apr 23
Formula Systems (1985) Ltd., Annual General Meeting, May 27, 2025 Formula Systems (1985) Ltd., Annual General Meeting, May 27, 2025. Location: terminal center, 1 yahadut canada st., or yehuda 6037501, Israel New Risk • Apr 06
New minor risk - Dividend sustainability The company has an unstable dividend paying track record. The dividend has had an annual drop of over 20% in the past. Dividend yield: 2.3% This is considered a minor risk. If the company has cut or reduced its dividend in the past, it may be a sign that the underlying business is too cyclical to consistently maintain or grow the dividend over the long-term. It may also indicate the company prioritizes other outcomes instead of maintaining the dividend. For dividend paying companies, any reduction in the dividend can significantly impact the share price. This is currently the only risk that has been identified for the company. Reported Earnings • Mar 20
Full year 2024 earnings released: EPS: US$5.21 (vs US$4.18 in FY 2023) Full year 2024 results: EPS: US$5.21 (up from US$4.18 in FY 2023). Revenue: US$2.76b (up 5.2% from FY 2023). Net income: US$79.7m (up 25% from FY 2023). Profit margin: 2.9% (up from 2.4% in FY 2023). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 3% per year whereas the company’s share price has increased by 1% per year. Aankondiging • Mar 20
Formula Systems (1985) Ltd Declares Cash Dividend for the Second Half Ended December 31, 2024, Payable on May 14, 2025 Formula Systems (1985) Ltd.'s board of directors approved the distribution of a cash dividend in an amount of NIS 3.45 per share (approximately $0.94 per share) and in an aggregate amount of approximately NIS 52.9 million (approximately $14.4 million) for the second half ended December 31, 2024. The dividend is payable on May 14, 2025, to all of the Company's shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on April 30, 2025. Aankondiging • Mar 13
Matrix IT Ltd. (TASE:MTRX) entered into MOU to acquire Magic Software Enterprises Ltd. (NasdaqGS:MGIC). Matrix IT Ltd. (TASE:MTRX) entered into MOU to acquire Magic Software Enterprises Ltd. (NasdaqGS:MGIC) on March 10, 2025. The consideration consists of common equity of Matrix IT Ltd. to be issued for common equity of Magic Software Enterprises Ltd. As part of consideration, an undisclosed value is paid towards common equity of Magic Software Enterprises Ltd. Upon completion of the Merger, Matrix will acquire the entire share capital of Magic on a fully diluted basis by way of a reverse triangular merger, and Magic will become a private wholly-owned of Matrix. Magic's shareholders will receive merger consideration in Matrix shares, based on the relative valuations of both Companies presented by the Committees' financial advisors (which were adopted by the Committee, including in its capacity as Magic's Audit Committee, and by Magic’s Board of Directors) and the derived exchange ratio derived of 31.125%/68.875%.
The transaction is subject to approval by regulatory board / committee, consummation of due diligence investigation, definitive agreement and third party approval needed. The deal has been approved by the Magic Software board.
