Israeli IT firm Magic Software's Q2 revenue growth beats estimates on US client strength
Overview
Magic Software Q2 2025 rev grows 11.3% yr/yr, beating analyst expectations
Adjusted EPS for Q2 2025 beats consensus, reflecting operational strength
Co revises full-year 2025 revenue guidance upwards, indicating confidence in growth
Outlook
Magic revises full-year 2025 revenue guidance to $600 mln-$610 mln
Company anticipates annual revenue growth of 8.6% to 10.4%
Magic sees strong demand for digital and AI solutions
Company expects continued U.S. growth driven by recent agreements
Result Drivers
STRONG DEMAND - Magic Software attributes revenue growth to robust demand for digital, AI, and cloud transformation solutions
DEFENSE SECTOR - Continued strong demand for services in the defense sector contributed to revenue growth
U.S. GROWTH - Approximately 9% year-over-year revenue growth in the U.S. driven by agreements executed in late 2024 and early 2025
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Adjusted Revenue | Beat | $151.60 mln | $145.90 mln (1 Analyst) |
Q2 Adjusted EPS | Beat | $0.26 | $0.25 (1 Analyst) |
Q2 EPS |
| $0.2 |
|
Q2 Adjusted Net Income | Miss | $12.70 mln | $14.80 mln (1 Analyst) |
Q2 Adjusted Operating Income | Miss | $18.60 mln | $19.80 mln (1 Analyst) |
Q2 Adjusted Gross Margin |
| 28.7% |
|
Q2 Adjusted Operating Margin |
| 12.2% |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
Wall Street's median 12-month price target for Magic Software Enterprises Ltd is $16.00, about 17.5% below its August 12 closing price of $18.80
The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 13 three months ago
Press Release: ID:nGNX37GlSg
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