6-K
MAGIC SOFTWARE ENTERPRISES LTD (RMTHF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2025
Commission File Number 0-19415
MAGIC SOFTWARE ENTERPRISES LTD.
(Translation of Registrant’s name into English)
Terminal Center, 1 Yahadut Canada Street, Or-Yehuda,Israel 6037501
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
CONTENTS
Quarterly Results of Operations
On March 11, 2025, Magic Software Enterprises Ltd. (the “Company”, “we” or “us”) announced our financial results for the fourth quarter and full year ended December 31, 2024. A copy of our press release announcing our results is furnished as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) and is incorporated herein by reference.
The GAAP financial statements appended to this Form 6-K in Exhibit 99.1 are hereby incorporated by reference in our Registration Statements on Form S-8 (SEC File No.’s 333-113552, 333-132221 and 333-149553).
| Exhibit No. | Title of Exhibit |
|---|---|
| 99.1 | Magic Software Reports Fourth Quarter and Full Year 2024 Financial Results |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MAGIC SOFTWARE ENTERPRISES LTD. | |
|---|---|
| By: | /s/ Asaf Berenstin |
| Name: | Asaf Berenstin |
| Title: | Chief Financial Officer |
Dated: March 11, 2025
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Exhibit99.1
PRESS RELEASE
MagicSoftware Reports Fourth Quarter and Full Year 2024 Financial Results
OrYehuda, Israel, March 11, 2025 – Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC) (“the Company”), a global provider of IT consulting services and end-to-end integration and application development platforms solutions, announced today its financial results for the fourth quarter and full year ended December 31, 2024.
SummaryResults for the Fourth Quarter 2024 (USD in millions, except per share data)
| GAAP | Non-GAAP | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q4<br> 2024 | Q4<br> 2023 | %<br> Change | Q4<br> 2024 | Q4<br> 2023 | %<br> Change | |||||||||||||
| Revenues | $ | 142.6 | $ | 125.5 | 13.6 | % | $ | 142.6 | $ | 125.5 | 13.6 | % | ||||||
| Gross profit | $ | 42.0 | $ | 37.0 | 13.5 | % | $ | 43.2 | $ | 38.6 | 11.9 | % | ||||||
| Gross margin | 29.4 | % | 29.4 | % | - | 30.3 | % | 30.8 | % | (50)<br> bps | ||||||||
| Operating income | $ | 16.7 | $ | 13.0 | 28.6 | % | $ | 18.8 | $ | 17.7 | 6.1 | % | ||||||
| Operating margin | 11.7 | % | 10.3 | % | 140<br> bps | 13.2 | % | 14.1 | % | (90)<br> bps | ||||||||
| Net income (*) | $ | 10.6 | $ | 8.5 | 25.2 | % | $ | 11.5 | $ | 11.6 | (0.5 | %) | ||||||
| Diluted EPS | $ | 0.22 | $ | 0.17 | 29.4 | % | $ | 0.24 | $ | 0.24 | - | |||||||
| (*) | Attributable<br> to Magic Software’s shareholders. | |||||||||||||||||
| --- | --- |
FinancialHighlights for the Fourth Quarter Ended December 31, 2024
| ● | Revenues<br> for the fourth quarter of 2024 increased by 13.6% to $142.6 million, compared to $125.5 million<br> in the same period of the previous year. |
|---|---|
| ● | Operating<br> income for the fourth quarter of 2024 increased by 28.6% to $16.7 million, compared to $13.0<br> million in the same period of the previous year. |
| --- | --- |
| ● | Non-GAAP<br> operating income for the fourth quarter of 2024 increased by 6.1% to $18.8 million,<br> compared to $17.7 million in the same period of the previous year. |
| --- | --- |
| ● | Net<br> income attributable to Magic Software’s shareholders for the fourth quarter of 2024<br> increased by 25.2% to $10.6 million, or $0.22 per fully diluted share, compared to $8.5<br> million, or $0.17 per fully diluted share, in the same period of the previous year. |
| --- | --- |
| ● | Non-GAAP<br> net income attributable to Magic Software’s shareholders for the fourth quarter of<br> 2024 decreased by 0.5% to $11.5 million, or $0.24 per fully diluted share, compared<br> to $11.6 million, or $0.24 per fully diluted share, in the same period of the previous<br> year. |
| --- | --- |
SummaryResults for the Full Year Ended December 31, 2024 (USD in millions, except per share data)
| GAAP | Non-GAAP | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12M<br> 2024 | 12M<br> 2023 | %<br> Change | 12M<br> 2024 | 12M<br> 2023 | %<br> Change | |||||||||||||
