Matrix IT (MTRX) Q4 2024 earnings summary

Executive summary

• Achieved record results in Q4 and FY 2024, with all-time highs in sales, gross profit, operating profit, net income, EBITDA, and cash flows, including record sales of NIS 5,579.5 million, up 6.6% year-over-year, and organic growth of 10% when adjusted.

• Double-digit organic growth in sales and operating profit, with over 20% growth in operating profit in Israel.

• Growth driven by digital, data, cloud, cyber, and defense segments, with continued M&A activity including Alacer, Ortech, and Gav Systems.

• Maintained growth despite the impact of the war and fewer working hours in Q4 due to holidays.

• Workforce totaled 11,570 employees at year-end.

Financial highlights

• FY 2024 sales up 6.6% to NIS 5.6B (10% adjusted), gross profit up 9% to NIS 833M, operating profit up 14.4% to NIS 450M, net income up 16.8% to NIS 288.2M, EBITDA up 6.7% to NIS 637M.

• Q4 2024 sales up 4.1% to NIS 1.37B (10.2% adjusted), gross profit up 7.7% to NIS 219M, operating profit up 18.8% to NIS 120M, net income up 19.5% to NIS 74M, EBITDA up 9% to NIS 169M.

• Cash flow from operating activities reached a record NIS 619M for FY 2024, up 24.8%.

• Net earnings attributable to shareholders grew 19.8% to NIS 272.4M for FY 2024.

• EPS (diluted) was NIS 4.29, compared to NIS 3.58 in 2023.

Outlook and guidance

• Expect continued growth in financial, security, high-tech, transportation, and health sectors, with stability in government, industrial, and retail operations.

• US operations expected to return to growth in 2025, following volatility and new project wins in H2 2024.

• Management expects continued organic growth in Israel and the US, with a focus on expanding cloud, AI, cybersecurity, and managed services.

• Strategic emphasis on recurring revenues, cloud migration, and international expansion, especially in the US.

• Mega projects and technological leadership provide strong visibility for maintaining growth rates.