Magic Software Enterprises Ltd (MGIC) 2024 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Magic Software Enterprises 2024 fourth quarter and full-year financial results conference call. Magic's fourth quarter 2024 earnings release was issued before the market opened yesterday and it has been posted on the company's website at www.magicsoftware.com. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation.

女士們、先生們，感謝你們的支持。歡迎參加Magic Software Enterprises 2024年第四季及全年財務業績電話會議。Magic 的 2024 年第四季財報於昨日開市前發布，並已在公司網站 www.magicsoftware.com 上發布。此時，所有參與者都處於只聽模式。正式演講之後將有一個簡短的問答環節。

With us on the line today are Magic CEO, Mr. Guy Bernstein; Magic CFO, Mr. Asaf Berenstin; and Magic CTO, Mr. Yuval Lavi. Before we start, I would like to remind everyone that projections or other forward-looking statements may be provided on this conference call. The Safe Harbor provision provided in the press release issued today also applies to the content of this call.

今天與我們一起在線的有 Magic 首席執行官 Guy Bernstein 先生； Magic 首席財務官 Asaf Berenstin 先生；以及 Magic 首席技術官 Yuval Lavi 先生。在我們開始之前，我想提醒大家，本次電話會議可能會提供預測或其他前瞻性陳述。今天發布的新聞稿中規定的安全港條款也適用於本次通話的內容。

Magic expressly disclaims any obligation to update or revise any of these forward-looking statements whether because of future events new information a change in its views or expectations or otherwise. Also during the course of today's call, management will refer to non-GAAP financial measures a reconciliation schedule showing GAAP versus non-GAAP results has been provided in the press release issued before the market opened.

Magic 明確表示不承擔更新或修改任何前瞻性陳述的義務，無論是由於未來事件、新資訊、觀點或預期的變化或其他原因。此外，在今天的電話會議中，管理層將參考非 GAAP 財務指標，並在開市前發布的新聞稿中提供一份顯示 GAAP 與非 GAAP 結果的調整表。

Yesterday, a replay of this call will be available after the call on the investor relations section of the company's website. I will now turn the call over to Mr. Asaf Bernstein, CFO of Magic Software. Please go ahead.

昨天，電話會議結束後，您可以在公司網站的投資者關係部分重播此次電話會議。現在我將電話轉給 Magic Software 的財務長 Asaf Bernstein 先生。請繼續。

Thank you, operator and thank you, everyone for joining us today as we report our fourth quarter in full year 2024 financial results. Before diving into the summary of our financial performance for the year, I would like first to address our recent announcement and its implications.

謝謝接線員，也謝謝大家今天加入我們，我們將報告 2024 年全年第四季的財務表現。在深入介紹我們今年的財務業績之前，我想先談談我們最近的公告及其影響。

On March 10, we announced that we entered into a non-binding memorandum of understanding with Matrix IT, a leading public Israeli IT services company whose shares are traded on the Tel Aviv Stock Exchange as well as a subsidiary of formal systems of controlling shareholder. According to the provision of the MOU, we agreed to negotiate a definitive agreement regarding a merger under which Matrix will acquire our entire share capital on a fully diluted basis by way of a reverse triangular merger.

3月10日，我們宣布與Matrix IT簽署了一份不具約束力的諒解備忘錄，Matrix IT是以色列一家領先的公共IT服務公司，其股票在特拉維夫證券交易所交易，同時也是控股股東正式系統的子公司。根據諒解備忘錄的規定，我們同意就合併事宜進行最終協議談判，根據該協議，Matrix 將透過反向三角合併的方式以完全稀釋的方式收購我們的全部股本。

Upon completion of which, we will become a private company only owned by Matrix. The consideration to our shareholders will be exclusively in the form of Matrix’ ordinary shares which was based on the relative evaluation of both companies. Such that immediately following the merger, Magic shareholders will hold 31.125% of the issues and outstanding share capital of Matrix. And the shareholders who held Matrix shares prior to the merger will hold 68.875%, both on a fully diluted basis.

完成後，我們將成為一家僅由Matrix擁有的私人公司。對我們股東的對價將完全以 Matrix 普通股的形式支付，該形式基於兩家公司的相對評估。合併後，Magic 股東將持有 Matrix 31.125% 的已發行和流通股本。而合併前持有 Matrix 股份的股東將持有 68.875% 的股份，兩者均以完全稀釋後計算。

The combined market capitalization of the combined entity based on share prices prior to the merger announcement stood at $2.1 billion, which implies for a 13% premium on Magic share price prior to the announcement.

