The following is a summary of the Magic Software Enterprises Ltd. (MGIC) Q4 2024 Earnings Call Transcript:

Financial Performance:

• Magic Software reported a revenue increase in Q4 2024 to $142.6 million, up 13.6% from the same period last year.

• Non-GAAP gross margin for the fourth quarter reached 30.3% with non-GAAP operating income increasing by 6.1% to $18.8 million.

• Net income attributable to non-controlling interest increased, while net income attributable to Magic shareholders decreased slightly by 0.5% to $11.5 million or $0.24 per share.

Business Progress:

• Magic Software announced a significant merger with Matrix IT, which will result in Magic becoming a private entity, wholly owned by Matrix, leading to delisting from NASDAQ and trading exclusively on the Tel Aviv Stock Exchange.

• The merger aims to create a global IT powerhouse by leveraging cross-selling opportunities and combining service portfolios, enhancing market position especially in the US and Israeli markets.

Opportunities:

• The merger with Matrix is expected to enhance Magic's market position and capabilities, providing opportunities for geographic and service expansion.

• Cross-selling opportunities with Matrix's extensive product portfolio are expected to drive Magic's revenue and broaden client engagement.

Risks:

• The process of the merger will continue into the third quarter, requiring careful management to maintain business continuity and stakeholder value.

• As the merged entity will trade exclusively on the Tel Aviv Stock Exchange, Magic will face challenges in adapting to a new market environment and possibly re-engaging with NASDAQ in the future.

More details: Magic Software Enterprises IR

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