Magic Software Enterprises Ltd (NASDAQ: MGIC) recently reported its fourth-quarter financial results, showcasing a revenue decline of 14.7% year-on-year to $125.5 million. Despite the decrease, the company managed to beat the consensus estimate of $117.5 million, which resulted in a positive market response with the stock price gaining after the results were announced.
In addition to the revenue beat, Magic Software also reported adjusted earnings per share (EPS) of $0.24, surpassing the consensus estimate of $0.19. The company’s adjusted gross margin expanded by 150 basis points to 30.8%, while the adjusted operating margin saw a 140 basis points increase to 14.1%.
As of December 31, 2023, Magic Software held $107.1 million in cash and equivalents. The company also saw an improvement in cash flow from operating activities for the year, which amounted to $77.9 million compared to $56.6 million in the previous year.
Guy Bernstein, Chief Executive Officer of Magic Software, expressed optimism despite the challenges faced during the second half of the year, stating, “we remain positive that the vast majority of our customers will continue to value our unique proposition and engage us to an increasing degree as a preferred partner for innovative digital transformation initiatives.”
Looking ahead, Magic Software introduced its 2024 annual revenue guidance of $540.00 million to $550.00 million, significantly higher than the consensus estimate of $473.77 million. This strong outlook contributed to a 6.92% increase in MGIC shares, trading at $11.43 premarket on the last check Wednesday.
Overall, Magic Software’s impressive financial performance and optimistic outlook demonstrate the company’s resilience and ability to navigate challenges in the ever-evolving technology industry. Investors and analysts alike will be closely watching to see how Magic Software continues to innovate and drive growth in the coming months.