根據合併公告前的股價計算，合併後實體的綜合市值為 21 億美元，這意味著比公告前的 Magic 股價高出 13%。

As of today, the combined variation has risen to $2.3 billion. With respect to dividend distributions following the announcement, we and Matrix may continue distributing dividends in accordance with the provisions of our respective distribution policies. And in any event, not more than 75% of our respective net profits attributable to our shareholders.

截至今日，總差額已升至 23 億美元。對於公告後的股利分配，我們和 Matrix 可能會根據各自的分配政策規定繼續分配股利。且無論如何，我們各自的歸屬於股東的淨利不得超過75%。

For the year 2024 and for the first and second quarter of 2025 without it affecting the agreed relative evaluation ratio.

適用於 2024 年以及 2025 年第一季和第二季度，但不影響商定的相對評估比率。

Following the merger, Magic's ordinary shares will be delisted from Nasdaq and from the Tel Aviv Stock Exchange. And Matrix ordinary shares will continue to be traded exclusively on the Tel Aviv Stock Exchange. It should be mentioned that in accordance with statements made by Matrix management, Matrix do intend to explore the possibility in the future of releasing the combined entity shares on Nasdaq in the short or the long term period. Allowing time for Matrix to solidify its joint operation with Magic in the US market and for investors to gain greater familiarity with Matrix business and leadership.

合併後，Magic 的普通股將從納斯達克和特拉維夫證券交易所下市。Matrix 普通股將繼續在特拉維夫證券交易所獨家交易。值得一提的是，根據Matrix管理層的聲明，Matrix確實有意在未來短期或長期探索在納斯達克發行合併後實體股票的可能性。讓 Matrix 有時間鞏固與 Magic 在美國市場的共同運營，並讓投資者更熟悉 Matrix 的業務和領導力。

For those who are less familiar with Matrix, it is Israel's leading IT services company as demonstrated for the 19 years in a row in research report on the Israeli IT market, published by the research companies IDC and SDKI.

對於那些不太熟悉 Matrix 的人來說，它是以色列領先的 IT 服務公司，正如研究公司 IDC 和 SDKI 連續 19 年發布的以色列 IT 市場研究報告所證明的那樣。

Matrix currently employs approximately 11,570 software, hardware, integration engineering, and training personnel, which provide advanced IT services to hundreds of customers in the Israeli market as well as to customers in the US market. Matrix execute some of the largest IT projects in Israel. It develops and implements leading technologies software solutions, and products.

Matrix 目前擁有約 11,570 名軟體、硬體、整合工程和培訓人員，為以色列市場以及美國市場的數百家客戶提供先進的 IT 服務。Matrix 執行了以色列一些最大的 IT 專案。它開發並實施領先技術的軟體解決方案和產品。

Matrix provide infrastructure and consulting services outsourcing offshore, near shore, training, and assimilation services. Matrix represent and markets leading software vendors among its customers are most of the leading Israeli organizations and companies in the industry. Retail, banking and finance, education and academy, high tech, and startups, transportation, defense healthcare, and the governmental and public sectors. But it's also market sales and distribute software solutions and hardware representing a wide variety of software vendors from Israel and around the world.

Matrix 提供基礎設施和諮詢服務外包、離岸、離岸、培訓和同化服務。Matrix 代表並銷售領先的軟體供應商，客戶包括該行業大多數領先的以色列組織和公司。零售、銀行和金融、教育和學術、高科技和新創企業、交通運輸、國防醫療保健以及政府和公共部門。但它也負責市場銷售和分銷軟體解決方案和硬件，代表來自以色列和世界各地的各種軟體供應商。

In light of the fact that formulae is considered the controlling shareholder of both our company and Matrix. Since it holds approximately 47% and 48% of the outstanding ordinary shares of each respective company our Board of Directors in accordance with Israeli Companies Law appointed an independent committee who established orderly work procedures to independently evaluate the deal conduct a thorough and comprehensive work process. Including an analysis of our available alternatives including the option not to proceed with the merger and engage in negotiation with Matrix independent committee regarding the terms of the merger.

鑑於 Formulae 被視為我們公司和 Matrix 的控股股東。由於持有各自公司約47%和48%的流通普通股，我們的董事會根據以色列公司法任命了一個獨立委員會，該委員會建立了有序的工作程序，獨立評估該交易，進行徹底而全面的工作流程。包括對我們可用替代方案的分析，包括不繼續合併的選項以及與 Matrix 獨立委員會就合併條款進行談判。

Following the negotiations, the MOU was approved by the committee and by a Board of Directors without the presence of any of the representatives of formula systems based on the committee's recommendation and following its approval.

