Matrix IT (MTRX) Q3 2024 earnings summary

Executive summary

• Achieved double-digit organic growth and record sales and profits in Q3 and the first nine months of 2024, led by core Israeli IT, consulting, and management segments, despite war impacts and reserve duty for hundreds of employees.

• Maintained market leadership in Israel for 19 years, with a broad customer base and extensive US operations.

• Secured significant new US contracts, especially with large banks, expected to boost revenue and profit from early 2025.

• Completed a strategic US GRC advisory acquisition in November 2024, expanding presence in the American financial sector.

• Continued focus on M&A to support accelerated growth and enhance customer value.

Financial highlights

• Q3 2024 sales grew 6.4% year-over-year to NIS 1.42 billion; nine months sales up 7.5% to NIS 4.21 billion.

• Gross profit rose 9.6% to NIS 205 million in Q3, with margin improving to 14.5%.

• Operating profit increased 16% to NIS 108.2 million in Q3; margin up to 7.6%.

• Net income up 22.8% in Q3 to NIS 69.7 million and 15.8% for nine months to NIS 214.2 million.

• Adjusted EBITDA (excl. IFRS 16) up 11.2% in Q3 to NIS 122.1 million; nine months up 9.1% to NIS 371.4 million.

Outlook and guidance

• Expects new US contracts to drive revenue and profit growth from early 2025.

• Management anticipates continued growth but notes significant risks from ongoing regional conflict and macroeconomic instability.

• Plans to complete several M&A transactions by year-end to support future growth.

• No interest rate reductions expected in Israel before year-end due to inflation and war-related spending.