Revenue growth has accelerated to 13.1% as of 2025Q3, though structural constraints keep gross margins anchored near the 28% level due to the firm's professional services focus.
| Metric | TTM | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 | Dec'95 |
|---|
| Sales/Revenue | 603.22M | 552.52M | 535.05M | 566.79M | 480.32M | 371.19M | 325.63M | 284.38M | 257.99M | 201.65M | 176.03M | 164.3M | 144.96M | 126.38M | 113.33M | 88.58M | 55.35M | 61.98M | 58.43M | 61.73M | 60.99M | 65.17M | 63.39M | 60M | 76.56M | 90.26M | 63.99M | 38.8M | 37.4M | 36.4M | 25.4M |
| Revenue Growth % | 12.65% | 3.26% | -5.6% | 18% | 29.4% | 13.99% | 14.51% | 10.23% | 27.94% | 14.55% | 7.14% | 13.35% | 14.7% | 11.52% | 27.94% | 60.03% | -10.7% | 6.08% | -5.34% | 1.21% | -6.41% | 2.8% | 5.64% | -21.63% | -15.17% | 41.04% | 64.93% | 3.74% | 2.75% | 43.31% | 18.69% |
| Cost of Goods Sold | 434.05M | 394.69M | 382.06M | 411.44M | 347.33M | 261.6M | 223.5M | 195.56M | 175.16M | 133.28M | 113.22M | 99.73M | 85.89M | 73.39M | 67.26M | 51.45M | 26.26M | 27.14M | 27.34M | 28.72M | 26.68M | 25.48M | 24.14M | 28.99M | 36.54M | 33.86M | 15.27M | 12.5M | 12.1M | 9.3M | 4.5M |
| COGS % of Revenue | - | 71.44% | 71.41% | 72.59% | 72.31% | 70.48% | 68.64% | 68.77% | 67.89% | 66.1% | 64.32% | 60.7% | 59.25% | 58.07% | 59.35% | 58.08% | 47.45% | 43.79% | 46.79% | 46.53% | 43.74% | 39.1% | 38.08% | 48.32% | 47.73% | 37.51% | 23.86% | 32.22% | 32.35% | 25.55% | 17.72% |
| Gross Profit | 169.17M | 157.18M | 152.99M | 155.35M | 132.99M | 109.59M | 102.13M | 88.82M | 82.83M | 68.36M | 62.81M | 64.58M | 59.06M | 52.99M | 46.07M | 37.13M | 29.09M | 34.84M | 31.09M | 33.01M | 34.31M | 39.69M | 39.25M | 31.01M | 40.02M | 56.4M | 48.72M | 26.3M | 25.3M | 27.1M | 20.9M |
| Gross Margin % | 28.04% | 28.45% | 28.59% | 27.41% | 27.69% | 29.52% | 31.36% | 31.23% | 32.11% | 33.9% | 35.68% | 39.3% | 40.75% | 41.93% | 40.65% | 41.92% | 52.55% | 56.21% | 53.21% | 53.47% | 56.26% | 60.9% | 61.92% | 51.68% | 52.27% | 62.49% | 76.14% | 67.78% | 67.65% | 74.45% | 82.28% |
| Gross Profit Growth % | - | 2.74% | -1.52% | 16.81% | 21.35% | 7.31% | 14.99% | 7.23% | 21.16% | 8.84% | -2.74% | 9.33% | 11.47% | 15.01% | 24.08% | 27.66% | -16.52% | 12.07% | -5.81% | -3.81% | -13.54% | 1.11% | 26.56% | -22.51% | -29.04% | 15.76% | 85.25% | 3.95% | -6.64% | 29.67% | 16.76% |
| Operating Expenses | 104.61M | 96.59M | 95.88M | 94.04M | 79.25M | 67.92M | 68.48M | 57.12M | 56.53M | 46.68M | 41.38M | 42.3M | 39.94M | 36.58M | 31.35M | 27.79M | 24.83M | 30.57M | 29.81M | 36.29M | 38.58M | 36.39M | 35.59M | 36.03M | 74.23M | 53.41M | 37.65M | 29.5M | 29.5M | 24.6M | 21.2M |
| OpEx % of Revenue | - | 17.48% | 17.92% | 16.59% | 16.5% | 18.3% | 21.03% | 20.09% | 21.91% | 23.15% | 23.5% | 25.74% | 27.55% | 28.94% | 27.67% | 31.38% | 44.86% | 49.33% | 51.01% | 58.79% | 63.25% | 55.84% | 56.14% | 60.05% | 96.95% | 59.17% | 58.83% | 76.03% | 78.88% | 67.58% | 83.46% |
| Selling, General & Admin | 90.94M | 84.11M | 85.31M | 83.95M | 69.37M | 59.13M | 60.24M | 51.42M | 49.59M | 41.34M | 36.49M | 39.1M | 36.23M | 33.63M | 29.31M | 25.72M | 23.52M | 28.22M | 27.09M | 32.35M | 34.84M | 32.54M | 30.81M | 30.69M | 46.6M | 47.46M | 31.18M | 23.9M | 23.6M | 20.1M | 20M |
