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Yahoo
22-05-2025
- Business
- Yahoo
Formula Systems Reports First Quarter 2025 Financial Results
Revenues for the first quarter increased by 8.1% year over year, reaching a first quarter all-time high of $754.7 million. Net Income for the first quarter increased by 12.6% year over year, reaching a first quarter all-time high of $19.3 Million. OR YEHUDA, Israel, May 22, 2025 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) ('Formula' or the 'Company'), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its first quarter ended March 31, 2025 results of operations. Financial Highlights for the First Quarter Ended March 31, 2025 Revenues for the first quarter ended March 31, 2025 increased by 8.1% year over year, reaching a first quarter all-time high of $754.7 million, compared to $698.4 million in the same period last year. Operating income for the first quarter ended March 31, 2025 increased by 12.7% year over year, reaching a first quarter all-time high of $70.5 million, compared to $62.6 million in the same period last year. Net income attributable to Formula's shareholders for the first quarter ended March 31, 2025 increased by 12.6% year over year, reaching a first quarter all-time high of $19.3 million, or $1.23 per fully diluted share, compared to $17.2 million, or $1.10 per fully diluted share, in the same period last year. As of March 31, 2025, Formula held 48.14%, 43.50%, 46.71%, 100%, 42.34%, 90.1%, 80%, 100%, 100% and 51% of the outstanding ordinary shares of Matrix IT Ltd., Sapiens International Corporation N.V., Magic Software Enterprises Ltd., Michpal Technologies Ltd., TSG IT Advanced Systems Ltd., Insync Staffing Solutions, Inc., Ofek Aerial Photography Ltd., ZAP Group Ltd., Shamrad Electronic (1997) Ltd., and Hashahar Telecom And Electricity Ltd., respectively. Consolidated cash and cash equivalents and short-term bank deposits totaled approximately $526.8 million as of March 31, 2025, compared to $$563.2 million as of December 31, 2024. Total equity as of March 31, 2025, was $1.38 billion (representing 45.2% of the total consolidated statements of financial position), compared to $1.39 billion (representing 46.1% of the total consolidated statements of financial position) as of December 31, 2024. Declaration of Dividend for the First Quarter of 2025 Based on the Company's results, the Company's board of directors approved the distribution of a cash dividend in an amount of NIS 1.57 per share (approximately $0.44 per share) and in an aggregate amount of approximately NIS 24.1 million (approximately $6.8 million). The dividend is payable on July 22, 2025, to all of the Company's shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on July 7, 2025. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market. 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. Debentures Covenants As of March 31, 2025, Formula was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Target equity attributable to Formula's shareholders (excluding non-controlling interests): above $325 million. Actual equity attributable to Formula's shareholders as of March 31, 2025 was $681.0 million. Covenant 2 Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula's Series C and D Secured Debentures): below 65%. Actual ratio of net financial indebtedness to net capitalization, as of March 31, 2025 was (4.72%). Covenant 3 Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): below 5. Actual ratio of net financial indebtedness to EBITDA as of March 31, 2025 was (0.16). Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: 'Formula Systems group continues to demonstrate strong and consistent performance, making big strides across multiple fronts, as reflected by our first quarter record-breaking results recorded across all key operational financial indices: revenues, gross profit, operating income, net income and EBITDA. These results underscore our commitment to driving sustained growth and operational excellence across all segments of our business. We are pleased with the continued recognition as leaders in our areas of expertise, implementing fast-growing technologies, such as cloud, cyber, digital, data, DevOps, Insure-Tech and AI, which enable us to create significant value for our customers in managing, streamlining, accelerating and making their businesses thrive. We continue to uphold our core values of innovation, professionalism, agility, and transparency across our entire group. These principles enable us to consistently create significant value for our customers, ultimately contributing to their growth'. Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula's stand-alone financial position in reference to its assets and liabilities as the parent company of the group. These financial measures are prepared consistent with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula's share in the investees' accumulated undistributed earnings and other comprehensive income or loss. Formula believes that these financial measures provide useful information to management and investors regarding Formula's stand-alone financial position. Formula's management uses these measures to compare the Company's performance in the current period to that of prior periods for trend analyses. These measures are also 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 stand-alone financial measures provides an additional tool for investors to use in evaluating Formula's financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with GAAP. Formula urges investors to review the consolidated financial statements 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 or financial position. About Formula Formula Systems, whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit Press Contact: Formula Systems (1985) Ltd. +972-3-5389487 ir@ Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words 'anticipate,' 'believe,' 'estimate,' 'expect,' 'may,' 