經過談判，諒解備忘錄得到了委員會和董事會的批准，董事會根據委員會的建議並經過批准，沒有任何配方體係代表出席。

This marks a pivotal moment in our company's journey. One that we believe will create tremendous value for investors, customers, and employees alike. This merger is a strategic milestone that brings together the leading technology firms to form a global IT powerhouse. The combined entity is expected to be among the top publicly listed IT service companies both in the US and in Europe. And will benefit from increased scale operational synergies and expanded service portfolio.

這是我們公司發展歷程中的關鍵時刻。我們相信這將為投資者、客戶和員工創造巨大的價值。此次合併是一個策略里程碑，將使領先的科技公司聯合起來形成一個全球性的IT巨頭。合併後的公司預計將成為美國和歐洲頂級上市 IT 服務公司之一。並將受益於規模營運協同效應的增強和服務組合的擴大。

From an accounting perspective the merger will be reported under the pooling of interest method in metric financial statements. This means all assets and liabilities will be recorded at book value. No additional goodwill, no identifiable intangible assets will be recognized upon the acquisition. And as such, there would be no subsequent amortization of intangible assets following the deal on the combined entities’ report. We believe this structure maximize shareholders' value by ensuring a transparent and fair evaluation process while maintaining a strong financial position for the combined entity.

從會計角度來看，合併將在公制財務報表中依照權益池法進行報告。這意味著所有資產和負債都將以帳面價值記錄。收購時不會確認任何額外的商譽或可辨認的無形資產。因此，合併後實體的報表中不會出現交易後無形資產的後續攤銷。我們相信，這種結構可以確保評估過程透明、公平，同時維持合併後實體的強勁財務狀況，從而實現股東價值最大化。

As for the combined entities 2024 key former financial indicators based on the financial results of both companies, the merger will result in a combined company generating over $2 billion in annual revenues with approximately 17% of revenues from the US market and 78% from Israel.

至於合併後實體2024年的關鍵前財務指標，根據兩家公司的財務業績，合併將使合併後的公司年收入超過20億美元，其中約17%的收入來自美國市場，78%的收入來自以色列。

Gross profit of $382 million with an 18.6% gross margin. Operating income of $183 million reflecting approximately 9% operating margin with an EBITDA of approximately $217 million reflecting EBITDA margin of over 10%.

毛利為3.82億美元，毛利率為18.6%。營業收入為 1.83 億美元，反映營業利潤率約 9%，EBITDA 約 2.17 億美元，反映 EBITDA 利潤率超過 10%。

Net income attributed to non-controlling interest of $110.6 million with a 5.4% net margin. Post-merger the combined entity will employ over 15,000 professionals operate across dozens of countries and serve a customer base of over 6,000 clients. The key driver of growth or Magic within the merged organization will be cost selling opportunities leveraging Matrix extensive product and service offering to expand Magic reach and revenue potential.

歸屬於非控制權益的淨收入為 1.106 億美元，淨利率為 5.4%。合併後的公司將僱用超過 15,000 名專業人員，業務遍及數十個國家，為超過 6,000 個客戶提供服務。合併後組織內 Magic 成長的關鍵驅動力將是利用 Matrix 廣泛的產品和服務提供的成本銷售機會來擴大 Magic 的覆蓋範圍和收入潛力。

In summary, this transaction is far more than just a combination of two companies. It is a transformational move that would strengthen Magic's market position, expand its capabilities, and enhance value for its shareholders. The combination of Magic and Matrix is expected to generate significant benefits to increased scale complementary geographic presence and a broader product and service portfolio.

總而言之，這筆交易遠不止是兩家公司的合併。這是一項轉型舉措，將加強 Magic 的市場地位、擴大其能力並提高股東價值。Magic 和 Matrix 的結合預計將為擴大規模、增強地理覆蓋、拓寬產品和服務組合帶來顯著效益。

It will create a larger and more resilient IT service and software solution organization enhancing our position with large enterprise clients, particularly in the in the Israeli and the US market. It will allow us to better position to compete on a global scale, leveraging a stronger brand a larger customer base and a broader suite of solutions and service offerings.

它將創建一個更大、更有彈性的 IT 服務和軟體解決方案組織，增強我們在大型企業客戶中的地位，特別是在以色列和美國市場。它將使我們在全球範圍內擁有更好的競爭優勢，利用更強大的品牌、更大的客戶群和更廣泛的解決方案和服務產品。

We possess a well established international presence already today, particularly in the US while Matrix holds the dominant market position in Israel. The measure will allow both companies to leverage each other's strengths to expand geographic reach and enhance international client engagement and delivery with clients from both companies benefiting from a broader spectrum of technology solutions, software products, and IT services, and a single unified organization.

