AInvest Newsletter
Daily stocks & crypto headlines, free to your inbox
Magic Software Q4: Expecting Reversal of Negative Mix
ByAinvest
Thursday, Aug 14, 2025 11:27 am ET1min read
Magic Software (NASDAQ:MGIC) reported a decent quarter with NA revenues showing signs of recovery, despite negative mix effects impacting profit growth. The company expects a reversal of negative mix in Q4, indicating a positive trend in its business.
Title: Magic Software (MGIC) Shows Signs of Recovery in Q2, Expects Profit Growth in Q4Magic Software (NASDAQ:MGIC) reported a solid second quarter, with North American (NA) revenues showing signs of recovery. Despite the impact of negative mix effects on profit growth, the company expects a reversal in Q4, indicating a positive trend in its business [1].
The company's revenue grew by 11% year-over-year (YoY) and 2.8% sequentially, with most of the growth coming from Israel and project-based work. Defense demand was a significant driver of this growth [1]. The acquisition of Theoris in late April 2024 also contributed to the revenue increase, although the company expects a sequential trough in Q3 before a pickup in Q4 [1].
Magic Software's gross margins remain strong, with software solutions contributing around 17% of revenue and professional services accounting for 83%. The company's professional services, which carry a third of the gross margin, have shown significant growth [1].
The company's pipeline is robust, with legacy players moving to the cloud and generating cloud solutions revenues. Additionally, the deployment of AI and GenAI solutions has increased. Defense remains a solid market for Magic Software [1].
Magic Software is a small part of the parent company Asseco, which has a valuation multiple of around 25x earnings before interest, taxes, depreciation, and amortization (EBITDA). This valuation is in line with other tech consulting stocks and is considered fairly valued given the company's solid revenue growth [1].
Dianthus Therapeutics (DNTH), a clinical-stage biotech, reported a wider net loss in Q2 2025 due to increased research and development and administrative expenses. The company's focus remains on clinical development and achieving trial milestones [2].
References
[1] https://seekingalpha.com/article/4813637-magic-software-expecting-a-reversal-of-negative-mix-in-q4
[2] https://www.aol.com/finance/dianthus-dnth-q2-loss-widens-204458466.html
Ainvest News articles are AI-generated using advanced large language model (LLM) technology designed to analyze and synthesize publicly available data and news. While AI tools assist in producing initial drafts and insights, all AI generated content published on Ainvest is subject to comprehensive human editorial review before publication. A designated human editor reviews, verifies, and approves each article for factual accuracy, coherence, and compliance with AInvest Fintech Inc’s editorial and disclosure standards.
Despite these review procedures, the information provided may still contain inaccuracies, incomplete data, or time sensitive references due to the inherent limitations of AI generated analysis and evolving changes. The material is provided strictly for informational and educational purposes and does not constitute personalized investment, legal, or financial advice. Readers should independently verify all facts, figures, and statements before making any decision based on this content.
AInvest Fintech Inc. its affiliates, and partners accept no liability or responsibility for any direct or consequential losses arising from reliance on this content. All articles and analyses are subject to revision, update, or removal without prior notice to maintain accuracy and integrity in our publications.
Comments
No comments yet