EX-99.5 6 ea026353901ex99-5_magic.htm FINANCIAL STATEMENTS OF MATRIX IT AS OF JUNE 30, 2025

Exhibit 99.5

Review Report of the Independent Auditor to the Shareholders of Matrix IT Ltd. | 3
Consolidated Statements of Financial Position | 4
Consolidated Statements of Profit and Loss and Other Comprehensive Income | 6
Consolidated Statements of Changes in Equity Unaudited | 7
Consolidated Statements of Cash Flows | 12
Notes to the Interim Consolidated Financial Statements | 15

To

The Shareholders of

Matrix IT Ltd.

Ladies and gentlemen,

Review Report of the Independent Auditor to the Shareholders of Matrix IT Ltd.

Introduction

We have reviewed the accompanying interim financial information of Matrix IT Ltd. and its subsidiaries (the “Group”), that includes the condensed interim consolidated statement of financial position as at June 30, 2025, and the related condensed interim consolidated statements of profit and loss and other comprehensive income, changes in equity, and cash flows for the six and three month periods then ended. The Board of Directors and management are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 “Interim Financial Reporting” and they are also responsible for the preparation of this interim financial information in accordance with Chapter D of Securities Regulations (Periodic and Immediate Reports) - 1970. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel “Review of Interim Financial Information Performed by the Auditor of the Entity.” A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially smaller in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the abovementioned financial information is not prepared, in all material respects, in accordance with IAS 34.

In addition to the statements in the previous paragraph, based on our review, nothing has come to our attention that causes us to believe that the abovementioned financial information does not comply, in all material respects, with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports) - 1970.

Tel Aviv, Israel |  | Zif Haft
August 11, 2025 |  | Certified Public Accountants (Isr.) - BDO Member Firm

Interim Consolidated Financial Statements 3

Matrix IT Ltd.

Consolidated Statements of Financial Position

(NIS thousands)

|  | As at June 30, |  |  | As at June 30, |  |  | As at December 31, |
|  | 2025 |  |  | 2024 |  |  | 2024 |
|  | Unaudited |  |  | Unaudited |  |  | Audited |
Current assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  | 547,753 |  |  |  | 498,400 |  |  |  | 668,495 |
Trade receivables and unbilled receivables, net |  |  | 1,876,794 |  |  |  | 1,666,154 |  |  |  | 1,926,190 |
Income tax receivable |  |  | 33,917 |  |  |  | 43,362 |  |  |  | 53,567 |
Other accounts receivable |  |  | 152,864 |  |  |  | 138,349 |  |  |  | 122,273 |
Inventories |  |  | 151,127 |  |  |  | 107,220 |  |  |  | 101,861 |
|  |  | 2,762,455 |  |  |  | 2,453,485 |  |  |  | 2,872,386 |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |
Investment in a financial asset measured at fair value through profit and loss |  |  | 14,512 |  |  |  | 17,146 |  |  |  | 17,146 |
Prepaid expenses |  |  | 55,565 |  |  |  | 41,225 |  |  |  | 30,203 |
Right-of-use assets |  |  | 378,615 |  |  |  | 215,918 |  |  |  | 369,935 |
Property, plant, and equipment |  |  | 101,022 |  |  |  | 93,396 |  |  |  | 101,616 |
Goodwill |  |  | 993,995 |  |  |  | 926,199 |  |  |  | 955,988 |
Intangible assets |  |  | 96,933 |  |  |  | 87,524 |  |  |  | 89,893 |
Deferred taxes |  |  | 52,019 |  |  |  | *44,830 |  |  |  | 42,469 |
|  |  | 1,692,661 |  |  |  | 1,426,238 |  |  |  | 1,607,250 |
|  |  | 4,455,116 |  |  |  | 3,879,723 |  |  |  | 4,479,636 |

| * | Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 4

Matrix IT Ltd.

Consolidated Statements of Financial Position

(NIS thousands)

|  | As at June 30, |  |  | As at June 30, |  |  | As at December 31, |
|  | 2025 |  |  | 2024 |  |  | 2024 |
|  | Unaudited |  |  | Unaudited |  |  | Audited |
Current liabilities |  |  |  |  |  |  |  |  |
Credit from banks and other credit providers |  |  | 389,443 |  |  |  | 442,813 |  |  |  | 388,640 |
Current maturities of debentures |  |  | 79,955 |  |  |  | 82,698 |  |  |  | 81,341 |
Current maturities of lease liabilities |  |  | 117,648 |  |  |  | 105,678 |  |  |  | 115,574 |
Trade payables |  |  | 831,976 |  |  |  | 580,187 |  |  |  | 926,753 |
Income tax payable |  |  | 6,908 |  |  |  | 11,759 |  |  |  | 21,063 |
Other accounts payable |  |  | 104,555 |  |  |  | 98,485 |  |  |  | 133,631 |
Employees and payroll accruals |  |  | 480,338 |  |  |  | 438,931 |  |  |  | 510,995 |
Liabilities in respect of business combinations |  |  | 7,383 |  |  |  | 469 |  |  |  | 10,244 |
Put options for non-controlling interests |  |  | 88,026 |  |  |  | 79,272 |  |  |  | 82,308 |
Deferred revenues |  |  | 424,058 |  |  |  | 326,721 |  |  |  | 382,119 |
|  |  | 2,530,290 |  |  |  | 2,167,013 |  |  |  | 2,652,668 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Loans from banks and other lenders |  |  | 66,751 |  |  |  | 42,611 |  |  |  | 19,671 |
Debentures |  |  | 262,705 |  |  |  | 327,917 |  |  |  | 295,427 |
Deferred revenues |  |  | 56,218 |  |  |  | 64,194 |  |  |  | 45,667 |
Put options for non-controlling interests |  |  | 62,984 |  |  |  | 25,991 |  |  |  | 24,764 |
Lease liabilities |  |  | 272,292 |  |  |  | 111,057 |  |  |  | 257,235 |
Deferred taxes |  |  | 29,453 |  |  |  | *25,013 |  |  |  | 23,871 |
Liabilities in respect of business combinations |  |  | 9,448 |  |  |  | - |  |  |  | 8,371 |
Employee benefit liabilities |  |  | 11,948 |  |  |  | 8,005 |  |  |  | 7,635 |
|  |  | 771,799 |  |  |  | 604,788 |  |  |  | 682,641 |
Equity attributable to Company shareholders |  |  |  |  |  |  |  |  |  |  |  |
Share capital and capital reserves |  |  | 345,039 |  |  |  | 384,663 |  |  |  | 380,099 |
Retained earnings |  |  | 750,131 |  |  |  | 673,924 |  |  |  | 708,634 |
|  |  | 1,095,170 |  |  |  | 1,058,587 |  |  |  | 1,088,733 |
Non-controlling interests |  |  | 57,857 |  |  |  | 49,335 |  |  |  | 55,594 |
Total equity |  |  | 1,153,027 |  |  |  | 1,107,922 |  |  |  | 1,144,327 |
|  |  | 4,455,116 |  |  |  | 3,879,723 |  |  |  | 4,479,636 |

| * | Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

The accompanying notes constitute an integral part of the interim consolidated financial statements.