如今，我們已經擁有了良好的國際影響力，尤其是在美國，而 Matrix 在以色列佔據主導市場地位。此舉將使兩家公司能夠利用彼此的優勢來擴大地理覆蓋範圍並增強國際客戶的參與度和交付能力，兩家公司的客戶都將受益於更廣泛的技術解決方案、軟體產品和 IT 服務以及統一的組織。

Magic customers will gain access to a broader more comprehensive range of IT services and solutions. Magic's low-code, no-code application development platform will be com complemented by Matrix IT service and system integration expertise.

Magic 客戶將獲得更廣泛、更全面的 IT 服務和解決方案。Magic 的低程式碼、無程式碼應用程式開發平台將與 Matrix IT 服務和系統整合專業知識相輔相成。

Although Magic will be delisted from trading on Nasdaq the combined entity will continue to be traded exclusively on the Tel Aviv Stock Exchange with the potential to be included in the prestige Tel Aviv 35 share index that tracks the performance of the 35 largest companies by market capitalization listed on the Tel Aviv Stock Exchange serving as a barometer for the Israeli economy.

儘管Magic 將從納斯達克退市，但合併後的實體將繼續在特拉維夫證券交易所獨家交易，並有可能被納入著名的特拉維夫 35 股票指數，該指數追踪特拉維夫證券交易所上市的市值最大的 35 家公司的表現，成為以色列經濟的晴雨表。

The lease is updated twice a year in August and in February and once. And if the merger is concluded we would have the potential to be included in it.

租約每年更新兩次，分別在八月和二月。如果合併完成，我們就有可能被納入其中。

Looking ahead while the merger processes is under while the merger process is underway and is expected to continue at least into the third quarter of the year, we remain focused on seamless execution maintaining business continuity, and driving long-term shareholder value and we'll continue to update you as we achieve key milestones in this process.

展望未來，合併過程正在進行中，預計至少會持續到今年第三季度，我們將繼續專注於無縫執行，保持業務連續性，並推動長期股東價值，我們將在此過程中取得關鍵里程碑時繼續向您通報最新情況。

Turning to our financial performance for the quarter. Revenue in the fourth quarter of 2024 increased to $142.6 million, up approximately 13.6% from the fourth quarter of 2023. This quarter, despite few billable days in Israel, accounting for 5% of revenues compared to the same period last year due to the timing of the Jewish New Year holidays resulted due to the strong execution in a revenue increase of 15.5%,all organic. Primarily resulted from strong demand for our cloud devo AI services along with continued strong demand for our services in the defense sector.

談談我們本季的財務業績。2024 年第四季營收增至 1.426 億美元，較 2023 年第四季成長約 13.6%。本季度，儘管在以色列的計費天數不多，但由於正值猶太新年假期，與去年同期相比，收入僅佔 5%，但由於執行力強勁，收入增長了 15.5%，且全部為有機增長。主要是由於對我們的雲端開發 AI 服務的強勁需求以及對我們在國防部門的服務的持續強勁需求。

Our North American operation increased by approximately 14% resulting from an addition of Theories Inc., acquired in April of 2024. Excluding theories revenues in North America remain stable. And while the US market has yet to show a full recovery we anticipate positive momentum fueled by economic improvements. We are confident that we are on the right path and momentum is building.

由於 2024 年 4 月收購了 Theories Inc.，我們的北美業務成長了約 14%。排除理論因素，北美的收入保持穩定。儘管美國市場尚未完全復甦，但我們預期經濟改善將推動市場出現正面動能。我們堅信我們正走在正確的道路上，而且勢頭正在增強。

We continue to plow forward with a worldwide dedication and confidence that we can continue to execute on sales of our world-class suit of products and in providing related services. Our AI low-code, no-code, and service offering are critical as customers continue to automate and digitize their systems and products. And while some of our US customers were and may still be facing macro and company specific challenges the improvement in our top line results reflects that the vast majority of our customers continue to value our unique proposition and resume to engage us to an increasing degree as a preferred.

我們將繼續以全球奉獻精神和信心向前邁進，我們能夠繼續銷售我們世界一流的產品並提供相關服務。隨著客戶不斷實現其係統和產品的自動化和數位化，我們提供的 AI 低程式碼、無程式碼和服務至關重要。儘管我們的一些美國客戶過去和現在可能都面臨著宏觀和公司特定的挑戰，但我們營收業績的改善反映出，絕大多數客戶仍然重視我們獨特的主張，並將繼續越來越多地將我們作為首選客戶。

Partner for innovative digital transformation initiative. As we look at our business, we see that we continue to leverage our digital technologies and cloud-based platforms to create strong demand for our innovative software solutions and services. We similarly continue to see excellent execution by our team.

