Magic Software Enterprises Ltd. (NASDAQ:MGIC) Q1 2019 Earnings Conference Call Transcript

May 16, 2019 • 10:00 am ET

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Magic Software Enterprises Ltd. (NASDAQ:MGIC) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Magic Software Enterprises Ltd 2019 First Quarter Financial Results Conference Call. With us on the line today are Magic's CEO, Mr. Guy Bernstein; Magic's CFO, Mr. Asaf Berenstin; Magic Software Division VP of Technology and Innovation, Mr. Yuval Lavi; and Magic's VP, M&A and General Counsel, Mr. Amit Birk.

I would now like to turn the conference over to Mr. Amit Birk of Magic Software. Please go ahead.

Executive
Amit Birk

Thank you, and good day everyone. Our quarterly earnings release was issued before the market open this morning, and it has been posted on the company's website at www.magicsoftware.com.

Before we start, I would like to remind everyone that this conference call may contain projections or other forward-looking statements. The Safe Harbor provision provided in the press release issued today also applies to the content of this call. Magic expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations or otherwise.

Also during the course of today's call, we will refer to non-GAAP financial measures, the reconciliation schedule showing GAAP versus non-GAAP results has been provided in the press release issued before the market open this morning. A replay of this call will be available after the call on our Investor Relations section of the company website.

I will now turn the conference call over to Mr. Guy Bernstein, CEO of Magic Software. Please go ahead.

Executive
Guy Bernstein

Thank you, Amit. Good morning everyone and thank you for joining us today as we report our first quarter 2019 financial results. We are pleased to report another good start for the year, as we continue our forward momentum with consistent year-over-year growth in our revenues, operating income and net income, which demonstrated the solid execution of our corporate strategy.

Our first quarter revenues increased 3% to $71.8 million compared to $69.7 million in the same period last year. Non-GAAP operating income increased 4% year-over-year to $10.1 million for the quarter. We continued strengthening our competitive advantages to support our future growth, as we reported the acquisition of PowWow's SmartUX, a leading low-code development platform for mobilizing and modernizing enterprise apps, which is strongly synergistic to the technology and paradigm of Magic low-code existing solutions. By combining them together we will be able to offer to new and existing clients solutions and services, which better meet today's high demand to complete transformation to digital workplace.

Now I would like to turn the call over to Asaf, our Chief Financial Officer to discuss the financial results in more detail. Asaf please.

Executive
Asaf Berenstin

Thank you Guy, and good morning everyone. Our first quarter revenue totaled $71.8 million compared to $69.7 million for the first quarter last year, reflecting 3% year-over-year growth. Looking at the geographical breakdown of our revenues, North America accounted for 48% of total revenues, Israel 39%, Europe 8% and APAC and the rest of the world accounted for 5%