Value Base M&A Ltd. acted as financial advisor for Magic Software Enterprises Ltd. Gornitzky & Co. acted as legal advisor for Magic Software Enterprises Ltd. William Blair & Company, L.L.C acted as financial advisor for Matrix IT Ltd. Reported Earnings • Nov 23
Third quarter 2024 earnings released: EPS: US$1.54 (vs US$1.02 in 3Q 2023) Third quarter 2024 results: EPS: US$1.54 (up from US$1.02 in 3Q 2023). Revenue: US$699.9m (up 6.9% from 3Q 2023). Net income: US$23.6m (up 51% from 3Q 2023). Profit margin: 3.4% (up from 2.4% in 3Q 2023). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 5% per year but the company’s share price has fallen by 5% per year, which means it is significantly lagging earnings. Upcoming Dividend • Sep 05
Upcoming dividend of ₪2.32 per share Eligible shareholders must have bought the stock before 12 September 2024. Payment date: 26 September 2024. Payout ratio is a comfortable 29% and this is well supported by cash flows. Trailing yield: 1.6%. Lower than top quartile of Israeli dividend payers (6.9%). Lower than average of industry peers (3.2%). Reported Earnings • Aug 21
Second quarter 2024 earnings released: EPS: US$1.23 (vs US$1.11 in 2Q 2023) Second quarter 2024 results: EPS: US$1.23 (up from US$1.11 in 2Q 2023). Revenue: US$667.7m (up 1.9% from 2Q 2023). Net income: US$18.8m (up 11% from 2Q 2023). Profit margin: 2.8% (up from 2.6% in 2Q 2023). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 7% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Aankondiging • Aug 20
Formula Systems (1985) Ltd. Approves Cash Dividend for the Six Months Ended June 30, 2024, Payable on September 26, 2024 Formula Systems (1985) Ltd. approved the distribution of a cash dividend in an amount of ILS 2.32 per share (approximately $0.63 per share) and in an aggregate amount of approximately ILS 35.6 million (approximately $9.6 million). The dividend is payable on September 26, 2024, to all of the Company's shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on September 12, 2024. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market. Board Change • Jul 29
Less than half of directors are independent There are 5 new directors who have joined the board in the last 3 years. Of these new board members, 3 were independent directors. The company's board is composed of: 3 independent directors. 4 non-independent directors. Independent Director Itay Meroz was the last independent director to join the board, commencing their role in 2024. The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Lack of board continuity. Aankondiging • Apr 30
Formula Systems (1985) Ltd. announced delayed 20-F filing On 04/29/2024, Formula Systems (1985) Ltd. announced that they will be unable to file their next 20-F by the deadline required by the SEC. Aankondiging • Apr 05
Formula Systems (1985) Ltd., Annual General Meeting, May 09, 2024 Formula Systems (1985) Ltd., Annual General Meeting, May 09, 2024, at 14:00 Israel Standard Time. Location: Terminal Center, 1 Street, Or Yehuda Israel Agenda: To re-elect Mr. Marek Panek to the Company’s board of directors, or the Board, to hold office until company's next annual general meeting of shareholders and until his successor is duly elected and qualified; to re-elect Mr. Rafal Kozlowski to the Board, to hold office until company's next annual general meeting of shareholders and until his successor is duly elected and qualified; to re-elect Mr. Ohad Melnik to the Board, to hold office until company's next annual general meeting of shareholders and until his successor is duly elected and qualified; to re-elect Ms. Gabriela Żukowicz to the Board, to hold office until company's next annual general meeting of shareholders and until her successor is duly elected and qualified; and to consider other matters. Upcoming Dividend • Mar 28
Upcoming dividend of ₪2.30 per share Eligible shareholders must have bought the stock before 04 April 2024. Payment date: 18 April 2024. Trailing yield: 1.5%. Lower than top quartile of Israeli dividend payers (6.8%). Lower than average of industry peers (2.7%). Reported Earnings • Mar 20
Full year 2023 earnings released: EPS: US$4.18 (vs US$5.32 in FY 2022) Full year 2023 results: EPS: US$4.18 (down from US$5.32 in FY 2022). Revenue: US$2.62b (up 1.9% from FY 2022). Net income: US$64.0m (down 21% from FY 2022). Profit margin: 2.4% (down from 3.2% in FY 2022). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 14% per year but the company’s share price has fallen by 1% per year, which means it is significantly lagging earnings. Aankondiging • Mar 20