| Revenues | $ | 552.5 | $ | 535.1 | 3.3 | % | $ | 552.5 | $ | 535.1 | 3.3 | % | ||||||
| Gross Profit | $ | 157.2 | $ | 153.0 | 2.7 | % | $ | 162.6 | $ | 158.4 | 2.6 | % | ||||||
| Gross Margin | 28.4 | % | 28.6 | % | (20)<br> bps | 29.4 | % | 29.6 | % | (20)<br> bps | ||||||||
| Operating Income | $ | 61.2 | $ | 57.1 | 7.2 | % | $ | 73.6 | $ | 71.8 | 2.5 | % | ||||||
| Operating Margin | 11.1 | % | 10.7 | % | 40<br> bps | 13.3 | % | 13.4 | % | (10)<br> bps | ||||||||
| Net Income (*) | $ | 36.9 | $ | 37.0 | (0.4 | %) | $ | 45.7 | $ | 48.4 | (5.7 | %) | ||||||
| Diluted EPS | $ | 0.75 | $ | 0.75 | - | $ | 0.93 | $ | 0.99 | (6.1 | %) | |||||||
| (*) | Attributable<br> to Magic Software’s shareholders. | |||||||||||||||||
| --- | --- |
FinancialHighlights for the Year Ended December 31, 2024
| ● | Revenues for the year increased<br> by 3.3% to $552.5 million compared to $535.1 million in 2023. |
|---|---|
| ● | Operating income for the<br> year increased by 7.2% to $61.2 million compared to $57.1 million in the prior year. |
| ● | Non-GAAP operating income<br> for the year increased by 2.5% to $73.6 million compared to $71.8 million in the prior year. |
| --- | --- |
| ● | Net income attributable<br> to Magic Software’s shareholders for the year decreased by 0.4% to $36.9 million, or $0.75 per fully diluted share, compared<br> to $37.0 million, or $0.75 per fully diluted share, in the prior year. |
| --- | --- |
| ● | Non-GAAP net income attributable<br> to Magic Software’s shareholders for the year decreased by 5.7% to $45.7 million, or $0.93 per fully diluted share, compared<br> to $48.4 million, or $0.99 per fully diluted share, in the prior year. |
| --- | --- |
| ● | Cash flow from<br> operating activities for the year ended December 31, 2024, amounted to $74.7 million compared to $69.0 million<br> for the year ended December 31, 2023. |
|---|---|
| ● | As of December 31,<br> 2024, Magic’s cash, cash equivalents and short bank deposits amounted to $112.8 million. |
| ● | Magic<br> is introducing 2025 annual revenue guidance of between $593 million and $603 million (based on current currency exchange rates)<br> reflecting an annual growth of 7.3% to 9.1% compared to prior year. |
Declarationof Dividend for the Second Half of 2024
In accordance with its dividend distribution policy, the Company’s board of directors declared a semi-annual cash dividend in an amount of 32.7 cents per share and in an aggregate amount of approximately $16.1 million, which together with prior dividend distribution declared on November 18, 2024 and paid on January 8, 2025, amount to $27.6 million, reflecting approximately 75% of its distributable profits for the year.
The dividend is payable on May 7, 2025, to all of the Company’s shareholders of record at the close of trading on the NASDAQ Global Select Market on April 22, 2025.
In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30% (if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company’s share capital) or 25% (for all other dividend recipients) of the dividend amount payable to each shareholder of record, subject to applicable exemptions.
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The dividend will be paid in US dollars on the ordinary shares of Magic Software Enterprises that are traded both on the Tel Aviv Stock Exchange and the NASDAQ Global Select Market.
GuyBernstein, Chief Executive Officer of Magic Software, said: "We are pleased to report strong results for the fourth quarter and full-year 2024, reflecting continued growth in Israel and stability in the U.S. market. Over the past year, we successfully navigated a dynamic business environment, adapting to market shifts through innovation and operational resilience. Our continued investment in cutting-edge digital and cloud transformation solutions has reinforced our position as a trusted partner for our clients. With a strengthening demand environment in the U.S. and a solid pipeline of opportunities, we are confident in our ability to sustain momentum and drive long-term profitability, delivering lasting value to our shareholders.”
