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Magic Software Enterprises (MGIC) investor relations material

Magic Software Enterprises Q2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2025 earnings summary13 Aug, 2025

Executive summary

  • Achieved record Q2 2025 revenue of $151.6M, up 11.3% year-over-year, with strong demand in cloud, AI, DevOps, and defense sectors; H1 2025 revenue reached $299.0M, up 12.0% year-over-year.

  • Israel operations grew 18.8% year-over-year, with over 90% organic growth; North America revenue increased 6.5% year-over-year and 6% sequentially.

  • Over 270 AI projects managed across 20+ industries, with a 70% success rate, supported by 10+ strategic alliances with global tech leaders.

  • Announced a memorandum of understanding for a potential merger with Matrix, progressing toward a Q4 2025 shareholder vote.

Financial highlights

  • Non-GAAP gross margin was 28.7% ($43.6M), up 20 bps sequentially; GAAP gross margin was 27.9%, down 60 bps year-over-year.

  • Non-GAAP operating income rose 1.9% to $18.6M in Q2; H1 non-GAAP operating income was $37.1M, up 1.9%.

  • Non-GAAP net income attributable to shareholders increased 8.7% to $12.7M ($0.26 per diluted share) in Q2; H1 non-GAAP EPS was $0.51, up 8.5%.

  • Cash and equivalents were $90M as of 6/30/2025, down from $112.8M at year-end; total financial debt was $70M, up from $60M.

  • Cash flow from operations for H1 2025 was $21.2M, down from $41.4M in H1 2024, reflecting increased working capital investment.

Outlook and guidance

  • Full-year 2025 revenue guidance raised to $600M–$610M, representing 8.6%–10.4% anticipated annual growth.

  • Margins expected to improve in the second half as software renewals increase, targeting annual gross margin around 29%.

  • Management expects healthy demand and a strong pipeline to sustain growth through the year.

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Frequently asked questions

Magic Software Enterprises Ltd., publicly traded under the NASDAQ symbol MGIC, specializes in providing a comprehensive suite of software solutions and services. The company focuses on proprietary application development, vertical software solutions, business process integration, and information technologies (IT) outsourcing services, alongside cloud-based services on a global scale. Key offerings include the Magic xpa Application Platform and Magic xpi Integration Platform, designed to support the development, deployment, and integration of business applications. Magic Software also delivers vertical software solutions tailored to specific industries such as healthcare, manufacturing, finance, and retail, enhancing operational efficiency and business process management. The company is headquartered in Or Yehuda, Israel, and its shares are listed on the NASDAQ.

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