Formula Systems (1985) Ltd. Approves Dividend for the Second Half of 2023, Payable on April 18, 2024 Formula Systems (1985) Ltd. approved the distribution of a cash dividend in an amount of ILS 2.30 per share (approximately $0.63 per share) and in an aggregate amount of approximately ILS 35.3 million (approximately $10.0 million). The dividend is payable on April 18, 2024, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on April 4, 2024. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market. Reported Earnings • Nov 23
Third quarter 2023 earnings released Third quarter 2023 results: Revenue: US$654.8m (up 4.3% from 3Q 2022). Net income: US$15.6m (down 7.6% from 3Q 2022). Profit margin: 2.4% (down from 2.7% in 3Q 2022). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 23% per year but the company’s share price has fallen by 5% per year, which means it is significantly lagging earnings. Reported Earnings • Aug 18
Second quarter 2023 earnings released: EPS: US$1.11 (vs US$2.15 in 2Q 2022) Second quarter 2023 results: EPS: US$1.11 (down from US$2.15 in 2Q 2022). Revenue: US$655.4m (up 1.7% from 2Q 2022). Net income: US$17.0m (down 48% from 2Q 2022). Profit margin: 2.6% (down from 5.1% in 2Q 2022). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 23% per year but the company’s share price has fallen by 6% per year, which means it is significantly lagging earnings. Buying Opportunity • Jul 24
Now 24% undervalued Over the last 90 days, the stock is up 18%. The fair value is estimated to be ₪351, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 16% over the last 3 years. Earnings per share has grown by 27%. Buying Opportunity • Jun 20
Now 21% undervalued Over the last 90 days, the stock is up 17%. The fair value is estimated to be ₪353, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 16% over the last 3 years. Earnings per share has grown by 27%. Upcoming Dividend • May 29
Upcoming dividend of ₪2.30 per share at 1.8% yield Eligible shareholders must have bought the stock before 05 June 2023. Payment date: 22 June 2023. Payout ratio is a comfortable 26% and this is well supported by cash flows. Trailing yield: 1.8%. Lower than top quartile of Israeli dividend payers (7.2%). Lower than average of industry peers (3.2%). Aankondiging • May 24
Formula Systems (1985) Ltd. Approves Dividend for the Second Half of 2022, Payable on June 22, 2023 Formula Systems (1985) Ltd. announced based on the company's results, the company's board of directors approved the distribution of a cash dividend for the second half of 2022 in an amount of ILS 2.30 per share (approximately $0.63 per share) and in an aggregate amount of approximately ILS 35.3 million (approximately $9.7 million). The dividend is payable on June 22, 2023, to all of the company's shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on June 5, 2023. Reported Earnings • May 24
First quarter 2023 earnings released: EPS: US$1.03 (vs US$1.06 in 1Q 2022) First quarter 2023 results: EPS: US$1.03 (down from US$1.06 in 1Q 2022). Revenue: US$670.4m (up 3.0% from 1Q 2022). Net income: US$15.7m (down 3.4% from 1Q 2022). Profit margin: 2.3% (down from 2.5% in 1Q 2022). Over the last 3 years on average, earnings per share has increased by 27% per year but the company’s share price has fallen by 2% per year, which means it is significantly lagging earnings. Board Change • May 17
Less than half of directors are independent Following the recent departure of a director, there are only 3 independent directors on the board. The company's board is composed of: 3 independent directors. 4 non-independent directors. Independent External Director Tomer Jacob was the last independent director to join the board, commencing their role in 2022. The company's minority of independent directors is a risk according to the Simply Wall St Risk Model. Reported Earnings • Mar 18
Full year 2022 earnings released: EPS: US$5.32 (vs US$3.57 in FY 2021) Full year 2022 results: EPS: US$5.32 (up from US$3.57 in FY 2021). Revenue: US$2.57b (up 7.0% from FY 2021). Net income: US$81.4m (up 49% from FY 2021). Profit margin: 3.2% (up from 2.3% in FY 2021). Over the last 3 years on average, earnings per share has increased by 27% per year but the company’s share price has only increased by 14% per year, which means it is significantly lagging earnings growth. Upcoming Dividend • Nov 28
Upcoming dividend of ₪2.16 per share Eligible shareholders must have bought the stock before 05 December 2022. Payment date: 20 December 2022. Trailing yield: 1.7%. Lower than top quartile of Israeli dividend payers (7.2%). Lower than average of industry peers (4.2%). Reported Earnings • Nov 18
Third quarter 2022 earnings released: EPS: US$1.10 (vs US$0.87 in 3Q 2021) Third quarter 2022 results: EPS: US$1.10 (up from US$0.87 in 3Q 2021). Revenue: US$636.3m (up 8.5% from 3Q 2021). Net income: US$16.9m (up 27% from 3Q 2021). Profit margin: 2.7% (up from 2.3% in 3Q 2021). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 24% per year but the company’s share price has only increased by 4% per year, which means it is significantly lagging earnings growth. Reported Earnings • Aug 18
