Matrix IT (MTRX) Q4 2023 earnings summary

Executive summary

• FY2023 revenue rose 12% to NIS 5.232B and operating profit rose 12.2% to NIS 393.4M, despite war-related disruption and the Infinity sale.

• Q4 revenue grew 8.4% to NIS 1.321B and operating profit grew 7.4% to NIS 101M; reserve-duty costs and war impacts constrained growth.

• FY2023 order backlog increased 19% to NIS 6.884B, supporting visibility for multi-year projects.

Financial highlights

• FY2023 gross profit rose 13.7% to NIS 764.2M; net profit was NIS 246.9M, up ~6% excluding the 2022 capital gain.

• FY2023 adjusted EBITDA, excluding IFRS 16 effects and the Infinity investment gain, rose 12.9% to NIS 459M; Q4 adjusted EBITDA rose 9.5% to NIS 119M.

• Q4 net income rose 16.3% to NIS 61.9M; net income attributable to shareholders rose 12.8% to NIS 57M.

• Q4 gross profit rose 11% to NIS 203M, with gross margin at 15.4%.

• FY2023 operating cash flow rose 28.1% to NIS 496M; year-end equity was NIS 1.1B, versus NIS 964.8M in 2022.

Outlook and guidance

• Growth priorities include financial-sector digital, data, cyber, cloud and core banking work; defense projects and software procurement; and expanding US engagements with large banks.

• Government Nimbus migration, multi-year mega-projects, cloud infrastructure, software distribution and engineering projects are identified as growth engines.

• Further M&A at reasonable prices is part of the growth strategy; management expects limited further war-related business impact and continued hiring, with ~800 open advanced-technology positions.