“We are pleased to formally announce the signing of a Memorandum of Understanding for the commencement of a strategic business transaction involving the merger of Magic into Matrix I.T (TASE: MTRX), Israel’s leading IT Services company. This transaction, to the extent completed, constitutes a significant milestone in the history of both companies and represents a transformational event for the company. This Merger represents a transformative opportunity for both Magic and Matrix, creating a stronger and more diversified company, with enhanced capabilities to serve customers worldwide, drive innovation, and generate long-term value for shareholders. Magic remains committed to a seamless integration process, ensuring continued operational excellence and business continuity throughout the transition. The combined entity’s aggregate market value is expected to be $2.1 billion (approximately 7.7 billion ILS), a valuation that would place it among the largest publicly traded IT services companies in the U.S and in Europe.
Had the Companies already merged in 2024, the combined entity would have reported the following results in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board:
| ● | Revenues:<br> $2.1 billion. |
|---|---|
| ● | Gross<br> profit: approximately $382 million (Gross margin: 18.6%). |
| --- | --- |
| ● | Operating<br> income: approximately $183 million (Operating margin: 8.9%). |
| --- | --- |
| ● | Net<br> income attributable to non-controlling interests: approximately $110.6 million (Net margin:<br> 5.4%). |
| --- | --- |
The combined entity is expected to operate in approximately 50 countries, serve around 6,000 active clients, and employ over 15,000 employees. We look forward to a promising future for the merged company, to the extent completed, and are excited to embark on this new chapter together."
ConferenceCall Details
Magic Software’s management will host a conference call on Wednesday, March 12, 2025, at 11:00 am Eastern Daylight Time (17:00 Israel Daylight Time) to review and discuss Magic Software’s results.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 5 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, call the international dial-in number.
NORTH AMERICA: +1-866-652-8972
UK: 0-800-917-9141
ISRAEL: 03-918-0650
ALL OTHERS: +972-3-918-0650
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For those unable to join the live call, a replay of the call will be available in the Investor Relations section of Magic Software’s website, www.magicsoftware.com.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income attributable to Magic Software’s shareholders and non-GAAP basic and diluted earnings per share.
Magic Software believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Magic Software’s financial condition and results of operations. Magic Software’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.
Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures together with GAAP results. Magic Software urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.
Non-GAAP measures used in this press release are included in the financial tables of this release. These non-GAAP measures exclude the following items:
| ● | Amortization of purchased intangible assets and other<br> related costs; |
|---|---|
| ● | In-process research and development capitalization<br> and amortization; |
| --- | --- |
| ● | Cost of share-based payment; |
| --- | --- |
| ● | Costs related to acquisition of new businesses; |
| --- | --- |
| ● | The related tax, non-controlling interests’ effects<br> of the above items; |
| --- | --- |
| ● | Change in valuation of contingent consideration related<br> to acquisitions; |
| --- | --- |
| ● | Change in deferred tax assets on carry forward tax<br> losses. |
| --- | --- |
Reconciliation of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included in the financial tables of this release.
AboutMagic Software Enterprises
Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC) is a global provider of end-to-end integration and application development platforms solutions and IT consulting services.
For more information, visit www.magicsoftware.com.
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Forward Looking Statements
Some of the statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as “will,” “look forward”, “expect,” “believe,” “guidance” and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made based on management’s current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in our Annual Report on Form 20-F for the year ended December 31, 2023, which filed on May 13, 2024, and subsequent reports and filings made from time to time with the Securities and Exchange Commission.
Magic^®^is a registered trademark of Magic Software Enterprises Ltd. All other product and company names mentioned herein are for identification purposes only and are the property of, and might be trademarks of, their respective owners.
Press Contact:
Ronen Platkevitz
Magic Software Enterprises
ir@magicsoftware.com
5
MAGICSOFTWARE ENTERPRISES LTD.