| SG&A % of Revenue | - | 15.22% | 15.94% | 14.81% | 14.44% | 15.93% | 18.5% | 18.08% | 19.22% | 20.5% | 20.73% | 23.8% | 24.99% | 26.61% | 25.86% | 29.04% | 42.49% | 45.54% | 46.36% | 52.41% | 57.13% | 49.93% | 48.61% | 51.15% | 60.86% | 52.58% | 48.72% | 61.6% | 63.1% | 55.22% | 78.74% |
| Research & Development | 14.48M | 13.31M | 10.33M | 10.09M | 8.99M | 8.79M | 8.24M | 5.7M | 6.94M | 5.84M | 4.89M | 4.75M | 3.71M | 2.95M | 2.05M | 2.07M | 1.31M | 2.35M | 2.72M | 3.94M | 3.73M | 3.85M | 4.78M | 5.34M | 7.55M | 5.95M | 2.95M | 2.8M | 3.3M | 2.6M | 0 |
| R&D % of Revenue | - | 2.41% | 1.93% | 1.78% | 1.87% | 2.37% | 2.53% | 2% | 2.69% | 2.9% | 2.78% | 2.89% | 2.56% | 2.33% | 1.81% | 2.34% | 2.37% | 3.79% | 4.65% | 6.39% | 6.12% | 5.9% | 7.53% | 8.89% | 9.86% | 6.59% | 4.61% | 7.22% | 8.82% | 7.14% | - |
| Other Operating Expenses | -803K | -829K | 240K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 8K | -67K | -12K | 136K | 125K | 159K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 20.08M | 0 | 3.52M | 2.8M | 2.6M | 1.9M | 1.2M |
| Operating Income | 65.2M | 61.24M | 57.11M | 61.38M | 51.23M | 40.59M | 33.65M | 31.7M | 25.96M | 20.86M | 21.43M | 20.73M | 19.13M | 16.41M | 14.72M | 9.34M | 4.26M | 4.27M | 1.28M | -6.71M | -4.26M | 3.3M | 3.66M | -6.14M | -40.82M | 529K | 11.08M | -3.2M | -4.2M | 2.5M | -300K |
| Operating Margin % | 10.81% | 11.08% | 10.67% | 10.83% | 10.67% | 10.93% | 10.33% | 11.15% | 10.06% | 10.34% | 12.18% | 12.61% | 13.19% | 12.98% | 12.99% | 10.54% | 7.69% | 6.88% | 2.19% | -10.87% | -6.99% | 5.07% | 5.78% | -10.23% | -53.31% | 0.59% | 17.31% | -8.25% | -11.23% | 6.87% | -1.18% |
| Operating Income Growth % | - | 7.23% | -6.96% | 19.8% | 26.23% | 20.61% | 6.16% | 22.12% | 24.44% | -2.69% | 3.42% | 8.36% | 16.57% | 11.49% | 57.6% | 119.3% | -0.21% | 232.84% | 119.1% | -57.52% | -229.04% | -9.83% | 159.64% | 84.96% | -7816.26% | -95.22% | 446.13% | 23.81% | -268% | 933.33% | 75% |
| EBITDA | 86.56M | 82.06M | 77.66M | 81.17M | 71.07M | 54.53M | 47.68M | 44.26M | 39.57M | 32.47M | 31.32M | 29.39M | 27.51M | 23.85M | 19.76M | 13.89M | 8.82M | 7.88M | 5.08M | -1.48M | 348K | 7.9M | 8.4M | -1.64M | -32.72M | 6.95M | 14.59M | -400K | -1.6M | 4.4M | 900K |
| EBITDA Margin % | 14.35% | 14.85% | 14.51% | 14.32% | 14.8% | 14.69% | 14.64% | 15.56% | 15.34% | 16.1% | 17.79% | 17.89% | 18.98% | 18.87% | 17.43% | 15.68% | 15.93% | 12.72% | 8.69% | -2.39% | 0.57% | 12.12% | 13.25% | -2.73% | -42.73% | 7.69% | 22.8% | -1.03% | -4.28% | 12.09% | 3.54% |
| EBITDA Growth % | 11.15% | 5.66% | -4.33% | 14.21% | 30.34% | 14.37% | 7.72% | 11.87% | 21.87% | 3.66% | 6.58% | 6.83% | 15.32% | 20.73% | 42.27% | 57.48% | 11.88% | 55.16% | 444.41% | -523.85% | -95.59% | -5.99% | 612.88% | 94.99% | -571.09% | -52.41% | 3748% | 75% | -136.36% | 388.89% | 800% |
| D&A (Non-Cash Add-back) | 21.36M | 20.82M | 20.55M | 19.8M | 19.84M | 13.94M | 14.03M | 12.56M | 13.61M | 11.61M | 9.88M | 8.66M | 8.38M | 7.44M | 5.04M | 4.55M | 4.56M | 3.62M | 3.8M | 5.24M | 4.61M | 4.6M | 4.74M | 4.5M | 8.1M | 6.42M | 3.52M | 2.8M | 2.6M | 1.9M | 1.2M |
