Magic Software Enterprises Ltd. (NASDAQ:MGIC) Q2 2019 Earnings Conference Call Transcript

Aug 13, 2019 • 10:00 am ET

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Magic Software Enterprises Ltd. (NASDAQ:MGIC) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to Magic Software Enterprises 2019 Second Quarter Financial Results Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

With us online today our Magic's CEO, Mr. Guy Bernstein; Magic's CFO, Mr. Asaf Berenstin; Magic's VP of Technology & Innovation, Mr. Yuval Lavil; and Magic's VP, M&A and General Counsel, Mr. Amit Birk.

I'll now 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 opened 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 obligations to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its view or expectations or otherwise. Also, during the course of today's call, we will refer to non-GAAP financial measures. The reconciliation schedules showing a GAAP versus non-GAAP results has been provided in the press release issued before the market opened this morning. A replay of this call will be available after the call on our Investor Relations section of the Company -- on the Company's website.

I will now turn the conference over to Mr. Asaf Berenstin, CFO of Magic Software. Please go ahead.

Executive
Asaf Berenstin

Good morning, everyone, and thank you for joining us today as we report our second quarter 2019 financial results. Our second quarter revenues totaled $77.1 million compared to $70.2 million for the second quarter last year, and $71.8 million in this previous quarter, reflecting 10% and 7% growth respectively.

During the second quarter, we experienced fewer working days due to the Jewish Passover, the Israeli Independence Day and our National Election Day. We are proud to conclude our quarterly and half year results with continued growth across all our major financial indices[Phonetic]. These results serve as a testimony to the solid execution of our well-defined corporate strategy. In addition, and as we indicated during our first quarter Investors Call, we continued to experience in this quarter a certain decline in our business activity with CVS. Such decline was compensated with new project provided specifically to existing clients.

Though our full-year 2019 guidance did not factor this decline in business with CVS, we still remain confident in our ability to achieve our full-year 2019 guidance, which now factors an incremental impact for M&A based on our current deal backlog as we are on final stages to acquire US-based software service company.

Looking at the geographical breakdown of our revenues. During the second quarter, North America accounted for 48% of our total revenues, Israel 36%, Europe 9% and APAC and the rest of the world accounted for