August 11, 2025 |  |  |  |  |  |
Date of approval of the financial statements |  | Guy Bernstein Chair of the Board of Directors |  | Moti Gutman CEO |  | Nevo Brenner CFO

Interim Consolidated Financial Statements 5

Matrix IT Ltd.

Consolidated Statements of Profit and Loss and Other Comprehensive Income - (NIS thousands)

|  | For the six months ended June 30, |  |  | For the six months ended June 30, |  |  | For the three months ended June 30, |  |  | For the three months ended June 30, |  |  | For the year ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |  |  | 2024 |
|  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Audited |
Revenues |  |  | 2,997,579 |  |  |  | 2,786,445 |  |  |  | 1,451,379 |  |  |  | 1,332,732 |  |  |  | 5,579,538 |
Cost of sales and services |  |  | 2,547,822 |  |  |  | 2,377,516 |  |  |  | 1,228,682 |  |  |  | 1,130,946 |  |  |  | 4,746,544 |
Gross profit |  |  | 449,757 |  |  |  | 408,929 |  |  |  | 222,697 |  |  |  | 201,786 |  |  |  | 832,994 |
Selling and marketing expenses |  |  | 104,893 |  |  |  | 97,663 |  |  |  | 50,052 |  |  |  | 46,615 |  |  |  | 196,231 |
General and administrative expenses |  |  | 92,154 |  |  |  | 89,333 |  |  |  | 45,926 |  |  |  | 43,916 |  |  |  | 186,689 |
Operating income |  |  | 252,710 |  |  |  | 221,933 |  |  |  | 126,719 |  |  |  | 111,255 |  |  |  | 450,074 |
Financial expenses |  |  | 55,369 |  |  |  | 42,388 |  |  |  | 30,071 |  |  |  | 20,898 |  |  |  | 86,956 |
Financial income |  |  | 10,609 |  |  |  | 10,969 |  |  |  | 4,689 |  |  |  | 6,065 |  |  |  | 20,084 |
Income before taxes on income |  |  | 207,950 |  |  |  | 190,514 |  |  |  | 101,337 |  |  |  | 96,422 |  |  |  | 383,202 |
Taxes on income |  |  | 51,084 |  |  |  | 45,991 |  |  |  | 25,054 |  |  |  | 23,321 |  |  |  | 94,978 |
Net income |  |  | 156,866 |  |  |  | 144,523 |  |  |  | 76,283 |  |  |  | 73,101 |  |  |  | 288,224 |
Other comprehensive income (net of tax effects) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amounts that will not be subsequently reclassified to profit or loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain from remeasurement of defined benefit plans |  |  | 1,789 |  |  |  | 1,928 |  |  |  | 454 |  |  |  | 1,138 |  |  |  | 2,722 |
Amounts that will be, or that have been, reclassified to profit or loss if specific conditions are met |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustments for translation of financial statements |  |  | (23,934 | ) |  |  | 11,894 |  |  |  | (30,474 | ) |  |  | 7,065 |  |  |  | (1,140 | )
Change in fair value of instruments used in cash flow hedging |  |  | (1,729 | ) |  |  | (195 | ) |  |  | (1,450 | ) |  |  | (272 | ) |  |  | (4 | )
Total comprehensive income |  |  | 132,992 |  |  |  | 158,150 |  |  |  | 44,813 |  |  |  | 81,032 |  |  |  | 289,802 |
Net earnings attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company shareholders |  |  | 148,497 |  |  |  | 138,141 |  |  |  | 72,918 |  |  |  | 69,495 |  |  |  | 272,422 |
Non-controlling interests |  |  | 8,369 |  |  |  | 6,382 |  |  |  | 3,365 |  |  |  | 3,606 |  |  |  | 15,802 |
|  |  | 156,866 |  |  |  | 144,523 |  |  |  | 76,283 |  |  |  | 73,101 |  |  |  | 288,224 |
Total comprehensive income attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company shareholders |  |  | 124,923 |  |  |  | 151,616 |  |  |  | 41,777 |  |  |  | 77,570 |  |  |  | 273,804 |
Non-controlling interests |  |  | 8,069 |  |  |  | 6,534 |  |  |  | 3,036 |  |  |  | 3,462 |  |  |  | 15,998 |
|  |  | 132,992 |  |  |  | 158,150 |  |  |  | 44,813 |  |  |  | 81,032 |  |  |  | 289,802 |
Net earnings per share attributable to the Company’s shareholders (NIS) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic net income |  |  | 2.34 |  |  |  | 2.17 |  |  |  | 1.15 |  |  |  | 1.09 |  |  |  | 4.29 |
Diluted net income |  |  | 2.33 |  |  |  | 2.17 |  |  |  | 1.14 |  |  |  | 1.09 |  |  |  | 4.29 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 6

Matrix IT Ltd.

Consolidated Statements of Changes in Equity
Unaudited (NIS thousands)

