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Formula Systems (1985) Ltd.

FORTY Technology Information Technology Services

Formula Systems (1985) Ltd.’s revenue for fiscal 2025 (year ended December 2025) was $2.6 billion, up 18.4% from fiscal 2024. In the quarter to June 2026, revenue grew 29.8%, EPS grew 55.1%, free cash flow grew 1,330.8% and total debt rose 1.98%, each against the same quarter a year earlier. Operating cash flow growth for three consecutive years.

112.11 2.48 −2.16%
Market cap
$1.8B
P/E
2.7×
Fwd P/E
13.9×
Dividend yield
0.46%
F-score
6/9
Altman Z
2.48
Beneish M
−2.92
Dividend safety
77/100
Overview Business Profile Financial Analysis Income Statement Balance Sheet Cash Flow Metrics & Ratios 10-Q 10-K

Formula Systems (1985) Ltd. (FORTY) Business Profile

Updated before January 2025

Company Overview

Formula Systems (1985) Ltd. (NASDAQ: FORTY) is a global information technology (IT) solutions provider headquartered in Or Yehuda, Israel. Established in 1985, the company has grown into a leading player in the IT services sector, offering a wide range of software solutions, IT consulting, and system integration services. Formula Systems operates as a holding company, managing a portfolio of subsidiaries that specialize in various IT domains. The company is led by a seasoned management team, with Guy Bernstein serving as the Chief Executive Officer (CEO). Under his leadership, Formula Systems has expanded its global footprint and diversified its offerings to cater to a broad spectrum of industries.

Core Business Segments

Formula Systems operates through several core business segments, each focusing on distinct areas of IT services and solutions. These segments include:

1. Software Solutions

Formula Systems provides a comprehensive range of software products designed to address the needs of businesses across various industries. Key offerings include:

  • ERP Solutions: Enterprise Resource Planning software tailored for manufacturing, retail, and other sectors.
  • CRM Systems: Customer Relationship Management tools to enhance customer engagement and sales processes.
  • Business Intelligence (BI) Tools: Advanced analytics and reporting solutions to support data-driven decision-making.

2. IT Consulting and System Integration

The company offers end-to-end IT consulting services, helping organizations optimize their IT infrastructure and align it with business goals. Services include:

  • System Integration: Seamless integration of hardware, software, and network systems.
  • IT Strategy Consulting: Advisory services to develop and implement effective IT strategies.
  • Cloud Migration: Assistance in transitioning to cloud-based platforms for improved scalability and efficiency.

3. Managed Services

Formula Systems provides managed IT services to help businesses focus on their core operations while outsourcing IT management. Key services include:

  • Infrastructure Management: Monitoring and maintenance of IT infrastructure.
  • Cybersecurity Services: Protection against cyber threats through advanced security solutions.
  • Application Management: Support and maintenance of business-critical applications.

4. Digital Transformation

The company helps organizations embrace digital transformation by leveraging emerging technologies such as:

  • Artificial Intelligence (AI): AI-driven solutions for automation and predictive analytics.
  • Internet of Things (IoT): IoT-enabled devices and platforms for enhanced connectivity.
  • Blockchain: Secure and transparent solutions for supply chain and financial transactions.

Business Model

Formula Systems operates as a holding company, managing a diverse portfolio of subsidiaries that specialize in various IT domains. The company generates revenue through a combination of:

  • Product Sales: Licensing fees for proprietary software solutions.
  • Service Contracts: Recurring revenue from IT consulting, managed services, and system integration projects.
  • Subscription Models: Monthly or annual subscriptions for cloud-based solutions and SaaS (Software as a Service) offerings.
  • Custom Development: Revenue from bespoke software development projects tailored to client needs.

The company’s business model emphasizes long-term client relationships, leveraging its subsidiaries’ expertise to deliver comprehensive IT solutions.

Strategic Direction

Formula Systems is focused on achieving sustainable growth through innovation and strategic expansion. Key elements of its strategic direction include:

  • Global Expansion: Strengthening its presence in key markets such as North America, Europe, and Asia-Pacific.
  • R&D Investment: Increasing investment in research and development to drive innovation in emerging technologies like AI, IoT, and blockchain.
  • Sustainability Goals: Implementing eco-friendly practices and promoting green IT solutions to reduce environmental impact.
  • Mergers and Acquisitions: Pursuing strategic acquisitions to enhance its capabilities and expand its market share.

Competitive Landscape

Formula Systems operates in a highly competitive IT services market, facing competition from both global giants and regional players. Key competitors include:

  • Accenture: A global leader in IT consulting and professional services.
  • IBM: Known for its expertise in cloud computing, AI, and system integration.
  • Tata Consultancy Services (TCS): A major player in IT services and digital transformation.
  • SAP: A leading provider of enterprise software solutions.
  • Local IT Firms: Regional competitors offering niche solutions and services.

Risk Factors

Despite its strong market position, Formula Systems faces several risks, including:

  • Market Dependence: Reliance on specific industries or regions for a significant portion of revenue.
  • Supply Chain Disruptions: Potential delays in hardware and software delivery due to global supply chain issues.
  • Technological Obsolescence: The need to continuously innovate to stay ahead of rapidly evolving technology trends.
  • Economic Uncertainty: Exposure to global economic fluctuations that may impact IT spending.

Recent Developments

Formula Systems has recently introduced several initiatives and innovations to strengthen its market position:

  • New Product Launches: Introduction of AI-powered analytics tools and IoT-enabled platforms.
  • Strategic Partnerships: Collaborations with leading technology providers to enhance its service offerings.
  • Digital Transformation Projects: Successful implementation of large-scale digital transformation projects for key clients.
  • Global Expansion: Opening new offices and expanding operations in emerging markets.

Investment Considerations

Investors considering Formula Systems should weigh the following factors:

Strengths

  • Diverse Portfolio: A wide range of products and services catering to multiple industries.
  • Global Presence: Strong foothold in key markets worldwide.
  • Innovation-Driven: Commitment to R&D and adoption of emerging technologies.
  • Experienced Leadership: A seasoned management team with a proven track record.

Risks

  • Market Volatility: Exposure to economic and geopolitical uncertainties.
  • Competitive Pressure: Intense competition from global and regional players.
  • Technological Risks: The need to keep pace with rapid technological advancements.

Conclusion

Formula Systems (1985) Ltd. is a prominent player in the global IT services market, offering a diverse range of solutions and services. With a strong focus on innovation, strategic expansion, and sustainability, the company is well-positioned for future growth. However, investors should carefully consider the associated risks before making investment decisions. Overall, Formula Systems remains a compelling choice for businesses seeking reliable IT solutions and services.