Matrix IT (MTRX) Q4 2024 earnings summary

Executive summary

• Achieved record results in Q4 and FY 2024, with all-time highs in sales, gross profit, operating profit, net income, EBITDA, and cash flows.

• Double-digit organic growth in sales and operating profit, with over 20% growth in operating profit in Israel.

• Announced a major merger to acquire Magic, creating a top-10 US and fourth-largest European IT services company by market value.

• Growth driven by digital, data, cloud, cyber, and defense segments, with continued M&A activity including Alacer, Ortech, and Gav Systems.

• Maintained growth despite the impact of the war and fewer working hours in Q4 due to holidays.

Financial highlights

• FY 2024 sales up 6.6% to NIS 5.6B, gross profit up 9% to NIS 833M, operating profit up 14.4% to NIS 450M, net income up 16.8% to NIS 288.2M, EBITDA up 6.7% to NIS 637M.

• Q4 2024 sales up 4.1% to NIS 1.37B, gross profit up 7.7% to NIS 219M, operating profit up 18.8% to NIS 120M, net income up 19.5% to NIS 74M, EBITDA up 9% to NIS 169M.

• Cash flow from operating activities reached a record NIS 619M for FY 2024, up 24.8%.

• Net earnings attributable to shareholders grew 19.8% to NIS 272.4M for FY 2024.

• Magic's 2024 revenue: over NIS 2B (55% international), gross profit: NIS 581.4M (28.4% margin), operating profit: NIS 226.5M (11.1% margin), net profit: NIS 160M (7.8% margin).

Outlook and guidance

• Expect continued growth in financial, security, high-tech, transportation, and health sectors, with stability in government, industrial, and retail operations.

• US operations expected to return to growth in 2025, following volatility and new project wins in H2 2024.

• Merger expected to create significant business, technological, and operational synergies, enhancing growth and profitability.

• Mega projects and technological leadership provide strong visibility for maintaining growth rates.

• Plans to explore future dual listing in the US after Magic is delisted from Nasdaq.