|  | Share capital |  |  | Share premium |  |  | Treasury shares |  |  | Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge |  |  | Reserve for transactions between a corporation and a controlling shareholder |  |  | Reserve for share-based payment and transactions with non- controlling interests |  |  | Retained earnings |  |  | Total attributable to Company shareholders |  |  | Non- controlling interests |  |  | Total Equity |
Balance at January 1, 2025 (audited) |  |  | 68,255 |  |  |  | 309,447 |  |  |  | (7,982 | ) |  |  | (9,675 | ) |  |  | 10,186 |  |  |  | 9,868 |  |  |  | 708,634 |  |  |  | 1,088,733 |  |  |  | 55,594 |  |  |  | 1,144,327 |
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 497,148 |  |  |  | 148,497 |  |  |  | 8,369 |  |  |  | 156,866 |
Adjustments for translation of financial statements of foreign operations and cash flow hedge |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (25,363 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (25,363 | ) |  |  | (300 | ) |  |  | (25,663 | )
Actuarial gain from remeasurement of defined benefit plans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,789 |  |  |  | 1,789 |  |  |  | - |  |  |  | 1,789 |
Total other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (25,363 | ) |  |  | - |  |  |  | - |  |  |  | 1,789 |  |  |  | (23,574 | ) |  |  | (300 | ) |  |  | (23,874 | )
Total comprehensive income |  |  | - |  |  |  |  |  |  |  | - |  |  |  | (25,363 | ) |  |  | - |  |  |  | - |  |  |  | 150,286 |  |  |  | 124,923 |  |  |  | 8,069 |  |  |  | 132,992 |
Exercise of employee options |  |  | 254 |  |  |  | 18,188 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (18,442 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Dividend declared |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (108,789 | ) |  |  | (108,789 | ) |  |  | - |  |  |  | (108,789 | )
Dividend to non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,806 | ) |  |  | (5,806 | )
Transactions with non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (14,103 | ) |  |  | - |  |  |  | (14,103 | ) |  |  | - |  |  |  | (14,103 | )
Share-based payment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,406 |  |  |  | - |  |  |  | 4,406 |  |  |  | - |  |  |  | 4,406 |
Balance at June 30, 2025 |  |  | 68,509 |  |  |  | 327,635 |  |  |  | (7,982 | ) |  |  | (35,038 | ) |  |  | 10,186 |  |  |  | (18,271 | ) |  |  | 750,131 |  |  |  | 1,095,170 |  |  |  | 57,857 |  |  |  | 1,153,027 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 7

Matrix IT Ltd.

Consolidated Statements of Changes in Equity
Unaudited (NIS thousands)

|  | Share capital |  |  | Share premium |  |  | Treasury shares |  |  | Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge |  |  | Reserve for transactions between a corporation and a controlling shareholder |  |  | Reserve for share-based payment and transactions with non- controlling interests |  |  | Retained earnings |  |  | Total attributable to Company shareholders |  |  | Non- controlling interests |  |  | Total Equity |
Balance as at January 1, 2024 (audited) |  |  | 68,255 |  |  |  | 309,447 |  |  |  | (7,982 | ) |  |  | (8,335 | ) |  |  | 10,186 |  |  |  | 11,035 |  |  |  | 665,981 |  |  |  | 1,048,587 |  |  |  | 58,885 |  |  |  | 1,107,472 |
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 138,141 |  |  |  | 138,141 |  |  |  | 6,382 |  |  |  | 144,523 |
Adjustments for translation of financial statements of foreign operations and cash flow hedge |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,547 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,547 |  |  |  | 152 |  |  |  | 11,699 |
Actuarial gain from remeasurement of defined benefit plans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,928 |  |  |  | 1,928 |  |  |  | - |  |  |  | 1,928 |
Total other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,547 |  |  |  | - |  |  |  | - |  |  |  | 1,928 |  |  |  | 13,475 |  |  |  | 152 |  |  |  | 13,627 |
Total comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,547 |  |  |  | - |  |  |  | - |  |  |  | 140,069 |  |  |  | 151,616 |  |  |  | 6,534 |  |  |  | 158,150 |
Dividend declared |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (132,126 | ) |  |  | (132,126 | ) |  |  | - |  |  |  | (132,126 | )
Dividend to non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (8,672 | ) |  |  | (8,672 | )
Transactions with non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (18,487 | ) |  |  | - |  |  |  | (18,487 | ) |  |  | (7,412 | ) |  |  | (25,899 | )
Share-based payment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8,997 |  |  |  | - |  |  |  | 8,997 |  |  |  | - |  |  |  | 8,997 |
Balance at June 30, 2024 |  |  | 68,255 |  |  |  | 309,447 |  |  |  | (7,982 | ) |  |  | 3,212 |  |  |  | 10,186 |  |  |  | 1,545 |  |  |  | 673,924 |  |  |  | 1,058,587 |  |  |  | 49,335 |  |  |  | 1,107,922 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 8

Matrix IT Ltd.

Consolidated Statements of Changes in Equity
Unaudited (NIS thousands)

|  | Share capital |  |  | Share premium |  |  | Treasury shares |  |  | Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge |  |  | Reserve for transactions between a corporation and a controlling shareholder |  |  | Reserve for share-based payment and transactions with non- controlling interests |  |  | Retained earnings |  |  | Total attributable to Company shareholders |  |  | Non- controlling interests |  |  | Total Equity |
Balance at April 1, 2025 |  |  | 68,494 |  |  |  | 326,638 |  |  |  | (7,982 | ) |  |  | (3,443 | ) |  |  | 10,186 |  |  |  | (18,644 | ) |  |  | 733,387 |  |  |  | 1,108,636 |  |  |  | 60,627 |  |  |  | 1,169,263 |
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 72,918 |  |  |  | 72,918 |  |  |  | 3,365 |  |  |  | 76,283 |
Adjustments for translation of financial statements of foreign operations and cash flow hedge |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (31,595 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (31,595 | ) |  |  | (329 | ) |  |  | (31,924 | )
Actuarial gain from remeasurement of defined benefit plans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 454 |  |  |  | 454 |  |  |  | - |  |  |  | 454 |
Total other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (31,595 | ) |  |  | - |  |  |  | - |  |  |  | 454 |  |  |  | (31,141 | ) |  |  | (329 | ) |  |  | (31,470 | )
Total comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (31,595 | ) |  |  | - |  |  |  | - |  |  |  | 73,372 |  |  |  | 41,777 |  |  |  | 3,036 |  |  |  | 44,813 |
Exercise of employee options |  |  | 15 |  |  |  | 997 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,012 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Dividend declared |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (56,628 | ) |  |  |  |  |  |  |  |  |  |  |  |
Dividend to non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,806 | ) |  |  | (5,806 | )
Share-based payment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,385 |  |  |  | - |  |  |  | 1,385 |  |  |  | - |  |  |  | 1,385 |
Balance at June 30, 2025 |  |  | 68,509 |  |  |  | 327,635 |  |  |  | (7,982 | ) |  |  | (35,038 | ) |  |  | 10,186 |  |  |  | (18,271 | ) |  |  | 750,131 |  |  |  | 1,095,170 |  |  |  | 57,857 |  |  |  | 1,153,027 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 9

Matrix IT Ltd.

