Matrix CEO: "The apocalyptic predictions about us are disconnected from reality"
The comments came as Matrix reported an increase in second-quarter net profit to $45 million and strong growth in cloud, AI and computing infrastructure.
Matrix published strong results on Tuesday, sending its stock higher on the Tel Aviv Stock Exchange after shares had fallen roughly 40% since the beginning of the year amid investor concerns about the impact of AI on the company's business. Matrix, which completed its merger with Magic Software at the beginning of the year, continues to report growth in both revenue and profit.
The company reported second-quarter revenue of NIS 2.1 billion ($700 million) and operating profit of NIS 202 million ($67.3 million), up 10.6% from the corresponding quarter a year earlier. Net profit attributable to shareholders rose to NIS 135 million ($45 million), up 13.4% year over year. In the first half of the year, net profit reached NIS 272.3 million ($90.8 million), an 11.3% increase, and the company announced a dividend of approximately NIS 91.6 million ($30.5 million).
CEO Moti Gutman addressed the concerns that have weighed on Matrix's stock during an investor call following the results, arguing that the market's fears about AI's impact on IT services and integration companies are overblown.
"I'm trying to understand where the big mistake analysts, in the world in general and I think yours too, are making in analyzing the risks versus opportunities in integration companies," Gutman said. "The apocalyptic vision in the market regarding SaaS companies and products is not comparable to my integration company and other companies. The apocalyptic predictions about us are disconnected from reality."
The strengthening of the shekel against the dollar has weighed on the results of Matrix's overseas operations when translated into shekels, limiting the company's reported growth in revenue and profit. About 20% of Matrix's revenue comes from abroad, while the dollar weakened by approximately 18% between the corresponding quarter last year and the second quarter of 2026.
Excluding the impact of currency fluctuations, Matrix's operating profit would have increased by approximately 20.6%, while net profit would have risen by approximately 32.4%.
Matrix attributed the growth to higher profitability following the consolidation of Magic's operations, as well as continued growth in its core business segments.
In Israel, revenue in the IT Solutions, Software Products and Services, Consulting and Systems Engineering segment increased by approximately 10.4% in constant-currency terms, while operating profit rose by approximately 16.1%. According to the company, the growth was driven mainly by increased activity in Data, AI, Security and Core Systems, alongside continued efficiency measures and an improved mix of transactions.
The sharpest growth was recorded in the cloud, computing infrastructure and systems segment, where revenue increased by 35.5% in constant-currency terms and operating profit rose by 40.8%.
Matrix also reported negative cash flow of NIS 23 million ($7.7 million) in the second quarter, compared with positive cash flow of NIS 146 million ($48.7 million) in the corresponding quarter last year. The company attributed the decline mainly to a NIS 260 million ($86.7 million) check-discounting transaction carried out at the end of 2025, which boosted cash flow in the previous period and created a negative comparison in the current quarter.