CONDENSEDCONSOLIDATED STATEMENTS OF INCOME
U.S.Dollars in thousands (except per share data)
| Three<br> months ended | Year<br> ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br> 31, | December<br> 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Unaudited | Unaudited | |||||||||||
| Revenues | $ | 142,582 | $ | 125,545 | $ | 552,520 | $ | 535,052 | ||||
| Cost<br> of Revenues | 100,627 | 88,585 | 395,342 | 382,065 | ||||||||
| Gross<br> profit | 41,955 | 36,960 | 157,178 | 152,987 | ||||||||
| Research<br> and development, net | 3,988 | 2,703 | 12,661 | 10,328 | ||||||||
| Selling,<br> marketing and general and administrative expenses | 21,267 | 21,274 | 83,280 | 85,551 | ||||||||
| Total<br> operating expenses | 25,255 | 23,977 | 95,941 | 95,879 | ||||||||
| Operating<br> income | 16,700 | 12,983 | 61,237 | 57,108 | ||||||||
| Financial<br> expenses, net | (1,999 | ) | (1,899 | ) | (6,242 | ) | (4,616 | ) | ||||
| Income<br> before taxes on income | 14,701 | 11,084 | 54,995 | 52,492 | ||||||||
| Taxes<br> on income | 2,286 | 1,724 | 11,328 | 9,934 | ||||||||
| Net<br> income | $ | 12,415 | $ | 9,360 | $ | 43,667 | $ | 42,558 | ||||
| Share<br> of loss of a company accounted for at equity, net | (108 | ) | (56 | ) | (376 | ) | (56 | ) | ||||
| Net<br> income attributable to non-controlling interests | (1,685 | ) | (821 | ) | (6,408 | ) | (5,471 | ) | ||||
| Net<br> income attributable to Magic's shareholders | $ | 10,622 | $ | 8,483 | $ | 36,883 | $ | 37,031 | ||||
| Weighted<br> average number of shares used in | ||||||||||||
| computing<br> net earnings per share | ||||||||||||
| Basic | 49,099 | 49,099 | 49,099 | 49,096 | ||||||||
| Diluted | 49,099 | 49,099 | 49,099 | 49,098 | ||||||||
| Basic<br> and diluted earnings per share attributable to Magic's shareholders | $ | 0.22 | $ | 0.17 | $ | 0.75 | $ | 0.75 |
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MAGICSOFTWARE ENTERPRISES LTD.
RECONCILIATIONOF GAAP AND NON-GAAP RESULTS
U.S.Dollars in thousands (except per share data)
| Three<br> months ended | Year<br> ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br> 31, | December<br> 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Unaudited | Unaudited | |||||||||||
| GAAP<br> gross profit | $ | 41,955 | $ | 36,960 | $ | 157,178 | $ | 152,987 | ||||
| Amortization<br> of capitalized software and acquired technology | 949 | 1,222 | 4,214 | 4,288 | ||||||||
| Amortization<br> of other intangible assets | 315 | 447 | 1,250 | 1,173 | ||||||||
| Non-GAAP<br> gross profit | $ | 43,219 | $ | 38,629 | $ | 162,642 | $ | 158,448 | ||||
| GAAP<br> operating income | $ | 16,700 | $ | 12,983 | $ | 61,237 | $ | 57,108 | ||||
| Gross<br> profit adjustments | 1,264 | 1,669 | 5,464 | 5,461 | ||||||||
| Amortization<br> of other intangible assets | 2,219 | 1,888 | 7,810 | 7,988 | ||||||||
| Increase<br> (decrease) in valuation of contingent consideration related to acquisitions | (1,136 | ) | (142 | ) | (488 | ) | 240 | |||||
| Capitalization<br> of software development | (443 | ) | (842 | ) | (2,650 | ) | (3,183 | ) | ||||
| Costs<br> related to acquisitions | 268 | 152 | 602 | 372 | ||||||||
| Cost<br> of share-based payment | (119 | ) | 1,967 | 1,597 | 3,798 | |||||||
| Non-GAAP<br> operating income | $ | 18,753 | $ | 17,675 | $ | 73,572 | $ | 71,784 | ||||
| GAAP<br> net income attributable to Magic's shareholders | $ | 10,622 | $ | 8,483 | $ | 36,883 | $ | 37,031 | ||||
| Operating<br> income adjustments | 2,053 | 4,692 | 12,335 | 14,676 | ||||||||
| Expenses<br> attributed to non-controlling interests and redeemable non-controlling interests | (477 | ) | (709 | ) | (1,791 | ) | (1,713 | ) | ||||
| Increase<br> in valuation of consideration related to acquisitions | 529 | 34 | 761 | 290 | ||||||||
| Deferred<br> taxes on the above items | (1,187 | ) | (899 | ) | (2,538 | ) | (1,879 | ) | ||||