Consolidated Statements of Changes in Equity
Unaudited (NIS Thousands)

|  | Share capital |  |  | Share premium |  |  | Treasury shares |  |  | Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge |  |  | Reserve for transactions between a corporation and a controlling shareholder |  |  | Reserve for adjustments arising from translation of financial statements of foreign operations and cashflow hedge |  |  | Retained earnings |  |  | Total attributable to Company shareholders |  |  | Non- controlling interests |  |  | Total Equity |
Balance at April 1, 2024 |  |  | 68,255 |  |  |  | 309,447 |  |  |  | (7,982 | ) |  |  | (3,725 | ) |  |  | 10,186 |  |  |  | (1,572 | ) |  |  | 654,744 |  |  |  | 1,029,353 |  |  |  | 54,057 |  |  |  | 1,083,410 |
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 69,495 |  |  |  | 69,495 |  |  |  | 3,606 |  |  |  | 73,101 |
Adjustments for translation of financial statements of foreign operations and cash flow hedge |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,937 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,937 |  |  |  | (144 | ) |  |  | 6,793 |
Actuarial gain from remeasurement of defined benefit plans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,138 |  |  |  | 1,138 |  |  |  | - |  |  |  | 1,138 |
Total other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,937 |  |  |  | - |  |  |  | - |  |  |  | 1,138 |  |  |  | 8,075 |  |  |  | (144 | ) |  |  | 7,931 |
Total comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,937 |  |  |  | - |  |  |  | - |  |  |  | 70,633 |  |  |  | 77,570 |  |  |  | 3,462 |  |  |  | 81,032 |
Transactions with non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,392 | ) |  |  | - |  |  |  | (1,392 | ) |  |  | (1,608 | ) |  |  | (3,000 | )
Dividend declared |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (51,453 | ) |  |  | (51,453 | ) |  |  | - |  |  |  | (51,453 | )
Dividend to non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6,576 | ) |  |  | (6,576 | )
Share-based payment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,509 |  |  |  | - |  |  |  | 4,509 |  |  |  | - |  |  |  | 4,509 |
Balance at June 30, 2024 |  |  | 68,255 |  |  |  | 309,447 |  |  |  | (7,982 | ) |  |  | 3,212 |  |  |  | 10,186 |  |  |  | 1,545 |  |  |  | 673,924 |  |  |  | 1,058,587 |  |  |  | 49,335 |  |  |  | 1,107,922 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 10

Matrix IT Ltd.

Consolidated Statements of Changes in Equity
Unaudited (NIS thousands)

|  | Share capital |  |  | Share premium |  |  | Treasury shares |  |  | Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge |  |  | Reserve for transactions between a corporation and a controlling shareholder |  |  | Reserve for share-based payment and transactions with non- controlling interests |  |  | Retained earnings |  |  | Total attributable to Company shareholders |  |  | Non- controlling interests |  |  | Total equity |
Balance at January 1, 2024 |  |  | 68,255 |  |  |  | 309,447 |  |  |  | (7,982 | ) |  |  | (8,335 | ) |  |  | 10,186 |  |  |  | 11,035 |  |  |  | 665,981 |  |  |  | 1,048,587 |  |  |  | 58,885 |  |  |  | 1,107,472 |
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 272,422 |  |  |  | 272,422 |  |  |  | 15,802 |  |  |  | 288,224 |
Adjustments for translation of financial statements of foreign operations and cash flow hedge |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,340 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,340 | ) |  |  | 196 |  |  |  | (1,144 | )
Actuarial gain from remeasurement of defined benefit plans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,722 |  |  |  | 2,722 |  |  |  | - |  |  |  | 2,722 |
Total other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,340 | ) |  |  | - |  |  |  | - |  |  |  | 2,722 |  |  |  | 1,382 |  |  |  | 196 |  |  |  | 1,578 |
Total comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,340 | ) |  |  | - |  |  |  | - |  |  |  | 275,144 |  |  |  | 273,804 |  |  |  | 15,998 |  |  |  | 289,802 |
Non-controlling interests in a company that was consolidated for the first time |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 950 |  |  |  | 950 |
Dividend declared |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (232,491 | ) |  |  | (232,491 | ) |  |  | - |  |  |  | (232,491 | )
Dividend to non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (13,133 | ) |  |  | (13,133 | )
Transactions with non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (19,193 | ) |  |  | - |  |  |  | (19,193 | ) |  |  | (7,106 | ) |  |  | (26,299 | )
Share-based payment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 18,026 |  |  |  | - |  |  |  | 18,026 |  |  |  | - |  |  |  | 18,026 |
Balance at December 31, 2024 |  |  | 68,255 |  |  |  | 309,447 |  |  |  | (7,982 | ) |  |  | (9,675 | ) |  |  | 10,186 |  |  |  | 9,868 |  |  |  | 708,634 |  |  |  | 1,088,733 |  |  |  | 55,594 |  |  |  | 1,144,327 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 11

Matrix IT Ltd.

Consolidated Statements of Cash Flows
(NIS thousands)

