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 1General

 

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 2Significant 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 2Significant 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 3Segments

 

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 3Segments (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 3Segments (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 3Segments (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 3Segments (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 4Significant 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 4Significant 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