Magic Software Enterprises(MGIC) - 2024 Q4 - Annual Report

Financial Performance - Revenues for Q4 2024 increased by 13.6% to $142.6 million compared to $125.5 million in Q4 2023[2] - Operating income for Q4 2024 rose by 28.6% to $16.7 million, up from $13.0 million in the same period last year[3] - Net income attributable to shareholders for Q4 2024 increased by 25.2% to $10.6 million, or $0.22 per diluted share, compared to $8.5 million, or $0.17 per diluted share, in Q4 2023[3] - For the full year 2024, revenues increased by 3.3% to $552.5 million compared to $535.1 million in 2023[4] - Net income for 2024 was $43,291,000, a 1.86% increase from $42,502,000 in 2023[30] Cash Flow and Assets - Cash flow from operating activities for the year ended December 31, 2024, amounted to $74.7 million, up from $69.0 million in 2023[9] - As of December 31, 2024, Magic's cash, cash equivalents, and short bank deposits amounted to $112.8 million[9] - Total current assets increased to $276,199 thousand in Q4 2024, compared to $256,625 thousand in Q4 2023[29] - Total assets as of December 31, 2024, were $540,331 thousand, up from $522,406 thousand in 2023[29] - Cash and cash equivalents at the end of the period rose to $112,779,000, compared to $105,943,000 at the beginning of the period[30] Dividends and Shareholder Returns - The board declared a semi-annual cash dividend of 32.7 cents per share, totaling approximately $16.1 million for the second half of 2024[6] - Dividend paid to Magic's shareholders was $10,016,000, down from $30,798,000 in 2023[30] Strategic Initiatives - The company announced a strategic merger with Matrix I.T, which is expected to create a combined entity with a market value of $2.1 billion[11] - The combined entity is projected to operate in approximately 50 countries and serve around 6,000 active clients[12] Guidance and Projections - Magic Software is providing 2025 annual revenue guidance of between $593 million and $603 million, reflecting an annual growth of 7.3% to 9.1% compared to the prior year[9] Expenses and Financial Health - Research and development expenses for Q4 2024 were $3,988 thousand, up from $2,703 thousand in Q4 2023, indicating a focus on innovation[26] - Total equity increased to $301,069 thousand in Q4 2024, compared to $290,944 thousand in Q4 2023, reflecting strong financial health[29] - Non-GAAP net income attributable to Magic's shareholders for the year 2024 was $45,650 thousand, down from $48,405 thousand in 2023[27] Other Financial Metrics - Gross profit for Q4 2024 was $43,219 thousand, representing a gross margin of 30.3%, compared to 30.8% in Q4 2023[28] - Operating income for Q4 2024 increased to $18,753 thousand, with an operating margin of 13.2%, up from 14.1% in Q4 2023[28] - Net income attributable to Magic's shareholders for Q4 2024 was $11,540 thousand, accounting for 8.1% of revenues, compared to 9.2% in Q4 2023[28] - Basic and diluted earnings per share for Q4 2024 were $0.24, unchanged from Q4 2023[28] Changes in Cash Flow Activities - Payments for business acquisitions net of cash acquired totaled $12,507,000, a decrease from $14,244,000 in 2023[30] - Net cash used in investing activities decreased to $22,409,000 from $27,616,000 in the previous year[30] - Repayment of long-term loans from banks and others increased to $33,695,000, compared to $20,994,000 in the previous year[30] - Increase in cash and cash equivalents for the period was $6,836,000, down from $22,881,000 in 2023[30] - Trade receivables saw a decrease of $4,339,000, contrasting with an increase of $18,426,000 in the previous year[30] - Deferred revenues increased to $7,609,000, compared to $3,779,000 in 2023[30]