Matrix announces the results of the third quarter of 2016


PDF Format

Matrix completes the third quarter of 2016 with an all-time record in revenues and operating profit

The revenues of Matrix in the quarter increased by about 17.2% and reached approximately NIS 641M. Operating profit surged by about 42.8% and reached approximately NIS 47.7M. Net profit surged by about 54.5% and reached approximately NIS 31M.

Matrix continues to invest in the US market and announces the acquisition of two more companies.

In the third quarter, Matrix, which experiences a momentum of growth, hired 200 new employees.

Matrix announces today the results of the third quarter of 2016 and records a sharp, double-digit growth in revenues, operating profit, and net profit. This is the all-time peak in quarterly revenues and quarterly operating profit. Quarterly revenues increased by about 17.2% and reached approximately NIS 641M. Operating profit surged by about 42.8% and reached approximately NIS 47.7M. The net profit also soared by about 54.5% and reached approximately NIS 31M.

In the first nine months of 2016, Matrix recorded a sharp growth in all indicators. Revenues grew by about 9.8% and reached approximately NIS 1.86B. Operating profit for the period grew by about 17.4% and reached approximately NIS 132.2M, and net profit recorded a sharp increase of about 21.2% and reached approximately NIS 82.5M. Cash flow from current activity for the quarter reached NIS 96M (compared with NIS 80M in the corresponding period of the previous year).

Acquisition of NIT and STONS in the US

At the same time with the announcement of financial results, Matrix, continuing its trend of business development in the US market, announces the acquisition of two companies in the US, completed after the end of the third quarter:

Matrix acquired (through Matrix-IFS, a subsidiary of Matrix in the US) control (60%) in NIT (Network Infrastructure Technologies, Inc.) for approximately $6.8M. Sellers will be entitled to additional compensation in the amount of up to $2.5M, subject to the company meeting its targets in the next three years. NIT was established in 2001, and it provides IT services to the financial sector and to the healthcare sector in the US. Company offices, located in the heart of the financial district of Wall Street, employ approximately 80 people. Following the acquisition, the founder of the company joins the management team of Matrix-IFS.

In addition, Matrix acquired (through XTIVIA, another subsidiary operating in the US) control (55%) in STONS – Second TO None Solutions Inc. STONS, which was founded in 2012, operates in the marketing and sales of IBM software products to business and federal customers in the US. After the acquisition, the founder of the company joins the management team of XTIVIA.

Recruitment of 200 workers within three months

At the conclusion of the previous quarter, Matrix announced the planned recruitment of 200 new employees by the end of the year, necessitated by organic growth, entry into new, growing areas of activity, and winning bids for strategic projects. Within only three months, Matrix announced that it met the recruitment goal and that currently the company employs 7,950 workers, compared to 7,750 three months ago. To meet this recruitment target, Matrix established a dedicated website and conducted a smart online campaign on the Internet and on social networks. The recruiting momentum continues, and the company is expected to hire additional employees before the end of the year.

Moti Gutman, Matrix CEO: "We conclude the quarter with new records in company revenues and profitability, a quarter in which we recorded growth both in traditional and new areas, and as its direct result, fast organic growth in the workforce. Most of the hiring was carried out for activities in cyber and information security fields, in development (foremost, development of Java, full stack, and DevOps technologies), and included cloud, BI, big data, and analytics experts. We are excited about each and every employee who joined us, and offer them a dynamic work environment at the forefront of technology, and work in a leading, financially stable company in all areas of its business."

Gutman adds: "Since its inception, Matrix has been striving toward organic growth through mergers and acquisitions. So far we've made dozens of acquisitions in the Israeli market, and today we announce two more acquisitions in the US, which were completed after the end of the quarter. The two companies join our existing US operations in the area of solutions for the financial sector and health services sector, and in the area of software solutions. We believe in the considerable potential of the areas of our activities in the US, and enjoy relatively high profits in the US market, in part because of our activities in high-profit areas."

According to Gutman: "We continue to place emphasis on the bottom line and choose the areas that we have identified as the fastest growing ones. In the areas of cyber, cloud, mobile, big data, digital, analytic solutions, regulation and AML, and solutions for startup companies, we undertook early measures to acquire expertise and to establish a presence that proved itself. Recently we announced two further important strategic processes: the establishment of a specialized unit in the area of Internet of things (IoT) and the signing of an agreement to represent Google in the area of the cloud. We are proud that Matrix is at the forefront of all these technologies. Matrix employees belong to an organization that is an early adopter and therefore enjoy new technological challenges."

Summary of consolidated profit statements for three months and nine months ending on September 30 of 2016 and 2015 (in NIS millions)

Quarter results

Revenues grew by about 17.2% to approximately NIS 641M, compared with NIS546.8M the previous year.

Gross profit grew by about 22.6% to approximately NIS 100.5M, compared with NIS82M the previous year.

Operating profit grew by about 42.8% to approximately NIS 47.7M (about 7.4% from revenues), compared with NIS33.4M (about 6.1% from revenues) the previous year.

Net profit grew by about 54.5% to approximately NIS 31.1M, compared with NIS20.1M the previous year.


Results in the first nine months of 2016

Revenues grew by about 9.8% to approximately NIS 1.86B, compared with NIS1.69B the previous year.

Gross profit grew by about 10.4% to approximately NIS 287.5M, compared with NIS260.4M the previous year.

Operating profit grew by about 17.4% to approximately NIS 132.2M (about 7.1% from revenues), compared with NIS112.6M (about 6.7% from revenues) the previous year.

Net profit grew by about 21.2% to approximately NIS 82.5M, compared with NIS61.8M the previous year.

As of September 30, 2016, cash and cash equivalents and financial assets stand at approximately NIS 216M. Cash flow from current activity for the period amounted to approximately NIS 96M compared with NIS80.1M in the corresponding period of the previous year.


Matrix continues its policy of dividend distribution on a quarterly basis at a rate of up to 75% of annual net profit. Since the beginning of the year, the company distributed approximately NIS 61.8M. With the release of third quarter results Matrix announced distribution of additional dividends in the amount of about NIS 22.5M.

About Matrix

Matrix, which employs some 7,950 IT professionals, has been ranked by leading research companies as a leader in the IT services industry in Israel for over a decade. Matrix is traded on the Tel-Aviv Stock Exchange as part of the TA100 Index. Company sales in 2015 reached approximately NIS 2.3B.

Matrix is engaged in the execution of some of the largest integration projects in the industry; in the development and implementation of innovative technologies for the Internet and mobile environments, as well as for legacy systems; in the development of software solutions and products, local infrastructure solutions and cloud solutions; in the outsourcing and offshore services; in software testing, training, and deployment.

Among its customers Matrix counts hundreds of the Israeli organizations and companies leading in the fields of industry, trade, banking and finance, high-tech, telecom, security, health, and public government sector. The uniqueness of Matrix is in the implementation of technologies that support and empower its business activities, its ability to adapt technologies and solutions to customer needs, and its ability to anticipate which technologies will be in demand in the future. Matrix has a unique expertise in solutions for the financial sector, and today about a third of company activities is in this sector in Israel and the United States, in areas such as core banking systems, digital solutions, CRM, financial risk management, cyber solutions, fraud prevention, business intelligence and data warehousing, and more. Alongside its extensive interaction with small companies and large enterprises, Matrix has established a unique business arm under the name of 8300, which provides a basket of services and solutions for startups and high-tech firms based on models that are suitable for young companies.