| Non-GAAP<br> net income attributable to Magic's shareholders | $ | 11,540 | $ | 11,601 | $ | 45,650 | $ | 48,405 | ||||
| Non-GAAP<br> basic and diluted net earnings per share | $ | 0.24 | $ | 0.24 | $ | 0.93 | $ | 0.99 | ||||
| Weighted<br> average number of shares used in computing basic | ||||||||||||
| net<br> earnings per share | 49,099 | 49,099 | 49,099 | 49,096 | ||||||||
| Weighted<br> average number of shares used in computing diluted net earnings per share | 49,099 | 49,099 | 49,099 | 49,098 |
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Summaryof Non-GAAP Financial Information
U.S.Dollars in thousands (except per share data)
| Three<br> months ended | Year<br> ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br> 31, | December<br> 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
| Revenues | $ | 142,582 | 100.0 | % | $ | 125,545 | 100.0 | % | $ | 552,520 | 100 | % | $ | 535,052 | 100 | % |
| Gross<br> profit | 43,219 | 30.3 | % | 38,629 | 30.8 | % | 162,642 | 29.4 | % | 158,448 | 29.6 | % | ||||
| Operating<br>income | 18,753 | 13.2 | % | 17,675 | 14.1 | % | 73,572 | 13.3 | % | 71,784 | 13.4 | % | ||||
| Net<br> income attributable to | ||||||||||||||||
| Magic's<br> shareholders | 11,540 | 8.1 | % | 11,601 | 9.2 | % | 45,650 | 8.3 | % | 48,405 | 9.0 | % | ||||
| Basic<br> and diluted earnings per share | $ | 0.24 | $ | 0.24 | $ | 0.93 | $ | 0.99 |
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MAGICSOFTWARE ENTERPRISES LTD.
CONDENSEDCONSOLIDATED BALANCE SHEETS
U.S.Dollars in thousands
| December 31, | December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Unaudited | Unaudited | |||
| ASSETS | ||||
| CURRENT<br> ASSETS: | ||||
| Cash<br> and cash equivalents | $ | 112,779 | $ | 105,943 |
| Short-term<br> bank deposits | 51 | 751 | ||
| Trade<br> receivables, net | 139,569 | 131,098 | ||
| Other<br> accounts receivable and prepaid expenses | 23,800 | 18,833 | ||
| Total current<br> assets | 276,199 | 256,625 | ||
| LONG-TERM<br> ASSETS: | ||||
| Deferred<br> tax assets | 4,895 | 6,729 | ||
| Right-of-use<br> assets | 24,707 | 25,718 | ||
| Other<br> long-term receivables and Investments in companies accounted for at equity | 9,261 | 8,623 | ||
| Property<br> and equipment, net | 7,467 | 7,988 | ||
| Intangible<br> assets and goodwill, net | 217,802 | 216,723 | ||
| Total long<br> term assets | 264,132 | 265,781 | ||
| TOTAL<br> ASSETS | $ | 540,331 | $ | 522,406 |
| LIABILITIES<br> AND EQUITY | ||||
| CURRENT<br> LIABILITIES: | ||||
| Short-term<br> debt | $ | 23,169 | $ | 28,941 |
| Trade<br> payables | 28,920 | 28,415 | ||
| Dividend<br> payable to Magic Software shareholders | 11,587 | - | ||
| Accrued<br> expenses and other accounts payable | 58,042 | 41,492 | ||
| Current<br> maturities of lease liabilities | 4,818 | 4,406 | ||
| Liability<br> in respect of business combinations | 2,654 | 6,656 | ||
| Put<br> options of non-controlling interests | 20,066 | 18,252 | ||
| Deferred<br> revenues and customer advances | 21,031 | 13,537 | ||
| Total current<br> liabilities | 170,287 | 141,699 | ||
| LONG<br> TERM LIABILITIES: | ||||
| Long-term<br> debt | 36,125 | 52,267 | ||
| Deferred<br> tax liability | 7,848 | 11,610 | ||
| Long-term<br> lease liabilities | 22,040 | 23,101 | ||
| Long-term<br> liability in respect of business combinations | 1,781 | 1,049 | ||
| Put<br> options of non-controlling interests | - | 620 | ||
| Accrued<br> severance pay, net | 1,181 | 1,116 | ||
| Total long<br> term liabilities | 68,975 | 89,763 | ||
| EQUITY: | ||||
| Magic<br> Software Enterprises shareholders' equity | 277,190 | 265,981 | ||
| Non-controlling<br> interests | 23,879 | 24,963 | ||
| Total equity | 301,069 | 290,944 | ||
| TOTAL<br> LIABILITIES AND EQUITY | $ | 540,331 | $ | 522,406 |
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MAGICSOFTWARE ENTERPRISES LTD.
CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. Dollars in thousands
| Year<br> ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| Unaudited | ||||||
| Cash flows from operating<br> activities: | ||||||
| Net<br> income | $ | 43,291 | $ | 42,502 | ||
| Adjustments<br> to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation<br> and amortization | 20,823 | 20,553 | ||||
| Cost<br> of share-based payment | 1,607 | 3,798 | ||||
| Change<br> in deferred taxes, net | (1,564 | ) | (3,238 | ) | ||
| Payments<br> of deferred and contingent consideration related to acquisitions | (922 | ) | (6,572 | ) | ||
| Capital<br> gain on sale of fixed assets | 7 | (42 | ) | |||
| Amortization<br> of premium and accrued interest on debt instruments at fair value through other comprehensive income | (27 | ) | (114 | ) | ||
| Effect<br> of exchange rate on of cash and cash equivalents held in currencies other than the functional currency | (82 | ) | 285 | |||
| Changes<br> in value of short-term and long-term loans from banks and others and deposits, net | (676 | ) | 1,533 | |||
| Working<br> capital adjustments: | ||||||
| Trade<br> receivables | (4,339 | ) | 18,426 | |||
| Other<br> current and long-term accounts receivable | (4,990 | ) | (5,586 | ) | ||
| Trade<br> payables | 677 | 858 | ||||
| Accrued<br> expenses and other accounts payable | 13,279 | (7,190 | ) | |||
| Deferred<br> revenues | 7,609 | 3,779 | ||||
| Net<br> cash provided by operating activities | 74,693 | 68,992 | ||||
| Cash<br> flows from investing activities: | ||||||
| Payments<br> for business acquisitions, net of cash acquired (Appendix A) | (12,507 | ) | (14,244 | ) | ||
| Loans<br> to related party | - | 909 | ||||
| Proceeds<br> from sale of property, plant and equipment | 45 | 54 | ||||
| Payments<br> to former shareholders of consolidated company | - | (583 | ) | |||
| Cash<br> paid in conjunction with deferred payments and contingent liabilities related to business combinations | (6,631 | ) | (11,320 | ) | ||
| Purchase<br> of property and equipment | (1,535 | ) | (1,618 | ) | ||
| Change<br> in marketable securities | 585 | (1,243 | ) | |||
| Change<br> in short-term and long-term deposits | 482 | 4,110 | ||||
| Capitalization<br> of software development | (2,650 | ) | (3,183 | ) | ||
| Investment<br> in a company accounted for at equity | (198 | ) | (498 | ) | ||
| Net<br> cash used in investing activities | (22,409 | ) | (27,616 | ) | ||
| Cash<br> flows from financing activities: | ||||||
| Exercise of employees’<br> stock options | - | 22 | ||||
| Dividend<br> paid to non-controlling interests | (7,870 | ) | (4,055 | ) | ||
| Dividend<br> to Magic’s shareholders | (10,016 | ) | (30,798 | ) | ||
| Repayment<br> of long-term loans from banks and others | (33,695 | ) | (20,994 | ) | ||
| Receipt<br> of long-term loans from banks and others | 12,603 | 49,465 | ||||
| Repayment<br> of lease liabilities | (6,029 | ) | (5,690 | ) | ||
| Purchase<br> of non-controlling interest | (314 | ) | - | |||
| Proceeds<br> from sale of non-controlling interest | 176 | - | ||||
| Cash<br> paid due to exercise of put option by non-controlling interests | - | (5,243 | ) | |||
| Net<br> cash used in financing activities | (45,145 | ) | (17,293 | ) | ||
| Effect<br> of exchange rate changes on cash and cash equivalents | (303 | ) | (1,202 | ) | ||
| Increase<br> in cash and cash equivalents | 6,836 | 22,881 | ||||
| Cash<br> and cash equivalents at the beginning of the period | 105,943 | 83,062 | ||||
| Cash<br> and cash equivalents at end of the period | $ | 112,779 | $ | 105,943 |
10