創新數位轉型計畫的合作夥伴。審視我們的業務，我們發現我們繼續利用我們的數位技術和基於雲端的平台來為我們的創新軟體解決方案和服務創造強勁的需求。同樣，我們也繼續看到我們的團隊表現出色。

Setting aside the factors that slowed us down our revenues in North America which were beyond our control, we experienced another quarter of solid performance recorded across all other parts of our business. We continue to see exciting opportunities and growth potential in the dynamic realm of cloud technology and services.

撇開那些我們無法控制的導致北美收入成長放緩的因素不談，我們業務的所有其他部分又經歷了一個穩健的季度。我們繼續看到雲端技術和服務這一動態領域中令人興奮的機會和成長潛力。

We have made it our vision to help business choose the best cloud migration strategy and avoid the pitfalls associated with moving to the cloud. We apply instant industry leading best practices to ensure that our clients cloud development meet the highest standards of performance scalability, security, and reliability.

我們的願景是幫助企業選擇最佳的雲端遷移策略並避免遷移到雲端所帶來的陷阱。我們採用業界領先的最佳實踐，以確保我們的客戶雲端開發符合最高的效能可擴展性、安全性和可靠性標準。

A suit of managed cloud services is designed to address critical aspects of cloud operation and client business continuity enabling a client to focus on the competencies while leaving the management and optimization of the cloud and IT system environment to us.

一套託管雲端服務旨在解決雲端營運和客戶業務連續性的關鍵方面，使客戶能夠專注於能力，同時將雲端和 IT 系統環境的管理和最佳化交給我們。

Our revenues from cloud services increased in 2024 for the whole year by 45% year over year. We have over 400 satisfied customers across various industries and geographies who trust us with the cloud journey. We are committed to delivering excellence innovation and value to our customers. And we are confident that we can help them achieve their cloud goal.

2024年我們全年雲端服務營收年增45%。我們擁有來自不同產業和地區的 400 多家滿意客戶，他們信任我們，相信我們能幫助我們實現雲端之旅。我們致力於為客戶提供卓越的創新和價值。我們有信心幫助他們實現雲端目標。

Proceeding to adjust the fourth quarter geographic revenue breakdown. In the fourth quarter of 2024, our revenues in North America increased by 14.2% from $51.3 million to $58.6 million. Excluding M&As, our revenue in North America remained unchanged and accounted for 41% of our overall quarterly revenue.

繼續調整第四季地理收入分佈。2024年第四季，我們在北美的營收從5,130萬美元成長14.2%至5,860萬美元。除併購外，我們在北美的營收保持不變，占我們整個季度營收的 41%。

Revenues from our Israeli operations amounted to $62.7 million, up by 15.5%, compared to $54.3 million reported on the same period last year. This demonstrate a strong performance in the region and they reconfirms our long-term strategic decision to focus on mature, stable, and technology-driven sector,s which allows us to fully compensate for the flow that we experience from the second half of 2023 in North America. Revenues from our Israeli operations accounted for 44% of our overall quarterly revenue. Turning now to profitability. A non-GAAP gross margin for the fourth quarter of 2024 amounted to 30.3% of revenues or $43.2 million compared to 30.8% in the corresponding quarter of 2023 or $38.6 million for the same period last year. The breakdown of our revenue mix for the first quarter of 2024 was approximately 17% related to our software solutions, with a gross margin of approximately 62% and 83% related to our professional services with a gross margin of approximately 23.8%. A non-GAAP operating income for the first quarter of 2024 increased by 6.1% to $18.8 million compared to $17.7 million in the same period last year.

我們以色列業務的營收達到 6,270 萬美元，比去年同期的 5,430 萬美元成長 15.5%。這表明該地區表現強勁，並再次證實了我們專注於成熟、穩定和技術驅動的行業的長期戰略決策，這使我們能夠充分彌補 2023 年下半年在北美經歷的流量。我們以色列業務的收入占我們季度總收入的 44%。現在談談獲利能力。2024 年第四季非 GAAP 毛利率為營收的 30.3% 或 4,320 萬美元，而 2023 年同期為 30.8% 或去年同期為 3,860 萬美元。我們 2024 年第一季的營收組成細分為：約 17% 來自軟體解決方案，毛利率約為 62%；83% 來自專業服務，毛利率約為 23.8%。2024 年第一季非 GAAP 營業收入較去年同期的 1,770 萬美元成長 6.1% 至 1,880 萬美元。

Financial expenses. During the quarter, we have financial expenses of $1.5 million compared to $1.9 million. The decrease in our financial expenses is mainly resulted from the continued decrease of our overall financial debt during 2024 from $82 million to $59 million at the end of the year.

