Matrix IT (MTRX) Q1 2026 earnings summary

Executive summary

• Completed merger with Magic Software in February 2026, integrating business units and consolidating results retroactively using the pooling-of-interests method, enhancing global operations and increasing overseas profit share.

• Issued ₪297 million in convertible bonds in February 2026, mainly to refinance Magic's higher-cost debt.

• Acquired Savannah Solutions Ltd. (75%) and Martin Control Systems (100%) to expand international and automation capabilities.

• Now employs 17,000 globally, including 3,500 abroad and 2,500 in the US.

• No material impact from the "Iron Swords" conflict, despite 330 employees serving in active reserve duty as of March 31, 2026.

Financial highlights

• Q1 2026 revenue grew 2.4% year-over-year to ₪2.128 billion (₪2.13 billion); constant currency growth was 8.9%.

• Gross profit rose 2.4% to ₪382.7 million (18% margin).

• Operating profit increased 11% to ₪203 million (9.5% margin); constant currency growth was 18%.

• Net profit up 9.2% to ₪136.8 million (6.4% margin); constant currency growth was 19.4%.

• EBITDA up 5.6% to ₪265.7 million (12.5% margin).

Outlook and guidance

• FY2025 revenue guidance: ₪8.4 billion; EBITDA: ₪1 billion.

• Management expects continued growth, with positive trends in Israel's economy post-conflict, but notes risks from renewed hostilities and exchange rate volatility.

• Positioned as a leading global cloud player, with over $400 million in annual cloud infrastructure and services sales.

• AI adoption and global expansion expected to drive further growth.