|  | For the six months ended June 30, |  |  | For the six months ended June 30, |  |  | For the three months ended June 30, |  |  | For the three months ended June 30, |  |  | For the year ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |  |  | 2024 |
|  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Audited |
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  |  | 156,866 |  |  |  | 144,523 |  |  |  | 76,283 |  |  |  | 73,101 |  |  |  | 288,224 |
Adjustments required to reconcile net income to net cash (used in) provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustments to profit and loss items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 98,946 |  |  |  | 90,538 |  |  |  | 49,348 |  |  |  | 43,732 |  |  |  | 186,811 |
Taxes on income |  |  | 51,084 |  |  |  | 45,991 |  |  |  | 25,054 |  |  |  | 23,321 |  |  |  | 94,978 |
Change in liabilities for employee benefits |  |  | 4,224 |  |  |  | 1,404 |  |  |  | 1,088 |  |  |  | 909 |  |  |  | 1,553 |
Other financial expenses, net |  |  | 27,398 |  |  |  | 11,199 |  |  |  | 17,715 |  |  |  | 4,993 |  |  |  | 27,619 |
Revaluation of long-term bank loans |  |  | 670 |  |  |  | (205 | ) |  |  | (134 | ) |  |  | (97 | ) |  |  | (392 | )
Revaluation of liabilities in respect of business combinations |  |  | 1,634 |  |  |  | (2,741 | ) |  |  | 785 |  |  |  | (2,741 | ) |  |  | (1,741 | )
Capital gain from disposal of property, plant, and equipment |  |  | (596 | ) |  |  | (248 | ) |  |  | (93 | ) |  |  | (196 | ) |  |  | (301 | )
Share-based payment |  |  | 4,406 |  |  |  | 8,997 |  |  |  | 1,385 |  |  |  | 4,509 |  |  |  | 18,026 |
Revaluation of liabilities for put options for non-controlling interests |  |  | 7,430 |  |  |  | 6,017 |  |  |  | 3,473 |  |  |  | 3,905 |  |  |  | 15,321 |
|  |  | 195,196 |  |  |  | 160,952 |  |  |  | 98,621 |  |  |  | 78,335 |  |  |  | 341,874 |
Changes in assets and liabilities items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase (decrease) in trade receivables |  |  | 121,144 |  |  |  | 16,250 |  |  |  | 127,403 |  |  |  | 63,923 |  |  |  | (245,505 | )
Decrease (increase) in other receivables and prepaid expenses |  |  | (58,052 | ) |  |  | (44,427 | ) |  |  | 35,326 |  |  |  | (8,112 | ) |  |  | (15,712 | )
Decrease (increase) in inventories |  |  | (47,865 | ) |  |  | 38,869 |  |  |  | (61,810 | ) |  |  | 12,972 |  |  |  | 44,413 |
Increase (decrease) in trade payables |  |  | (124,505 | ) |  |  | (207,343 | ) |  |  | (50,144 | ) |  |  | (75,628 | ) |  |  | 140,568 |
Increase (decrease) in employees and institutions, deferred revenues, and other accounts payable |  |  | (42,299 | ) |  |  | 47,099 |  |  |  | (66,436 | ) |  |  | (35,418 | ) |  |  | 188,813 |
|  |  | (151,577 | ) |  |  | (149,552 | ) |  |  | (15,661 | ) |  |  | (42,263 | ) |  |  | 112,577 |
Cash paid and received over the course of the period for |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest paid |  |  | (25,099 | ) |  |  | (26,207 | ) |  |  | (6,592 | ) |  |  | (8,926 | ) |  |  | (49,375 | )
Interest received |  |  | 10,609 |  |  |  | 10,969 |  |  |  | 4,689 |  |  |  | 6,065 |  |  |  | 20,084 |
Taxes paid |  |  | (69,015 | ) |  |  | (71,722 | ) |  |  | (39,237 | ) |  |  | (27,568 | ) |  |  | (124,758 | )
Taxes received |  |  | 20,154 |  |  |  | 24,850 |  |  |  | 4,358 |  |  |  | 16,892 |  |  |  | 30,595 |
|  |  | (63,351 | ) |  |  | (62,110 | ) |  |  | (36,782 | ) |  |  | (13,537 | ) |  |  | (123,454 | )
Net cash provided by operating activities |  |  | 137,134 |  |  |  | 93,813 |  |  |  | 122,461 |  |  |  | 95,636 |  |  |  | 619,221 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 12

Matrix IT Ltd.

Consolidated Statements of Cash Flows
(NIS thousands)

|  | For the six months ended June 30, |  |  | For the six months ended June 30, |  |  | For the three months ended June 30, |  |  | For the three months ended June 30, |  |  | For the year ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |  |  | 2024 |
|  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Audited |
Cash flows from investment activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sale of property, plant, and equipment |  |  | 1,140 |  |  |  | 1,559 |  |  |  | 173 |  |  |  | 582 |  |  |  | 1,936 |
Acquisition of property, plant, and equipment |  |  | (15,711 | ) |  |  | (15,811 | ) |  |  | (5,733 | ) |  |  | (6,227 | ) |  |  | (41,541 | )
Acquisition of subsidiaries consolidated for the first time (a) |  |  | (65,362 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (17,321 | )
Net cash from used in investment activities |  |  | (79,933 | ) |  |  | (14,252 | ) |  |  | (5,560 | ) |  |  | (5,645 | ) |  |  | (56,926 | )
Cash flows from financial activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term credit from banks and other credit providers, net |  |  | - |  |  |  | 63,234 |  |  |  | (11,021 | ) |  |  | 22,594 |  |  |  | (24,019 | )
Receipt from the issuing of commercial securities (NAAM) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 100,000 |
Repayment of long-term loans from banks and credit providers |  |  | (77,566 | ) |  |  | (89,329 | ) |  |  | (44,898 | ) |  |  | (44,707 | ) |  |  | (179,003 | )
Dividend distribution |  |  | (100,438 | ) |  |  | (80,673 | ) |  |  | (52,161 | ) |  |  | (80,673 | ) |  |  | (184,214 | )
Payment in respect of long-term loans from banks and credit providers |  |  | 120,000 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Repayment of liabilities in respect of business combinations |  |  | (3,418 | ) |  |  | (561 | ) |  |  | (1,686 | ) |  |  | (561 | ) |  |  | (11,561 | )
Repayment of lease liabilities |  |  | (58,583 | ) |  |  | (64,354 | ) |  |  | (31,244 | ) |  |  | (32,842 | ) |  |  | (129,435 | )
Dividend distribution to non-controlling interests |  |  | (7,835 | ) |  |  | (18,838 | ) |  |  | (7,292 | ) |  |  | (16,742 | ) |  |  | (30,271 | )
Repayment of liabilities for put options to non-controlling interests |  |  | - |  |  |  | (1,124 | ) |  |  | - |  |  |  | (1,124 | ) |  |  | (1,124 | )
Acquisition of non-controlling interests |  |  | - |  |  |  | (3,499 | ) |  |  | - |  |  |  | (3,000 | ) |  |  | (3,899 | )
Repayment of debentures |  |  | (33,959 | ) |  |  | (33,959 | ) |  |  | - |  |  |  | - |  |  |  | (67,918 | )
Net cash used in financial activities |  |  | (161,799 | ) |  |  | (229,103 | ) |  |  | (148,302 | ) |  |  | (157,055 | ) |  |  | (531,444 | )
Translation differences for cash and cash equivalent balances |  |  | (16,144 | ) |  |  | 7,734 |  |  |  | (20,819 | ) |  |  | 4,631 |  |  |  | (2,564 | )
Increase (decrease) in cash and cash equivalents |  |  | (120,742 | ) |  |  | (141,808 | ) |  |  | (52,220 | ) |  |  | (62,433 | ) |  |  | 28,287 |
Balance of cash and cash equivalents at the beginning of the period |  |  | 668,495 |  |  |  | 640,208 |  |  |  | 599,973 |  |  |  | 560,833 |  |  |  | 640,208 |
Balance of cash and cash equivalents at end of the period |  |  | 547,753 |  |  |  | 498,400 |  |  |  | 547,753 |  |  |  | 498,400 |  |  |  | 668,495 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 13

Matrix IT Ltd.

