Magic Software Enterprises (MGIC) Misses Q2 EPS by 2c, Revenues Beat

Magic Software Enterprises (NASDAQ: MGIC) reported Q2 EPS of $0.13, $0.02 worse than the analyst estimate of $0.15. Revenue for the quarter came in at $90.9 million versus the consensus estimate of $83.97 million.

Financial Highlights for the Fourth Quarter Ended December 31, 2019

• Revenues for the fourth quarter increased 26% to $90.9 million compared to $72.3 million in the same period last year.
• Operating income for the fourth quarter increased 3% to $8.7 million compared to $8.4 million in the same period last year.
• Non-GAAP operating income for the fourth quarter increased 14% to $11.4 million compared to $10.0 million in the same period last year.
• Net income attributable to Magic's shareholders for the fourth quarter increased by 13% to $5.1 million, or loss of $0.03 per fully diluted share, compared to $4.5 million, or $0.06 per fully diluted share in the same period last year. Earnings per share for the fourth quarter of 2019 and 2018 were negatively impacted by accretion charges of $6.4 million and $1.5 million, respectively, with respect to change in the value of outstanding put options of redeemable non-controlling interests.The Company classifies redeemable non-controlling interests as mezzanine equity, separate from permanent equity on the consolidated balance sheets and measures it at each reporting period at the higher of its redemption amount or the non-controlling interest book value. The changes in the redemption value measured on each reporting period is reported as part of the retained earnings and allocated to earnings for the purpose of calculating the company’s net income attributable to Magic’s shareholders per share.Excluding the negative impact in the amount of charge with respect to the value of outstanding put options of redeemable non-controlling interests, earnings per share for the fourth quarter was $0.10 per fully diluted share compared to $0.09 per fully diluted share in the same period last year.
• Non-GAAP net income attributable to Magic's shareholders for the fourth quarter increased 10% to $6.3 million, or $0.13 per fully diluted share, compared to $5.7 million, or $0.12 per fully diluted share, in the same period last year.

Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said:

“Magic finished 2019 on a very strong note with fourth quarter revenue reaching a record high of $90.9 million, and non-GAAP operating income of $11.4 million. For the full year, it was a strong year of execution on many fronts as we advanced our business globally, growing revenue by 14.5% year over year to $325.6 million above the high end of the annual guidance range,” stated Guy Bernstein. CEO, Magic.

For earnings history and earnings-related data on Magic Software Enterprises (MGIC) click here.

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