Matrix IT (MTRX) Q2 2024 earnings summary

Executive summary

• Q2 revenue rose 3.6% YoY to NIS 1,332.7m; operating profit increased 13.9% to a record NIS 111.3m and net income rose 16.4% to NIS 73.1m.

• H1 revenue grew 8.1% organically to NIS 2,786.4m; operating profit rose 11.5% to NIS 221.9m and net income increased 12.8% to NIS 144.5m.

• H1 growth reflected higher activity across most segments; training was the exception, while Q2 US IT and cloud sales also declined YoY.

Financial highlights

• Q2 gross profit reached a record NIS 201.8m, up 9.0% YoY; gross margin was 15.1%, versus 14.4%.

• H1 gross profit reached a record NIS 408.9m, up 9.4% YoY; gross margin increased to 14.7% from 14.5%.

• Net income attributable to shareholders rose 18.6% to NIS 69.5m in Q2 and 15.7% to NIS 138.1m in H1.

• Basic and diluted EPS were NIS 1.09 in Q2, versus NIS 0.92; H1 EPS was NIS 2.17, versus NIS 1.88.

• Adjusted EBITDA, net of IFRS 16, was NIS 124.5m in Q2, up 8.5%, and NIS 249.3m in H1, up 8.1%.

Outlook and guidance

• New US customer engagements are expected to contribute to activity and earnings in coming quarters after two large GRC projects ended.

• Several M&A deals were planned for 2024 to accelerate growth and expand customer offerings.

• Mega-project visibility, technology leadership, reputation and financial strength support continued growth and investment amid economic, political and security challenges.