Second quarter 2022 earnings released: EPS: US$2.15 (vs US$0.87 in 2Q 2021) Second quarter 2022 results: EPS: US$2.15 (up from US$0.87 in 2Q 2021). Revenue: US$644.6m (up 9.6% from 2Q 2021). Net income: US$32.9m (up 147% from 2Q 2021). Profit margin: 5.1% (up from 2.3% in 2Q 2021). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 20% per year but the company’s share price has only increased by 13% per year, which means it is significantly lagging earnings growth. Board Change • Apr 27
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 1 experienced director. 4 highly experienced directors. Independent Director Ohad Melnik was the last director to join the board, commencing their role in 2019. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Upcoming Dividend • Apr 05
Upcoming dividend of ₪2.56 per share Eligible shareholders must have bought the stock before 12 April 2022. Payment date: 26 April 2022. Payout ratio is a comfortable 44% but the company is not cash flow positive. Trailing yield: 1.5%. Lower than top quartile of Israeli dividend payers (5.5%). Lower than average of industry peers (2.4%). Reported Earnings • Mar 17
Full year 2021 earnings: Revenues and EPS in line with analyst expectations Full year 2021 results: EPS: US$3.57 (up from US$3.06 in FY 2020). Revenue: US$2.41b (up 24% from FY 2020). Net income: US$54.6m (up 17% from FY 2020). Profit margin: 2.3% (down from 2.4% in FY 2020). The decrease in margin was driven by higher expenses. Revenue was in line with analyst estimates. Over the last 3 years on average, earnings per share has increased by 15% per year but the company’s share price has increased by 28% per year, which means it is tracking significantly ahead of earnings growth. Board Change • Feb 02
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 1 experienced director. 4 highly experienced directors. Independent Director Ohad Melnik was the last director to join the board, commencing their role in 2019. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Reported Earnings • Nov 19
Third quarter 2021 earnings released: EPS US$0.87 (vs US$0.83 in 3Q 2020) The company reported a solid third quarter result with improved earnings and revenues, although profit margins were weaker. Third quarter 2021 results: Revenue: US$586.3m (up 20% from 3Q 2020). Net income: US$13.3m (up 5.2% from 3Q 2020). Profit margin: 2.3% (down from 2.6% in 3Q 2020). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 17% per year but the company’s share price has increased by 40% per year, which means it is tracking significantly ahead of earnings growth. Upcoming Dividend • Aug 25
Upcoming dividend of ₪2.53 per share Eligible shareholders must have bought the stock before 01 September 2021. Payment date: 22 September 2021. Trailing yield: 1.6%. Lower than top quartile of Israeli dividend payers (5.3%). Lower than average of industry peers (2.2%). Reported Earnings • Aug 22
Second quarter 2021 earnings released: EPS US$0.87 (vs US$0.73 in 2Q 2020) The company reported a solid second quarter result with improved earnings and revenues, although profit margins were weaker. Second quarter 2021 results: Revenue: US$587.9m (up 35% from 2Q 2020). Net income: US$13.3m (up 19% from 2Q 2020). Profit margin: 2.3% (down from 2.6% in 2Q 2020). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 19% per year but the company’s share price has increased by 26% per year, which means it is tracking significantly ahead of earnings growth. Reported Earnings • Mar 18
Full year 2020 earnings released: EPS US$3.06 (vs US$2.56 in FY 2019) The company reported a strong full year result with improved earnings, revenues and profit margins. Full year 2020 results: Revenue: US$1.93b (up 14% from FY 2019). Net income: US$46.8m (up 21% from FY 2019). Profit margin: 2.4% (up from 2.3% in FY 2019). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 30% per year but the company’s share price has increased by 36% per year, which means it is tracking significantly ahead of earnings growth. Valuation Update With 7 Day Price Move • Jan 20
Investor sentiment improved over the past week After last week's 15% share price gain to US$311, the stock is trading at a trailing P/E ratio of 32.6x, up from the previous P/E ratio of 28.3x. This compares to an average P/E of 29x in the IT industry in Israel. Total returns to shareholders over the past three years are 114%. Is New 90 Day High Low • Jan 18
New 90-day high: ₪292 The company is up 1.0% from its price of ₪290 on 20 October 2020. The Israeli market is up 24% over the last 90 days, indicating the company underperformed over that time. It also underperformed the IT industry, which is up 8.0% over the same period.