| EBIT | 65.32M | 61.36M | 61.66M | 62.41M | 54.63M | 41.68M | 32.85M | 32.83M | 25.96M | 21.11M | 20.69M | 19.18M | 19.01M | 16.58M | 14.78M | 9.34M | 6.03M | 4.71M | 1.63M | -4.7M | -5.55M | 3.3M | 3.66M | -5.02M | -34.21M | 3M | 11.08M | -3.24M | -4.17M | 2.5M | -300K |
| Net Interest Income | -5.49M | -3.57M | -4.33M | -1.04M | -3.69M | -514K | -162K | -702K | -902K | -216K | 295K | -217K | -531K | 21K | 352K | -224K | 482K | 485K | 0 | 0 | 0 | 912K | 307K | 958K | 575K | 2.42M | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 3.16M | 4.9M | 1.39M | 113K | 100K | 212K | 284K | 284K | 240K | 295K | 91K | 46K | 49K | 464K | 13K | 482K | 485K | 0 | 0 | 0 | 912K | 307K | 958K | 575K | 2.42M | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 5.49M | 6.74M | 9.23M | 2.43M | 3.8M | 614K | 374K | 990K | 1.19M | 456K | 0 | 308K | 577K | 28K | 112K | 173K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -5.89M | -6.62M | -4.67M | -4.34M | -6.51M | -3.19M | -1.18M | 149K | -1.71M | -430K | -677K | -1.85M | -696K | 146K | 346K | -65K | 2.25M | 448K | 331K | 610K | 358K | 912K | 265K | 861K | -1.8M | 914K | -167K | -2.96M | -5.8M | -600K | 200K |
| Pretax Income | 59.42M | 54.62M | 52.44M | 57.72M | 45.26M | 37.4M | 32.47M | 31.85M | 24.25M | 20.66M | 20.76M | 18.87M | 18.43M | 16.55M | 15.06M | 9.27M | 6.51M | 4.71M | 1.61M | -4.75M | -3.9M | 4.21M | 3.93M | -5.28M | -42.62M | 1.44M | 10.91M | -6.4M | -10M | 1.9M | -100K |
| Pretax Margin % | 9.85% | 9.89% | 9.8% | 10.18% | 9.42% | 10.08% | 9.97% | 11.2% | 9.4% | 10.24% | 11.79% | 11.49% | 12.71% | 13.1% | 13.29% | 10.47% | 11.76% | 7.61% | 2.76% | -7.7% | -6.4% | 6.47% | 6.19% | -8.8% | -55.67% | 1.6% | 17.05% | -16.49% | -26.74% | 5.22% | -0.39% |
| Income Tax | 11.99M | 11.33M | 9.93M | 11.2M | 10.36M | 7.29M | 6.87M | 7.07M | 6.33M | 3.95M | 3.68M | 2.31M | 1.57M | 94K | -203K | -102K | 334K | 199K | 362K | 325K | 491K | 281K | 230K | 384K | 167K | 523K | 2K | 100K | 500K | 500K | 300K |
| Effective Tax Rate % | 20.17% | 20.74% | 18.94% | 19.4% | 22.89% | 19.48% | 21.17% | 22.2% | 26.11% | 19.12% | 17.73% | 12.22% | 8.55% | 0.57% | -1.35% | -1.1% | 5.13% | 4.22% | 22.44% | -6.84% | -12.58% | 6.67% | 5.86% | -7.27% | -0.39% | 36.24% | 0.02% | -1.56% | -5% | 26.32% | -300% |
| Net Income | 40.05M | 36.88M | 37.03M | 40.47M | 29.77M | 25.19M | 20.27M | 19.88M | 15.44M | 14.17M | 16.2M | 15.4M | 15.88M | 16.18M | 15.04M | 9.38M | 6.18M | 4.51M | 12.61M | -5.01M | -4.61M | 4.09M | 3.07M | -5.66M | -42.79M | 920K | 10.91M | -6.5M | -10.5M | 1.4M | -400K |
| Net Margin % | 6.64% | 6.68% | 6.92% | 7.14% | 6.2% | 6.79% | 6.22% | 6.99% | 5.99% | 7.03% | 9.2% | 9.37% | 10.95% | 12.8% | 13.27% | 10.58% | 11.16% | 7.27% | 21.58% | -8.11% | -7.55% | 6.28% | 4.84% | -9.44% | -55.88% | 1.02% | 17.04% | -16.75% | -28.07% | 3.85% | -1.57% |
| Net Income Growth % | 14.98% | -0.4% | -8.5% | 35.96% | 18.19% | 24.28% | 1.93% | 28.76% | 8.98% | -12.53% | 5.16% | -3% | -1.87% | 7.57% | 60.47% | 51.8% | 37% | -64.24% | 351.86% | -8.66% | -212.64% | 33.36% | 154.16% | 86.76% | -4750.65% | -91.56% | 267.8% | 38.1% | -850% | 450% | 71.43% |
