Matrix IT (MTRX) Q1 2025 earnings summary

Executive summary

• Q1 2025 set records for revenue, gross profit, operating profit, net profit and EBITDA; revenue reached NIS 1,546.2m.

• Operating profit rose 13.8% YoY; excluding first-time consolidation of Gav Systems, Ortech and Alacer, organic operating-profit growth was 9.5%.

• Growth reflected stronger Israeli IT and cloud infrastructure activity, operational efficiency and acquired businesses; the US IT segment contracted.

Financial highlights

• Revenue rose 6.4% YoY to NIS 1,546.2m; growth was 11.3% adjusted for increased net-basis revenue.

• Gross profit increased 9.6% to NIS 227.1m; operating income rose 13.8% to NIS 126.0m.

• Net income grew 12.8% to NIS 80.6m; net income attributable to shareholders rose 10.1% to NIS 75.6m, with diluted EPS of NIS 1.19 versus NIS 1.09.

• EBITDA increased 11.5% to NIS 175.6m; SG&A was NIS 101.1m versus NIS 96.5m YoY.

Outlook and guidance

• New US customer engagements and higher orders are expected to support increased segment sales and profits in coming quarters; annual US operating income is targeted at ~USD 20m.

• Multi-year IT and engineering projects provide high visibility; growth is attributed mainly to organic expansion and acquisitions in Israel.

• The proposed Matrix–Magic merger is targeted to close in Q4 2025, subject to required regulatory approvals; completion is expected to expand global reach, especially in the US.

• A proposed high-performance computing data center, if awarded, would support large-scale AI model training; project budget exceeds NIS 250m, including a potential NIS 160m government grant.