Consolidated Statements of Cash Flows
(NIS thousands)

|  |  | For the six months ended June 30, |  |  | For the six months ended June 30, |  |  | For the three months ended June 30, |  |  | For the three months ended June 30, |  |  | For the year ended December 31, |
|  |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |  |  | 2024 |
|  |  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Unaudited |  |  | Audited |
(a) | Acquisition of subsidiaries consolidated for the first time |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| The subsidiaries’ assets and liabilities at date of acquisition: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Working capital (other than cash and cash equivalents) |  |  | (11,991 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 663 |
| Property, plant, and equipment |  |  | (1,322 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (270 | )
| Income tax receivable |  |  | (3,255 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
| Deferred tax |  |  | (3,289 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (155 | )
| Inventories |  |  | (1,401 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (185 | )
| Goodwill |  |  | (55,537 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (36,038 | )
| Intangible assets |  |  | (21,666 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (13,656 | )
| Employee benefit liabilities |  |  | 2,414 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
| Provision for tax |  |  | 4,983 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,224 |
| Liabilities for options to holders of non-controlling interests |  |  | 25,702 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
| Non-controlling interests |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 950 |
| Liabilities in respect of business combinations |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 28,146 |
|  |  |  | (65,362 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (17,321 | )
(b) | Significant non-cash transactions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Distribution of dividend declared and not yet paid |  |  | 56,628 |  |  |  | 51,453 |  |  |  | 56,628 |  |  |  | 51,453 |  |  |  | 48,277 |
| Right-of-use asset recognized with corresponding lease liability |  |  | 76,164 |  |  |  | 65,143 |  |  |  | 24,003 |  |  |  | 18,767 |  |  |  | 286,695 |
| Issuing call options to non-controlling interests |  |  | - |  |  |  | 22,400 |  |  |  | - |  |  |  | - |  |  |  | 22,400 |

The accompanying notes constitute an integral part of the interim consolidated financial statements.

Interim Consolidated Financial Statements 14

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 1 | General

| A. | Matrix IT Ltd. (the “Company”) was incorporated in Israel on September 12, 1989, and started its business operations on that day. The Company provides advanced IT services.

| B. | These financial statements have been prepared in condensed format as at June 30, 2025, and for the six and three month periods then ended (the “Consolidated Interim Financial Statements”). The condensed consolidated financial statements of the Group as at June 30, 2025 include those of the Company and its subsidiaries (the “Group”) and the Group’s interests in associates and joint arrangements. The financial statements should be read in the context of the Company’s annual financial statements as at December 31, 2024, and for the year then ended and their accompanying notes (the “Consolidated Annual Financial Statements”).

| C. | The Company is a direct subsidiary of Formula Systems (1985) Ltd. (“Formula Systems”), which is controlled by Asseco Poland SA.

| D. | The Company’s shares are listed on the Tel Aviv Stock Exchange.

| Note 2 | Significant Accounting Policies

| A. | -Preparation format of the Consolidated Interim Financial Statements

The Consolidated Interim Financial Statements have been prepared in accordance with IAS 34, Interim Financial Reporting, and in accordance with the disclosure requirements of Chapter D of the Israel Securities Regulations (Periodic and Immediate Reports), 1970. The accounting policy applied in the preparation of the Consolidated Interim Financial Statements is consistent with that applied in the preparation of the Consolidated Annual Financial Statements.

| B. | Below is information about changes in the CPI and relevant exchange rates

|  | As at 30.06.25 |  |  | As at 30.06.24 |  |  | As at 31.12.24 |
Consumer price index (2020 basis) |  |  |  |  |  |  |  |  |
Israel (index basis) |  |  | 117.3 |  |  |  | 113.5 |  |  |  | 114.8 |
In Israel (known index) |  |  | 102.8 |  |  |  | 113.4 |  |  |  | 115.11 |
NIS exchange rate |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | 3.37 |  |  |  | 3.76 |  |  |  | 3.65 |
EUR |  |  | 3.96 |  |  |  | 4.02 |  |  |  | 3.80 |

Interim Consolidated Financial Statements 15

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 2 | Significant Accounting Policies (cont.)

| B. | Below is information about changes in the CPI and relevant exchange rates (cont.)

|  | For the six months ended 30.06.25 |  |  | For the six months ended 30.06.24 |  |  | For the three months ended 30.06.25 |  |  | For the three months ended 30.06.24 |  |  | For the year ended 31.12.24 |
Consumer price index (2020 basis) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Israel (index basis) |  |  | 2.14 | % |  |  | 2.07 | % |  |  | 1.08 | % |  |  | 1.13 | % |  |  | 3.24 | %
In Israel (known index) |  |  | 1.57 | % |  |  | 1.89 | % |  |  | 1.28 | % |  |  | 1.61 | % |  |  | 3.43 | %
NIS exchange rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | (7.54 | )% |  |  | 3.64 | % |  |  | (9.31 | )% |  |  | 2.12 | % |  |  | 0.55 | %
EUR |  |  | 4.18 | % |  |  | 0.21 | % |  |  | (1.66 | )% |  |  | 1.03 | % |  |  | (5.36 | )%

| Note 3 | Segments

| A. | General

The operating segments are based on information that is reviewed by the chief operating decision maker (CODM) for the allocation of resources and assessment of performance. Accordingly, for management purposes, the Group is organized into operating segments based on the products and services and on the geographic location of the business units. The Company operates directly and through subsidiaries, and it has the following operating segments:

IT Solutions and Services, Consulting, and Management in Israel;

IT Solutions and Services in the US;

Cloud and Computing Infrastructures;

Marketing and Support of Software Products.

Interim Consolidated Financial Statements 16

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 3 | Segments (cont.)

| A. | General (cont.)

IT Solutions and Services, Consulting, and Management in Israel

This segment includes a wide range of technological and other solutions and services in the sectors: core systems, data and AI, information security and cyber, digital, and more. As part of these solutions, the Company is engaged in the development of large-scale technological systems and the provision of related services; execution of IT and software integration projects; development of operational solutions and C4 ISR systems for defense entities in Israel and abroad; outsourcing services and professional services by experts and consultants; offshore/nearshore services; BPO and call center services; software project management; software development; software and QA testing; enhancement and upgrading of existing technological systems; as well as the provision of training and implementation services.