'will,' 'plan' and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers' systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and the telecom, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries' principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading 'Item 3.D Risk Factors' in our most recent Annual Report on Form 20-F for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on May 14, 2025, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations. FORMULA SYSTEMS (1985) LTD. CONSOLIDATED CONDENSED STATEMENTS OF PROFIT OR LOSS U.S. dollars in thousands (except per share data) Three months ended March 31, 2025 2024 Unaudited Revenues 754,682 698,401 Cost of revenues 573,974 534,186 Gross profit 180,708 164,215 Research and development costs, net 21,088 20,217 Selling, marketing and general and administrative expenses 89,076 81,413 Operating income 70,544 62,585 Financial expenses, net 5,538 5,602 Income before taxes on income 65,006 56,983 Taxes on income 15,452 13,458 Income after taxes 49,554 43,525 Share of profit of companies accounted for at equity, net 828 103 Net income 50,382 43,628 Net income attributable to non-controlling interests 31,066 26,469 Net income attributable to Formula Systems shareholders 19,316 17,159 Earnings per share (basic) 1.26 1.12 Earnings per share (diluted) 1.23 1.10 Number of shares used in computing earnings per share (basic) 15,311,924 15,303,267 Number of shares used in computing earnings per share (diluted) 15,729,173 15,570,761 FORMULA SYSTEMS (1985) LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION U.S. dollars in thousands March 31, December 31, 2025 2024 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents 461,805 507,799 Short-term deposits 64,989 55,401 Trade receivables, net 831,108 803,235 Prepaid expenses and other accounts receivable 96,891 89,882 Inventories 27,771 30,728 Total current assets 1,482,564 1,487,045 NON-CURRENT ASSETS: Long-term investments and receivables 59,229 54,629 Deferred taxes 35,627 33,850 Investments in companies accounted for at equity 38,572 39,196 Property, plants and equipment, net 51,851 51,795 Right-of-use assets 151,842 156,225 Intangible assets, net and goodwill 1,225,818 1,192,156 Total non-current assets 1,562,939 1,527,851 Total assets 3,045,503 3,014,896 LIABILITIES AND EQUITY CURRENT LIABILITIES: Loans from banks and others 150,474 141,782 Debentures 87,249 86,782 Current maturities of lease liabilities 44,581 45,240 Trade payables 283,893 296,211 Deferred revenues 180,619 173,959 Employees and payroll accrual 243,683 234,845 Other accounts payable 109,979 98,046 Dividend payable 14,227 - Liabilities in respect of business combinations 11,505 9,191 Put options of non-controlling interests 53,853 52,420 Total current liabilities 1,180,063 1,138,476 LONG-TERM LIABILITIES: Loans from banks and others 73,153 62,733 Debentures 153,840 188,090 Lease liabilities 117,645 119,586 Other long-term liabilities 12,221 11,708 Deferred taxes 45,334 42,894 Deferred revenues 25,934 12,522 Liabilities in respect of business combinations 6,707 8,751 Put options of non-controlling interests 42,908 30,553 Employees benefit liabilities 10,443 10,238 Total long-term liabilities 488,185 487,075 EQUITY Total equity attributable to Formula Systems (1985) Ltd. shareholders 681,020 679,338 Non-controlling interests 696,235 710,007 Total equity 1,377,255 1,389,345 Total liabilities and equity 3,045,503 3,014,896 FORMULA SYSTEMS (1985) LTD. STAND-ALONE STATEMENTS OF FINANCIAL POSITION U.S. dollars in thousands March 31, December 31, 2025 2024 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents 33,361 25,599 Dividend receivable 31,086 12,013 Other accounts receivable and prepaid expenses 5,540 4,798 Total current assets 69,987 42,410 NON-CURRENT ASSETS: Investment in subsidiaries and a jointly controlled entity (*) Matrix IT Ltd. 163,384 162,133 Sapiens International Corporation N.V. 257,263 264,349 Magic Software Enterprises Ltd. 130,152 133,786 TSG IT Advanced Systems Ltd. 19,640 20,453 Michpal Technologies Ltd. 73,902 69,127 ZAP Group 51,520 55,392 Other 48,578 47,722 Total investment in subsidiaries and a jointly controlled entity 744,439 752,962 Other investments and Long term receivables 20,558 24,860 Property, plants and equipment, net 9 10 Total non-current assets 765,006 777,832 Total assets 834,993 820,242 LIABILITIES AND EQUITY CURRENT LIABILITIES: Loans from banks and others 2,251 2,294 Debentures 46,017 45,807 Trade payables 268 1,146 Other accounts payable 3,763 2,109 Put options of non-controlling interests 1,073 1,005 Dividends payable 14,227 - Total current liabilities 67,599 52,361 LONG-TERM LIABILITIES: Loans from banks and others 2,428 3,047 Debentures 83,946 85,496 Total long-term liabilities 86,374 88,543 EQUITY 681,020 679,338 TOTAL LIABILITIES AND EQUITY 834,993 820,242 (*) The investments' carrying amounts are measured consistent with the accounting principles applied in the consolidated financial statements of the group and representing the investments' cost adjusted by Formula's share in the investees' accumulated undistributed earnings and other comprehensive income or in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-04-2025
- Business
- Yahoo
UN cash app for Gazans exploited by Hamas as terror group steals aid money meant for civilians