財務費用。本季度，我們的財務支出為 150 萬美元，而去年同期為 190 萬美元。我們的財務費用的減少主要是由於我們的整體財務債務在 2024 年期間持續減少，從 8,200 萬美元減少到年底的 5,900 萬美元。

Net income attributed to non-controlling interest as a business combination model occasionally relies on keeping former shareholders in acquired entities. As minority stakeholders in the addition in addition to the managerial role in such entities we are allocating a portion of our net income to these minority shareholders. Non-GAAP net income attributed to non-controlling interest increased to $2.1 million compared to $1.5 million for the same period last year.

由於企業合併模式有時依賴於保留被收購實體中的前股東，因此歸屬於非控制權益的淨收入。作為此類實體中的少數股東，除了擔任管理職務外，我們還將部分淨收入分配給這些少數股東。非公認會計準則下歸屬於非控制權益的淨收入增至 210 萬美元，去年同期為 150 萬美元。

Non-GAAP net income for the fourth quarter decreased by 0.5% to $11.5 million or $0.24 for a fully diluted share compared to $11.6 million or $0.24 a fully diluted share in the same period last year.

第四季非公認會計準則淨收入為 1,150 萬美元，即每股攤薄收益 0.24 美元，較去年同期的 1,160 萬美元或每股攤薄收益 0.24 美元下降 0.5%。

Turning now to fully resolves for the 12 months that ended December 31 2024 revenues for the whole year increased by 3.3% to $552.5 million compared to $535.1 million in 2023.

現在來看看截至 2024 年 12 月 31 日的 12 個月的完整解決方案，全年營收與 2023 年的 5.351 億美元相比成長 3.3%，達到 5.525 億美元。

A non-GAAP gross margin for the year amounted to 29.4% or $162.6 million, down 20 basis points from 29.6% or $158.8 million in 2023.

全年非公認會計準則毛利率為 29.4% 或 1.626 億美元，較 2023 年的 29.6% 或 1.588 億美元下降 20 個基點。

The breakdown of our revenue mix for the whole year was 18% related to our software solution with gross margin of approximately 64% and 82% related to our professional services with a gross margin of approximately 22%.

我們全年的收入組成如下：18%來自軟體解決方案，毛利率約為 64%；82%來自專業服務，毛利率約為 22%。

The breakdown of our gross profit mix for the year was approximately 39% related to our software solution and 61% related to our professional services.

在我們今年的毛利組成中，約有 39% 來自軟體解決方案，61% 來自專業服務。

Non-GAAP operating income for the year increased by 2.5% to $73.6 million compared to $71.8 million in the same period last year. Non-GAAP net income attributed to non-controlling interest increased to $8.2 million compared to $7.2 million in 2023.

本年度非公認會計準則營業收入為 7,360 萬美元，較去年同期的 7,180 萬美元成長 2.5%。歸屬於非控制權益的非公認會計準則淨收入從 2023 年的 720 萬美元增至 820 萬美元。

Non-GAAP net income attributed to Magic software shareholders for the year decreased by 5.7% to $45.7 million or $0.93 for fully diluted share compared to $48.4 million or $0.99 for fully diluted share in the same period last year.

本年度歸屬於Magic軟體股東的非公認會計準則淨利為4,570萬美元，即每股攤薄收益0.93美元，而去年同期的非公認會計準則淨利為4,840萬美元，即每股攤薄收益0.99美元，下降5.7%。

Turning now to the balance sheet, as of December 31, 2024, our cash in cash equivalent and short-term bank deposit amounted to approximately $112.8 million compared to $106.7 million as of December 31, 2023. Our total financial debt as of December 31, 2024 amounted to approximately $59 million compared to $81 million as of the December 31, 2023.

現在來看資產負債表，截至 2024 年 12 月 31 日，我們的現金等價物和短期銀行存款約為 1.128 億美元，而截至 2023 年 12 月 31 日為 1.067 億美元。截至 2024 年 12 月 31 日，我們的總金融債務約為 5,900 萬美元，而截至 2023 年 12 月 31 日為 8,100 萬美元。

A cash flow from operating activities for the year ended in 2024 was $74.7 million compared to $69 million for the same period last year.

