Magic Software Enterprises Ltd. (NASDAQ:MGIC) Q3 2019 Earnings Conference Call - Final Transcript

Nov 14, 2019 • 10:00 am ET

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Magic Software Enterprises Ltd. (NASDAQ:MGIC) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, welcome to Magic Software Enterprises 2019 Third Quarter Financial Results Conference Call. [Operator Instructions] With us on the line today are Magic's CEO, Mr. Guy Bernstein; Magic's CFO, Mr. Asaf Berenstin; Magic's CMO, Mr. Einat Etzioni; 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 review 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. A 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's website.

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

Executive
Asaf Berenstin

Thank you. Thank you, Amit. And thank you everyone for joining us today as we report our third quarter 2019 financial results. We enter the second half of 2019 with the third pipeline of business, which we expect will serve our continued strong momentum into year-end. Our third quarter results demonstrated the continued solid execution of our 2019 priorities of top line growth, while maintaining our operating margin.

Our first quarter revenues totaled $85.8 million compared to $72.1 million for the third quarter last year and $77.1 million in the previous quarter, reflecting 19% and 11% growth respectively.

The outlook for our business remains robust and we are benefiting from global trends that are driving our growth. This includes, first and foremost, the demand for wide range of top technologies, methodologies and services for the SMB enterprise digital transformation demand for services [Phonetic]. On the M&A front, Magic has demonstrated a solid track record of acquisitions that have accelerated top line and bottom line growth.

We have proven our ability to successfully integrate acquisitions and improve the operational performance of the combined entities. Through our acquisition strategy, we have expanded the offering for our customers and increased our global footprint. Our recent acquisitions completed during the third quarter NetEffects, a US-based company which specializes in IT staffing and recruiting will expand our footprint in the US market and diversify our client portfolio. NetEffects team and its solid customer base that includes several blue chip companies will help Magic fulfill its commitment to its client to serve as a one-stop-shop for a