United Nations agencies' monthly cash transfers to Gaza residents are inadvertently strengthening the Hamas terrorist organization, as the group and affiliated traders continue to control the money flow to the enclave, an expert on Hamas' financial and economic operations said. "Hamas exploits its role as the de facto ruler of Gaza to extract financial gains from aid money sent by U.N. organizations to civilians via apps still operating in the region," Eyal Ofer told Fox News Digital. "The aid system is being manipulated by Hamas and affiliated traders. Hamas does this largely behind the scenes, leveraging their control over large merchants, crime families, and using cash to establish a shadow banking system within Gaza." How Israel's War Against Hamas Terrorists Will Be Different Under Trump Each month, international organizations send significant sums into Gaza's economy. The U.N.'s World Food Programme (WFP) transfers approximately $18.43 million, reaching 82,636 families, with each family receiving an average of $209, according to open-source data. UNICEF's monthly assistance averages $5 million, helping to reach at least 20,000 families every month. "I go to the market and meet people whose job is to provide cash in exchange for a fee," Gaza resident Shahab Yousef told Israel's news agency TPS-IL. "The fee is 20–30%. If I transfer 1,000 shekels [$271] I get back 700 [$190]," he said. "For big purchases, I pay digitally. But at the market, I need cash, and I lose 30 percent every time." Read On The Fox News App Another Gaza resident, Nidal Qawasmeh, expressed similar frustration to TPS-IL. "These people are charging 30 percent just to give you cash. I just want to take care of my family, but everything costs me more because of this. Prices are insane." The specific amount received per family every month is around $270 (or 1,000 New Israeli Shekels), which was calculated as 80% of the Survival Minimum Expenditure Basket, UNICEF told Fox News Digital. Smaller organizations like UNFPA and others also contribute, bringing the total to about $39.66 million per month, reaching 60% of Gaza's households, according to open-source data. Despite the scale of direct financial aid, which reaches over half of the enclave's population, Gaza's severe food insecurity and high inflation (91% and 118%, respectively, as of January 2024) underscore its importance. However, the way this money circulates within Gaza is far more complex. "Hamas controls much of the cash that enters Gaza through various channels," Ofer told Fox News Digital, "People who receive money via mobile apps must convert it into cash to use in local markets, but this involves hefty fees, with many money changers tied to Hamas or its allies." TPS-IL reported that Israel's Foreign Minister Gideon Sa'ar recently warned that Hamas's economic strength in Gaza relies on billions of shekels in cash, paid as salaries and quickly reclaimed through taxes on merchants. In a letter to Bank of Israel Governor Prof. Amir Yaron, Sa'ar urged the cancelation of the circulation of 200-shekel bills previously introduced into Gaza, saying that experts believe the move would severely damage Hamas's financial network. The Bank of Israel rejected the proposal, citing technical reasons and claiming that implementation was not feasible. Ofer's research found that the fees can range from 20% to 35%, meaning recipients lose a significant portion of their aid just to access it. "In videos from Gaza, you can see traders refusing to accept app funds and forcing customers to convert them into cash, knowing they will lose at least 20% in the process," he said. Peter Gallo, an international lawyer and former Office of Internal Oversight Services (OIOS) investigator at the U.N., told Fox News Digital, "If an investigator in Israel can figure it out, the aid agencies either knew or should have known. Twenty to thirty percent is just ridiculous. That's extortion. It's what some have politely described as a 'revolutionary tax.' In fairness, the aid agencies might argue they had no alternative, It is the cost of doing business, but it would have been better if they were honest about it from the start." Hamas Terror Group Reportedly Buckling Under Financial Strain Amid Israeli Military Gains And Growing Unrest A spokesperson for UNICEF told Fox News Digital, "UNICEF is aware of the cash liquidity crisis in Gaza and the continuous shortage of hard cash, which is a direct consequence of the banking system's inability to function amid the ongoing conflict. "Since May 2024, UNICEF has introduced fully digital cash payments via e-wallets, which do not require hard cash at any point. By using e-wallets, recipients of humanitarian digital cash transfers can purchase goods such as food, hygiene items and medicine without ever handling physical money," the spokesperson said. "The use of digital e-wallets can be accessed through an app and works on the most basic smartphones. When implemented, these digital cash payments via e-wallets eliminate the need for cash conversion and, consequently, the payment of any fees. The UNICEF humanitarian digital cash program adheres to the highest standards of neutrality and impartiality. No external party, actor, or agency—not even the beneficiaries themselves—has any role or influence in the design or implementation of the program, including the composition of the beneficiary list, payment schedule, frequency and amounts." The spokesperson claimed: "More than 1.8 million people—close to the entire population of Gaza—are grappling with extreme food insecurity, with at least half of them being children. . . . Acute malnutrition among children is rising at alarming rates. The UNICEF humanitarian cash transfer program is, simply put, keeping children alive in the midst of a war not of their making by providing them with access to essential items for their survival. UNICEF's monthly budget for humanitarian cash transfers in Gaza averages USD 5 million to support approximately 20,000 families. We estimate that these parameters are too small to significantly impact the local economy." The World Food Programme didn't respond to multiple requests for comment. "Turning a blind eye is not acceptable. The U.N. Security Council has been addressing terrorist financing since 2001, yet aid agencies continue to ignore the fact that Hamas is making a profit off this money flow, despite international efforts to stop terrorist financing," Gallo article source: UN cash app for Gazans exploited by Hamas as terror group steals aid money meant for civilians
