Formula Systems (1985) (TASE:FORTY) Top Line Strength Meets EPS Pause

Formula Systems (1985) came into this earnings print with the stock around ₪355.9 and a mixed recent run, modest gains over 7 and 30 days and a slip over 90 days. The IT services thesis here has leaned on solid earnings quality. Q2 results keep that story alive but with a twist.

Revenue reached US$782.4m, ahead of Q1, yet net income from ongoing operations eased to US$23.3m and basic EPS slipped to US$1.52. For investors, the headline is clear: the top line in this tech portfolio is grinding higher while profit per share took a breather.

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Q2 2026 Earnings Summary

• Revenue Q2 2026 vs Q2 2025: US$782.4m vs. US$743.4m (up roughly 5%)
• Net Income from Ongoing Operations Q2 2026 vs Q2 2025: US$23.3m vs. US$15.1m (up roughly 55%)
• Basic EPS Q2 2026 vs Q2 2025: US$1.52 vs. US$0.98 (up roughly 55%)
• Trailing Net Profit Margin Last 12 Months vs Prior Year: 3.2% vs. 2.7% (margin improved)

Prefer clear, visual charts instead of a long list of earnings tables and raw figures? View the complete Formula Systems (1985) valuation snapshot in the company report for Formula Systems (1985).

Formula Systems earnings keep bullish story credible

For a bullish view on Formula Systems, the latest run of record Q1 and strong Q2 figures points in the same direction as the diversified IT story. Revenue and net income are up year on year and trailing net margin has improved to 3.2% from 2.7%. Record H1 2026, a strengthened balance sheet and both regular and special dividends suggest the multi segment portfolio is converting activity into cash. Short term share price gains over 7 and 30 days are modest yet broadly consistent with better fundamentals.

Bearish concerns soften but have not disappeared

Bears have focused on complex structure, sentiment and past efficiency issues. Some of that is now running against the numbers. The Matrix IT and Magic Software merger simplifies part of Formula Systems and record Q1 and H1 2026 results replace the earlier profit drop narrative. Net income from ongoing operations and EPS are higher year on year and the balance sheet is described as stronger. That said, the share price is still down over 90 days and institutional ownership has eased, so scepticism around the story has not vanished.

With Formula Systems (1985) trading on a 19.7x P/E and a DCF figure far below the current ₪355.9 price, it is worth verifying how resilient the balance sheet really is. Check the full financial health analysis of Formula Systems (1985) stock

Take Control Of Your Next Move

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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