IT company Magic revenues grew 29% to about $ 139 million

In contrast to the market trend, the dual IT company Magic, which is controlled by Formula, registers increases on the Tel Aviv Stock Exchange with the publication of the results of the first quarter of the year, in which it overtook analysts' expectations.
Magic's revenue grew 29% to about $ 139 million compared to about $ 107 million in the same quarter last year, and adjusted earnings per share increased by about 26% to 26 cents (about $ 13 million in total). All) compared to 21 cents a share (about $ 10 million in total) in the same quarter last year. The market expected revenue to total about $ 128.8 million and adjusted earnings per share to be 24 cents.
The company updated its forecasts for the current year, and now estimates that it will end with revenues of $ 550-540 million, which will reflect a growth of 12.4% -13.5%. The previous forecast spoke of a range of $ 545-535 million. This is still a significant slowdown in growth compared to 29% growth in 2021.
The company's adjusted operating profit grew by 26% in the first quarter of the year to $ 18.9 million, from $ 15 million in the same quarter last year. Accounting operating profit amounted to $ 15.9 million - an increase of 30.6% compared to the same period last year, and accounting net profit grew by 27.5% to 20 cents per share in full dilution.
Magic reported a decline in the margin of gross profitability and consequently also of the margin of operating profitability. The margin on non-GAAP profitability decreased from 29.6% of revenue in the first quarter of last year to 28.1% in the first quarter of this year, while the margin on operating profit decreased from 14% to 13.6%.
Cash flow from operating activities amounted to approximately $ 11.2 million in the first quarter of the year, compared to approximately $ 15.9 million in the corresponding quarter last year. At the end of the quarter, the total cash - cash value, short-term and long-term deposits and investments in the company's tradable securities - was $ 113.5 million.
Magic develops solutions for the development of internal corporate applications for businesses, and their integration into the corporate environment and the cloud environment. The company, which is managed by CEO Guy Bernstein, identifies a continuing trend of digital transformation for businesses, while talking about continued demand for solutions used for these processes, including Magic itself. The company is traded in Tel Aviv and NASDAQ at a value of $ 756 million. After a decrease of about 27% since the beginning of the year, in accordance with the Nasdaq's performance.