| Net Income (Continuing) | 47.33M | 43.29M | 42.5M | 46.28M | 35.34M | 30.12M | 25.6M | 24.78M | 17.91M | 16.71M | 17.08M | 16.57M | 16.86M | 16.46M | 15.27M | 9.38M | 6.18M | 4.52M | 1.14M | -5.08M | -4.39M | 3.93M | 3.07M | -5.66M | -42.79M | 920K | 10.91M | -6.5M | -10.5M | 1.4M | -400K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -14K | -224K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 24.79M | 23.88M | 24.96M | 41.62M | 40.85M | 33.55M | 38.77M | 31.65M | 29.12M | 27.9M | 7.84M | 5.87M | 3.45M | 2.49M | 490K | 0 | 0 | 0 | 0 | 131K | 528K | 830K | 1.46M | 1.23M | 1.38M | 251K | 917K | 0 | 0 | 100K | 0 |
| EPS (Diluted) | 0.82 | 0.75 | 0.75 | 0.82 | 0.61 | 0.49 | 0.26 | 0.39 | 0.35 | 0.27 | 0.36 | 0.36 | 0.43 | 0.44 | 0.41 | 0.29 | 0.19 | 0.14 | 0.39 | -0.16 | -0.15 | 0.13 | 0.10 | -0.19 | -1.44 | 0.03 | 0.45 | -0.37 | -0.72 | 0.10 | -0.03 |
| EPS Growth % | 15.71% | 0% | -8.54% | 34.43% | 24.49% | 88.46% | -33.33% | 11.43% | 29.63% | -25% | 0% | -16.28% | -2.27% | 7.32% | 41.38% | 52.63% | 35.71% | -64.1% | 343.75% | -6.67% | -215.38% | 30% | 152.63% | 86.81% | -4900% | -93.33% | 221.62% | 48.61% | -820% | 433.33% | 72.73% |
| EPS (Basic) | - | 0.75 | 0.75 | 0.82 | 0.61 | 0.49 | 0.26 | 0.39 | 0.35 | 0.27 | 0.37 | 0.36 | 0.43 | 0.44 | 0.41 | 0.29 | 0.19 | 0.14 | 0.40 | -0.16 | -0.15 | 0.13 | 0.10 | -0.19 | -1.44 | 0.03 | 0.45 | -0.37 | -0.72 | 0.10 | -0.03 |
| Diluted Shares Outstanding | 49.1M | 49.1M | 49.1M | 49.13M | 49.1M | 49.05M | 48.99M | 46.8M | 44.6M | 44.52M | 44.45M | 43.3M | 37.29M | 37.11M | 37.05M | 32.73M | 32.11M | 32.03M | 32.33M | 31.29M | 30.71M | 32.5M | 30.67M | 29.81M | 29.74M | 30.67M | 25.36M | 17.57M | 14.58M | 14M | 13.33M |
| Basic Shares Outstanding | 49.1M | 49.18M | 49.38M | 49.09M | 49.05M | 49.03M | 48.9M | 46.66M | 44.44M | 44.35M | 44.25M | 43.29M | 36.84M | 36.5M | 36.27M | 32.14M | 31.9M | 31.77M | 31.52M | 31.29M | 30.71M | 31.46M | 30.67M | 29.81M | 29.74M | 30.67M | 24.24M | 17.57M | 14.58M | 14M | 13.33M |
| Dividend Payout Ratio | - | 27.16% | 83.17% | 61.38% | 73.17% | 49.64% | 73.83% | 68.11% | 60.61% | 54.77% | 48.08% | 56.36% | 27.29% | - | - | 170.39% | - | - | - | - | - | - | 386.21% | - | - | - | - | - | - | - | - |
Geopolitical and labor cost exposure
As reported in recent financial filings, Magic Software's top-line performance has demonstrated a notable recovery, with year-over-year revenue growth accelerating to 13.1% in 2025Q3, a significant improvement from the contraction observed in early 2024 when growth dipped to negative 8.2% during the first quarter.
The recent acceleration suggests that the company is successfully navigating demand headwinds that previously hampered its IT services segment. Investors should monitor whether this growth is driven by high-margin proprietary software adoption or if it remains tethered to the lower-margin, project-based consulting work that characterizes the broader IT services industry.
Based on the provided income statement data, Magic Software maintains a consolidated gross margin hovering near 28%, which reflects the heavy weighting of labor-intensive professional services and suggests limited pricing power compared to pure-play software peers that typically command margins exceeding 60% in the current market environment.