截至 2024 年的年度經營活動現金流為 7,470 萬美元，去年同期為 6,900 萬美元。

In accordance with our dividend distribution policy our Board of Directors declared the semi-annual cash dividend in an amount of $32.07 per share and in and in an aggregate amount of approximately $16.1 million, which together with the dividend distributed for the first half of 2024 in an amount of approximately $11.5 million reflects 75% of Magic net income attributable to its shareholders for the year.

根據我們的股息分配政策，董事會宣布派發每股 32.07 美元的半年現金股息，總額約為 1,610 萬美元，加上 2024 年上半年派發的約 1,150 萬美元的股息，佔當年歸屬於 Magic 股東的淨收入的 75%。

In closing I would like to turn our guidance for 2025. As we are witnessing a healthy demand and developing a growing pipeline to deliver continued growth in 2025, we anticipate the revenue in the range of between $593 million and $603 million based on current currency exchange rate reflecting an annual growth of 7.3% to 9.1% compared to the prior year.

最後，我想談談我們對 2025 年的指導。由於我們看到了健康的需求並開發了不斷增長的管道以實現 2025 年的持續增長，我們預計收入將在 5.93 億美元至 6.03 億美元之間（基於當前貨幣匯率），與上一年相比年增長率為 7.3% 至 9.1%。

Magic software has navigated a dynamic environment -- with the resilience and adaptivity of extending AI-driven solution, cloud transformation expertise. And so execution have positioned us for continued success.

Magic 軟體已在動態環境中導航——具有擴展 AI 驅動解決方案和雲端轉換專業知識的彈性和適應性。因此，執行使我們獲得了持續的成功。

With the Matrix merger on the horizon we believe that the combined entity will be a global leader in the IT services delivering strong shareholder value, enhanced customer solutions, and greater innovation. We remain confident and excited about the road ahead and will continue executing our strategy to drive sustainable, long-term growth. I will now turn the call over to operator for the questions.

隨著 Matrix 合併的臨近，我們相信合併後的實體將成為 IT 服務的全球領導者，提供強大的股東價值、增強的客戶解決方案和更大的創新。我們對未來的道路充滿信心和興奮，並將繼續執行我們的策略，推動可持續的長期成長。現在我將把電話轉給接線員來回答問題。

(Operator Instructions)

（操作員指示）

Chris Reimer, Barclays.

巴克萊銀行的克里斯雷默 (Chris Reimer)。

Yeah, hi. Thanks for taking my questions and congratulations on the strong quarter. I was wondering if you could talk about some of the drivers behind your guidance. What are some of the things that are giving you the confidence in the 8% mid-point for 2025?

是的，你好。感謝您回答我的問題，並祝賀本季業績強勁。我想知道您是否可以談談您指導背後的一些驅動因素。哪些因素讓您對 2025 年 8% 的中點成長充滿信心？

Basically, as you saw through the year, we managed to improve our results. And increase our backlog from one quarter to the other. We are starting we basically finished Q4 very strong. In terms of our cloud services the our operations in the defense sector. All of these the potential that we have and the our expectation to create a new revenues coming from AI consulting deals. All of that for us the pivotal instrument to increase our revenues also for next year.

基本上，正如您在今年看到的，我們設法提高了我們的業績。並將我們的積壓訂單從一個季度增加到另一個季度。我們剛剛開始，基本上以非常強勁的勢頭結束了第四季度。就我們的雲端服務而言，我們在國防部門開展業務。所有這些都是我們所擁有的潛力，也是我們期望透過人工智慧諮詢交易創造新收入的期望。對我們來說，所有這些都是增加明年收入的關鍵手段。

And how should we be looking at expenses given the higher growth environment?

在更高的成長環境下，我們該如何看待開支？

I'll say that on the payroll side of the business, which is the significant cost item on our P&L, things are relatively stable. Though again we start to see the improvement in the Israeli market and the return of the capital investment to the Israeli market. Now, that things are seems to be to be a little bit more stable. To create again some pressure on payroll.

我想說的是，在業務的薪資方面，也就是我們損益表中的重要成本項目，情況相對穩定。不過，我們再次看到以色列市場的改善以及資本投資向以色列市場的回歸。現在，情況似乎稍微穩定了一些。再次對工資產生一些壓力。

You need to remember that the employees for the last two years were pretty stagnant in the payroll increases. But I think that over the years, we managed to show that we are -- we managed to maintain our operational margins and see that we control cost in the same level that we improve the top line of the company.

您需要記住，過去兩年員工的薪資成長相當停滯。但我認為，多年來，我們成功地證明了我們——我們成功地維持了我們的營運利潤率，並確保我們將成本控制在與公司營業額提高相同的水平。

Got it. Thanks. That's really helpful. That's it for me.