In addition, this activity includes management consulting and multidisciplinary engineering and operational consulting services, including supervision of complex engineering projects, particularly infrastructure projects in the transportation sector.

IT Solutions and Services in the United States

This segment is conducted through two arms – Matrix US Holding and XTIVIA – each of which holds several subsidiaries in the United States.

The activity includes the provision of solutions and expert services in the sector of GRC – Government Risk & Compliance, fraud prevention, cyber risk, and anti-money laundering, as well as specialized advisory services in this sector and specialized IT services for the healthcare sector.

This segment also includes the provision of specialized technological solutions and services in the sectors of portals, BI, CRM, DBA, and EIM; dedicated solutions for the US Government Contracting market; distribution and marketing services for software products; and the provision of professional services and offshore solutions, including through employees at the Company’s operational centers in India. The operations also include professional services and projects conducted by experts from across the Matrix Group, serving as a gateway to the business model of exporting the Company’s services and products to the US market.

Interim Consolidated Financial Statements 17

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 3 | Segments (cont.)

| A. | General (cont.)

Cloud and Computing Infrastructures

The Company’s activity in this segment primarily includes providing a wide range of cloud solutions and services, including sales, service, and support for public cloud (PaaS, SaaS, IaaS) and private cloud at all implementation stages - consulting, architecture, development, deployment, environment management, and support - as well as advanced FinOps services (through the Company’s specialized business unit, CloudZone). It also includes computing solutions for IT infrastructure, communication solutions, marketing and sales of hardware, software licenses, and peripheral equipment for business.

customers, alongside with related professional services. Additionally, the Company offers multimedia solutions and command-and-control centers for smart offices, office automation and printing solutions, sales and marketing of test and measurement equipment, communication, cybersecurity, and RF solutions, automation projects and integration, advanced calibration services, and industrial video and image processing solutions (through RDT Equipment and Systems and Asio Vision). Furthermore, the Company is engaged in the import, sales, and service of automated manufacturing machines for component assembly and automated testing machines for assembly processes and components in production lines across various industries, including industrial, medical, military, laser, and sensor applications for civilian and defense purposes, as well as optical communication systems and automotive radar systems.

Marketing and Support of Software Products

This segment primarily includes the sale and distribution of software products (mainly from foreign software manufacturers) across various sectors, such as control and monitoring products, cybersecurity, communication solutions, virtualization, knowledge management products, databases and Big Data, open-source systems, and IT management products. It also includes providing professional support services for these products, as well as implementation projects, training, support, and maintenance for integrated products and systems.

Interim Consolidated Financial Statements 18

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 3 | Segments (cont.)

| B. | Composition

For the six months ended June 30, 2025 - unaudited (NIS thousands)

|  | IT Solutions and Services, Consulting, and Management in Israel |  |  | Sales, Marketing and Support of Software Products |  |  | Cloud and Computing Infrastructures |  |  | IT Solutions and Services in the US |  |  | Adjustments |  |  | Total |
Revenues to non-related parties |  |  | 1,806,513 |  |  |  | 168,177 |  |  |  | 800,316 |  |  |  | 222,573 |  |  |  | - |  |  |  | 2,997,579 |
Inter-segment revenues |  |  | 43,550 |  |  |  | 13,031 |  |  |  | 14,798 |  |  |  | 423 |  |  |  | (71,802 | ) |  |  | - |
Revenues |  |  | 1,850,063 |  |  |  | 181,208 |  |  |  | 815,114 |  |  |  | 222,996 |  |  |  | (71,802 | ) |  |  | 2,997,579 |
Segment results |  |  | 144,967 |  |  |  | 18,551 |  |  |  | 61,164 |  |  |  | 34,234 |  |  |  | (6,206 | ) |  |  | 252,710 |
Financial expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (55,369 | )
Financial income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,609 |
Taxes on income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (51,084 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 156,866 |

For the six months ended June 30, 2024 - unaudited (NIS thousands)

|  | IT Solutions and Services, Consulting, and Management in Israel |  |  | Sales, Marketing and Support of Software Products |  |  | Cloud and Computing Infrastructures |  |  | IT Solutions and Services in the US |  |  | Adjustments |  |  | Total |
Revenues to non-related parties |  |  | 1,609,866 |  |  |  | 206,480 |  |  |  | 735,075 |  |  |  | 235,024 |  |  |  | - |  |  |  | 2,786,445 |
Inter-segment revenues |  |  | 45,416 |  |  |  | 12,856 |  |  |  | 26,985 |  |  |  | 2,461 |  |  |  | (87,718 | ) |  |  | - |
Revenues |  |  | 1,655,282 |  |  |  | 219,336 |  |  |  | 762,060 |  |  |  | 237,485 |  |  |  | (87,718 | ) |  |  | 2,786,445 |
Segment results |  |  | 128,484 |  |  |  | 16,285 |  |  |  | 50,456 |  |  |  | 33,888 |  |  |  | (7,180 | ) |  |  | 221,933 |
Financial expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (42,388 | )
Financial income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,969 |
Taxes on income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (45,991 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 144,523 |

Interim Consolidated Financial Statements 19

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 3 | Segments (cont.)

| B. | Composition (cont.)

For the three months ended June 30, 2025 - unaudited (NIS thousands)

|  | IT Solutions and Services, Consulting, and Management in Israel |  |  | Sales, Marketing and Support of Software Products |  |  | Cloud and Computing Infrastructures |  |  | IT Solutions and Services in the US |  |  | Adjustments |  |  | Total |
Revenues to non-related parties |  |  | 900,557 |  |  |  | 90,856 |  |  |  | 346,073 |  |  |  | 113,893 |  |  |  | - |  |  |  | 1,451,379 |
Inter-segment revenues |  |  | 19,975 |  |  |  | 1,848 |  |  |  | 8,493 |  |  |  | 264 |  |  |  | (30,580 | ) |  |  | - |
Revenues |  |  | 920,532 |  |  |  | 92,704 |  |  |  | 354,566 |  |  |  | 114,157 |  |  |  | (30,580 | ) |  |  | 1,451,379 |
Segment results |  |  | 74,828 |  |  |  | 10,091 |  |  |  | 25,352 |  |  |  | 19,129 |  |  |  | (2,681 | ) |  |  | 126,719 |
Financial expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (30,071 | )
Financial income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,689 |
Taxes on income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (25,054 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 76,283 |

