Magic Software Stock Rallies On In-line Q4 EPS, Positive Guidance: Retail Mood Stays Gloomy Amid Going Private Deal

CEO Guy Bernstein said Magic Software continued investment in digital and cloud transformation solutions and expressed confidence in the company’s ability to sustain momentum and drive long-term profitability.

Magic Software Enterprises Ltd. (MGIC) shares rallied Tuesday after the IT consulting services and application development platforms company reported positive fourth-quarter results and guided 2025 revenue above the consensus estimate. The company also confirmed a going-private transaction.  

The Or Yehuda, Israel-based company reported adjusted earnings per share (EPS) of $0.24 for the fourth quarter of the fiscal year 2024, flat compared to the year-ago period and in line with the Finchat-compiled consensus estimate.

Revenue climbed 13.6% year over year to $142.6 million, faster than the 10.4% growth for the third quarter. The topline also exceeded the $137 million consensus estimate.

For the full year, Magic Software reported an adjusted EPS of $0.93 and revenue of $552.5 million, ahead of the consensus estimate of $544 million to $550 million. 

The company's cash flow from operating activities for the year was $74.7 million, compared to $69 million in 2024. The company ended the year with a cash position of $112.8 million.

CEO Guy Bernstein said, “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.”

The company initiated its fiscal year 2025 guidance that calls for revenue of $593 million to $603 million versus the consensus estimate of $566.30 million.

Separately, Magic Software confirmed signing a new memorandum of understanding under which Matrix will acquire its entire share capital through a reverse triangular merger. Upon completion of the deal, Magic Software will become a private company wholly owned by Matrix. 

Late Monday, Magic Software said the two companies were considering a merger. 

On Stocktwits, retail sentiment toward Magic Software stock stayed ‘bearish’ (36/100), and the message volume remained ‘extremely low.’

Magic Software stock rose nearly 6% to $13.60 Tuesday afternoon. The stock has gained about 6.8% so far this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<