Formula Systems (1985) Ltd (NASDAQ: FORTY)

Formula Systems (1985) Ltd., also known as Formula Systems, is a global information technology company that operates in the industry of software consulting services and computer-based business solutions. The company, which was incorporated in Israel in 1985, is listed on the Tel Aviv Stock Exchange under the ticker symbol FORTY.

Formula Systems operates through its subsidiaries, including Sapiens, Magic Software, Matrix, and Michpal Micro Computers (1983) Ltd. These subsidiaries are engaged in various business activities such as software development, consulting, and staffing services. The company's business segments include software solutions, IT services, and staffing.

The company generates revenue primarily through its software solutions segment, which includes the development and sale of proprietary software products and solutions. The company's software products and solutions are used by various industries, including financial services, healthcare, insurance, and government.

The software solutions segment includes products and solutions such as Sapiens, which provides software solutions for the insurance and financial services industries, including policy administration, claims processing, and customer relationship management. Magic Software and Matrix provide software solutions for the enterprise and small and medium-sized businesses, including application development, data integration, and business process management. Michpal Micro Computers (1983) Ltd. also provides software solutions for the enterprise and small and medium-sized businesses.

Formula Systems also generates revenue through its IT services segment, which provides consulting and implementation services to its clients. The segment's services include software development, testing, and maintenance, as well as IT consulting and implementation.

The company's staffing segment provides staffing services to its clients, including temporary and permanent staffing, recruitment, and placement services.

Formula Systems has a strong brand reputation, an experienced management team, and diversified revenue streams, which enable it to compete effectively in the market.

The company has a diverse range of customers across various industries, including financial services, healthcare, insurance, and government. Financial services customers include banks, insurance companies, and investment firms. Healthcare customers include hospitals, clinics, and medical research institutions. Insurance customers include property and casualty insurance, life insurance, and health insurance. Government customers include federal, state, and local government agencies.

Formula Systems operates through its directly and indirectly held subsidiaries in the following principal areas: information technologies (IT) software solutions and services, consulting & management in Israel, information technologies (IT) software solutions and services in the United States, computer and cloud infrastructure and integration solutions, software product marketing and support, and training and integration.

The company's infrastructure and integration solutions include solutions of IBM, Oracle Red Hat, Dell-Boomi, and others. Formula Systems' training and integration activities consist of operating a network of training centers, providing advanced courses for high-tech professionals, courses for developers and professional training, and soft skills and management training.

In 2023, the Israeli economy registered a GDP growth of about 3.5%, but in the fourth quarter, there was a sharp contraction in the GDP due to the war. The Bank of Israel has updated the growth forecast downwards in light of the effects of the war, according to which GDP is expected to grow in each of the years 2023 and 2024 at a rate of 2%. The government deficit and Israel's debt-to-GDP ratio are also expected to increase.

Despite the negative impact of the war on the Israeli economy, Formula Systems' Israeli-based operations reflected continued increase in volume of activity, revenues, profit, and cash flow, which compensated for the effects of the war. The company's activities in Israel are primarily focused on providing software solutions and services, consulting and management, and computer and cloud infrastructure and integration solutions.