知道了。謝謝。這真的很有幫助。對我來說就是這樣。

Maggie Nolan, William Blair.

瑪吉諾蘭、威廉布萊爾。

Thank you. I was hoping to take a little bit more long-term view. Would love to understand for the joint company if possible, where the kind of long term growth drivers are in terms of end markets or geographies. And if you're unable to give additional color there, maybe from the Magic perspective what you think will really carry the business over more of a multi-year period.

謝謝。我希望能夠有更長遠的眼光。如果可能的話，我很想了解合資公司的終端市場或地理方面的長期成長動力在哪裡。如果您無法提供更多細節，也許從魔術的角度來看，您認為什麼才能真正推動業務發展多年。

I would say that I think that the main drivers of the rules going forward is basically based on the infrastructure of Magic. Because Magic has all the infrastructure ready in order to boost other markets. Matrix of course can bring to the table all the relationship with all the big and giant vendors. And of course expand the offering that the Magic operation can deal with.

我想說的是，我認為未來規則的主要驅動力基本上是基於魔術的基礎設施。因為Magic已經準備好了所有基礎設施來推動其他市場的發展。當然，Matrix 可以與所有大型和巨型供應商建立良好的關係。當然，也要擴大魔術操作所能處理的範圍。

Thank you. And how do you expect your AI solutions to evolve over the next year or so? And anything you can share with us in terms of expectations for adoption levels of AI maybe in the next year versus what you saw in the past year and how you see that progressing? Thank you.

謝謝。您預計您的人工智慧解決方案在未來一年左右會如何發展？您能否與我們分享對明年人工智慧採用水準的預期，與過去一年相比，您認為未來將如何發展？謝謝。

Oh okay. So all in all we are not treating this as a startup company. We have our own product that we developed that should help organizations to approach the AI technologies into their way of doing business. We see that the big corporations are still hesitating, trying some small stuff in order to check it and to see how it works.

哦好的。總而言之，我們不會將其視為一家新創公司。我們開發了自己的產品，可以幫助組織將人工智慧技術融入他們的業務運作方式中。我們看到大公司仍在猶豫，嘗試一些小東西來檢查它並看看它是如何運作的。

But at the end, we will transform this into a business with a big organization. This is the audience that we work with and this is what we target and then by the way this is the easiest way for us because most of them do not know how to approach it.

但最終，我們將會將其轉變為一個擁有大型組織的企業。這是我們合作的受眾，也是我們的目標，順便說一下，這對我們來說是最簡單的方法，因為大多數人不知道如何處理它。

And from the technology point of view, I can add that we're looking as a vendor of a development platform looking deeply into the kind of dramatic change that the GenAI SDLC is bringing to the software development life cycle and taking our low-code tool to actually their next generation of prompt-based tooling and the speed up development. Which we do believe that the GenAI development method will revolutionize the industry of software development. And we utilize it internally for ourselves as well at the moment.

從技術角度來看，我可以補充一點，作為開發平台的供應商，我們正在深入研究 GenAI SDLC 為軟體開發生命週期帶來的巨大變化，並將我們的低程式碼工具帶入下一代基於提示的工具並加快開發速度。我們確實相信 GenAI 開發方法將徹底改變軟體開發產業。目前我們也在內部使用它。

Got it thank you, and congrats on the quarter and congrats on your announcement as well.

明白了，謝謝，恭喜本季取得佳績，也恭喜你的公告。

Thank you.

謝謝。

Thank you.

謝謝。

(Operator Instructions) There are no further questions at this time. Mr. Bernstein, would you like to make a concluding statement?

（操作員指示）目前沒有其他問題。伯恩斯坦先生，您願意做最後發言嗎？

So thank you, everybody for joining our call with another quarter that the business is improving. I know that you're maybe excited, maybe concerned by the news. But all in all, it should boost both companies and can give a really significant upside. So thank you, and hope to see you in the next one. Thank you.

所以，感謝大家參加我們的電話會議，我們了解到另一個季度的業務正在改善。我知道你可能對這個消息感到興奮，也可能感到擔憂。但總而言之，這將促進兩家公司的發展，並帶來顯著的收益。所以謝謝你，希望下次還能見到你。謝謝。

Thank you. This concludes the Magic Software Enterprises' LTD 2024 fourth-quarter results conference call. Thank you for your participation. You may go ahead and disconnect.

謝謝。至此，Magic Software Enterprises LTD 2024 年第四季業績電話會議結束。感謝您的參與。您可以繼續並斷開連線。