The stability of these margins indicates that the company's cost structure is highly sensitive to technical personnel wages, which may limit profitability expansion. Unless the revenue mix shifts decisively toward proprietary SaaS solutions like FactoryEye, margin upside appears structurally capped by the competitive nature of the IT consulting landscape.
According to historical income statement figures, operating income has scaled alongside revenue growth, reaching $17.1M in 2025Q3, yet the operating margin remains constrained at approximately 10.6%, indicating that SG&A expenses are rising in tandem with gross profit rather than providing significant operating leverage for the firm.
The lack of meaningful operating margin expansion suggests that the company is reinvesting heavily in its workforce or infrastructure to support its service-heavy model. This pattern warrants investigation into whether management can achieve greater efficiency as the business scales or if the current cost structure is inherently tied to revenue volume.
As evidenced by the quarterly data, net income has fluctuated between $7.1M and $11.3M over the last ten quarters, with stock-based compensation expenses showing significant variability, including a high of $2.0M in 2023Q4, which complicates the assessment of core operational profitability and underlying earnings sustainability.
The inconsistency in net income suggests that non-operating items and variable compensation structures may be obscuring the true earnings power of the business. Analysts should scrutinize these fluctuations to determine if they represent one-time adjustments or a recurring drag on the quality of reported net income.
While the company's revenue growth has recently accelerated, a critical challenge remains the reliance on low-margin IT services, which leaves the firm vulnerable to wage inflation and potential margin compression if billable rates fail to keep pace with rising costs in the competitive Israeli tech market.
Short-term performance gains may mask the underlying risk that the company is essentially a high-touch service provider rather than a scalable software entity. Investors should remain cautious about the sustainability of current growth rates if the transition to higher-margin SaaS offerings fails to gain sufficient traction against larger, cloud-native competitors.
Quick answers to the most common questions about buying MGIC stock.
For fiscal year 2024, Magic Software Enterprises Ltd. (MGIC) reported total revenue of $552.5M. This represents a 2075.3% increase compared to $25.4M in 1995.
Magic Software Enterprises Ltd. (MGIC) is profitable, generating $36.9M in net income for the fiscal year ending 2024 with a net profit margin of 6.7%.
Magic Software Enterprises Ltd. (MGIC) reported an operating income of $61.2M, resulting in an operating profit margin of 11.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Magic Software Enterprises Ltd. (MGIC) generated $157.2M in gross profit for the year, representing a gross profit margin of 28.4%. This demonstrates the company's core pricing power and production efficiency.