For the three months ended June 30, 2024 - unaudited (NIS thousands)

|  | IT Solutions and Services, Consulting, and Management in Israel |  |  | Sales, Marketing and Support of Software Products |  |  | Cloud and Computing Infrastructures |  |  | IT Solutions and Services in the US |  |  | Adjustments |  |  | Total |
Revenues to non-related parties |  |  | 793,334 |  |  |  | 114,843 |  |  |  | 306,782 |  |  |  | 117,773 |  |  |  | - |  |  |  | 1,332,732 |
Inter-segment revenues |  |  | 22,219 |  |  |  | 7,142 |  |  |  | 17,496 |  |  |  | 1,022 |  |  |  | (47,879 | ) |  |  | - |
Revenues |  |  | 815,553 |  |  |  | 121,985 |  |  |  | 324,278 |  |  |  | 118,795 |  |  |  | (47,879 | ) |  |  | 1,332,732 |
Segment results |  |  | 65,157 |  |  |  | 8,926 |  |  |  | 22,826 |  |  |  | 16,919 |  |  |  | (2,573 | ) |  |  | 111,255 |
Financial expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (20,898 | )
Financial income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,065 |
Taxes on income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (23,321 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 73,101 |

Interim Consolidated Financial Statements 20

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 3 | Segments (cont.)

| B. | Composition (cont.)

For the year ended December 31, 2024 - audited (NIS thousands)

|  | IT Solutions and Services, Consulting, and Management in Israel |  |  | Sales, Marketing and Support of Software Products |  |  | Cloud and Computing Infrastructures |  |  | IT Solutions and Services in the US |  |  | Adjustments |  |  | Total |
Revenue from external customers |  |  | 3,227,608 |  |  |  | 425,971 |  |  |  | 1,465,935 |  |  |  | 460,024 |  |  |  | - |  |  |  | 5,579,538 |
Inter-segment revenues |  |  | 109,659 |  |  |  | 30,794 |  |  |  | 49,996 |  |  |  | 915 |  |  |  | (191,364 | ) |  |  | - |
Total revenues |  |  | 3,337,267 |  |  |  | 456,765 |  |  |  | 1,515,931 |  |  |  | 460,939 |  |  |  | (191,364 | ) |  |  | 5,579,538 |
Segmental results |  |  | 250,113 |  |  |  | 45,364 |  |  |  | 106,405 |  |  |  | 66,865 |  |  |  | (18,673 | ) |  |  | 450,074 |
Financial expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (86,956 | )
Financial income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 20,084 |
Taxes on income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (94,978 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 288,224 |
Additional information |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  |  | 2,893,978 |  |  |  | 374,515 |  |  |  | 1,357,891 |  |  |  | 311,524 |  |  |  | (191,364 | ) |  |  | 4,746,544 |
Depreciation and amortization |  |  | 148,210 |  |  |  | 6,640 |  |  |  | 26,997 |  |  |  | 4,964 |  |  |  | - |  |  |  | 186,811 |

Interim Consolidated Financial Statements 21

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 4 | Significant Events During the Reporting Period

| A. | Dividend distribution

Following the declaration of the dividend on March 10, 2025, on April 8, 2025, the Company distributed a dividend in the amount of NIS 52.2 million to its shareholders (reflecting NIS 0.82 for each NIS 1 par value ordinary shares).

Following the declaration of the dividend on May 12, 2025, on July 15, 2025, the Company distributed a dividend in the amount of NIS 56.6 million to its shareholders (reflecting NIS 0.89 for each NIS 1 par value ordinary shares).

| B. | Transactions with holders of non-controlling interests in a subsidiary

In the first quarter, the Company entered into a mutual put/call options renewal agreement with non-controlling interests in a subsidiary for the sale and acquisition of the balance of the subsidiary’s shares. The transaction was recorded against equity.

| C. | Acquisition of Gav

On February 4, 2025, the Company, through its subsidiary Matrix IT Systems Ltd., completed the acquisition of 70% of the share capital of Gav Systems Ltd. and Gav Experts Ltd. for a total of approximately NIS 45.5 million. In addition, the sellers were paid a dividend for accrued earnings up until 31.12.23 in the amount of NIS 29 million. Pursuant to the agreement, the Company and the seller have a mutual option to sell and purchase the seller’s remaining shares to the Company. The acquired company provides outsourcing services, primarily in the form of computing and software personnel.

As at the report date, the valuation underlying the allocation of the consideration to assets and liabilities (the PPA) has not yet been completed and accordingly, this allocation is temporary, according to management’s assessment, and may be updated in the coming periods after the valuation is completed.

According to the provisional allocation, the excess purchase cost of approximately NIS 72.2 million was attributed to net intangible assets in the amount of approximately NIS 16.8 million, and the remainder was allocated to goodwill.

As indicated above, the Group recognized the fair value of the assets acquired and liabilities that were undertaken in the business combination according to a temporary measurement. Thus, the consideration for the acquisition as well as the fair value of the assets and liabilities acquired are subject to final adjustment up to 12 months from the acquisition date.

Interim Consolidated Financial Statements 22

Matrix IT Ltd.

Notes to the Interim Consolidated Financial Statements

| Note 4 | Significant Events During the Reporting Period (cont.)

| D. | Entering into a memorandum of understanding for a merger with Magic

On March 10, 2025, a memorandum of understanding (MOU) was signed between Matrix IT Ltd. (“Matrix”) and Magic Software Enterprises Ltd. (“Magic”) for the purpose of negotiating a binding merger agreement, under which Matrix will acquire the entire issued and paid-up share capital of Magic by way of a reverse triangular merger. The considerations to Magic shareholders under the transaction will be in shares of Matrix (hereinafter: the “Magic transaction”). Upon completion of the transaction, Magic will become a private company wholly owned by Matrix.

As Formula is the controlling shareholder in both the Company and Magic, and in light of the materiality of the transaction, the Company’s Board of Directors appointed an independent committee that was empowered to examine the engagement in the transaction, to negotiate with Magic regarding the terms of the transaction, to approve the transaction, and to formulate recommendations to the Board with regard thereto. For additional details, see the immediate report dated 11.3.2025 (reference: 2025-01-015939).

Pursuant to generally accepted accounting principles, the transaction will be accounted for using the pooling method rather than the purchase method. Meaning, the Company will include Magic’s assets and liabilities in its financial statements at the values recorded in the controlling shareholder’s books. In addition, as at the report date, the Company had already recognized transaction costs related to the Magic transaction totaling about NIS 7 million (NIS 5 million in 2024 and the remainder in the second half of 2025).

Interim Consolidated Financial Statements 23