Formula Systems Reports Financial Results for the Third Quarter and First Nine Months Period Ended September 30, 2024

Financial Performance - Revenues for the third quarter ended September 30, 2024 increased by 6.9% to a record-breaking $699.9 million, compared to $654.8 million in the same period last year [2] - Operating income for the third quarter increased by 21.9% to $71.0 million, which includes a capital gain of $6.5 million from the IPO of TSG IT Advanced Systems Ltd [3] - Net income attributable to Formula's shareholders for the third quarter increased by 51.4% to $23.6 million, or $1.51 per fully diluted share, compared to $15.6 million, or $1.00 per fully diluted share, in the same period last year [4] Nine-Month Performance - Revenues for the nine-month period ended September 30, 2024 increased by 4.3% to $2.07 billion, compared to $1.98 billion in the same period last year [5] - Operating income for the nine-month period increased by 11% to $198.7 million, compared to $179.0 million in the same period last year [5] - Net income attributable to Formula's shareholders for the nine-month period increased by 23.4% to $59.6 million, or $3.81 per fully diluted share, compared to $48.3 million, or $3.10 per fully diluted share, in the same period last year [6] Financial Position - As of September 30, 2024, consolidated cash and cash equivalents and short-term bank deposits totaled approximately $510.9 million, compared to $528.2 million as of December 31, 2023 [8] - Total equity as of September 30, 2024 was $1.36 billion, representing 47.8% of the total consolidated statements of financial position, compared to $1.31 billion, representing 46.5% as of December 31, 2023 [8] Compliance and Covenants - As of September 30, 2024, Formula was in compliance with all financial covenants under the debenture series issued, including a target equity attributable to shareholders above $325 million, with actual equity at $660.1 million [9][10] - The actual ratio of net financial indebtedness to net capitalization was 0.18%, well below the target of 65% [11] - The actual ratio of net financial indebtedness to EBITDA was 0.006, significantly below the target of 5 [12][13] Management Commentary - The CEO expressed pride in the strong performance, highlighting a 21.9% year-over-year increase in operating income and a commitment to sustained growth and operational excellence [14] - Matrix IT Ltd. reported record-breaking results across all key financial indices, with revenues for the third quarter reaching NIS 1.42 billion (approximately $381.9 million), a 6.4% year-over-year increase [14] - Sapiens International Corporation reported revenues of $137 million for the third quarter, reflecting a 4.8% increase compared to the same period last year [14] - Magic Software achieved a 10.4% year-over-year increase in revenues, reaching $143 million, and revised its annual revenue guidance for 2024 upwards [15]