FORTY

Revenues for the second quarter increased by 29.8% year over year, reaching a second quarter record-breaking $782.4 million. Net income attributable to Formula Systems’ shareholders for the second quarter increased by 54.6% year over year, reaching $23.3 million. OR YEHUDA, Israel, Aug. 25, 2026 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula” or the “Company”), a global information technology group providing a broad range of software, proprietary and non-proprietary technology solutions and professional services through its subsidiaries and affiliates, today announced its results of operations for the second quarter and first half ended June 30, 2026. Financial Highlights for the Second Quarter Ended June 30, 2026 Revenues for the second quarter ended June 30, 2026 increased by 29.8% year over year, reaching a second quarter record-breaking $782.4 million, compared to $602.7 million in the same period last year. Operating income for the second quarter ended June 30, 2026 increased by 41.3% year over year, reaching $71.6 million compared to $50.7 million in the same period last year. Net income from continued operations attributable to Formula’s shareholders for the second quarter ended June 30, 2026, increased by approximately 163.7% year over year, reaching $23.3 million, or $1.47 per fully diluted share, compared to $8.8 million, or $0.56 per fully diluted share, in the same period last year. Net income attributable to Formula's shareholders for the second quarter ended June 30, 2026 increased by approximately 54.6% year over year, reaching $23.3 million, or $1.47 per fully diluted share, compared to $15.1 million, or $0.95 per fully diluted share, in the same period last year. Financial Highlights for First Half Ended June 30, 2026 Revenues for the six-month period ended June 30, 2026 increased by 24.4% year over year, reaching a first half record-breaking $1.52 billion, compared to $1.22 billion in the same period last year. Operating income for the six-month period ended June 30, 2026 increased by 53.3% year over year, reaching $153.7 million compared to $100.2 million in the same period last year. Operating income for the first half of 2026 included a capital gain of $16.6 million resulting from exercise of employee stock-based compensation and a secondary private placement transaction completed by our affiliate, TSG IT Advanced Systems Ltd. ("TSG"), in January 2026. On January 13, 2026, TSG's Board of Directors approved a capital raise through a private placement to institutional investors, pursuant to which TSG raised approximately NIS 192 million (approximately $58.9 million) through the issuance of 320,374 ordinary shares at a price of NIS 600 per share, together with 128,150 non-tradable warrants (allocated at no additional consideration at a ratio of 0.4 warrant per share), each exercisable for one ordinary share at an exercise price of NIS 720 per share through July 22, 2027. The allocated shares and warrants represent approximately 9.23% of TSG's fully diluted share capital. As a result of this transaction and the exercise of TSG’s employee stock-based compensation, during the six-month period ended June 30, 2026 Formula's ownership interest in TSG was diluted from 37.33% to 32.87%, resulting with a $16.6 million capital gain. Excluding this capital gain, operating income would have increased by 36.7% year over year, to $137.0 million. Net income from continued operations attributable to Formula’s shareholders for the six-month period ended June 30, 2026 increased by approximately 186.4% year over year, reaching $58.9 million, or $3.72 per fully diluted share, compared to $20.6 million, or $1.31 per fully diluted share, in the same period last year. Excluding the impact of the capital gain resulting from TSG’s secondary private placement transaction and the exercise of TSG’s employee stock-based compensation, net income from continued operations attributable to Formula’s shareholders would have increased by 105.5% year over year, to $42.3 million. Net income attributable to Formula's shareholders for the six-month period ended June 30, 2026 increased by approximately 71.4% year over year, reaching $58.9 million, or $3.72 per fully diluted share, compared to $34.4 million, or $2.20 per fully diluted share, in the same period last year. Excluding the impact of the capital gain resulting from TSG’s secondary private placement transaction and the exercise of TSG’s employee stock-based compensation, net income attributable to Formula’s shareholders would have increased by 23.0% year over year, to $42.3 million. As of June 30, 2026, Formula held 47.68%, 18.68%, 69.09%, 32.87%, 90.09%, 80%, 100%, 100%, 51% and 100% of the outstanding ordinary shares of Matrix IT Ltd., SI Swan UK Topco Limited., Michpal Technologies Ltd., TSG IT Advanced Systems Ltd., Insync Staffing, Inc., Ofek Aerial Photography Ltd., ZAP Group Ltd., Shamrad Electronic (1997) Ltd., Hashahar Telecom And Electricity Ltd., and Formula Infrastructure Ltd., respectively. Consolidated cash and cash equivalents and short-term bank deposits totaled approximately $864.5 million as of June 30, 2026, compared to $1,280 million as of December 31, 2025. Total equity as of June 30, 2026 was $1.66 billion (representing 47.2% of the total consolidated statements of financial position), compared to $1.78 billion (representing 49.6% of the total consolidated statements of financial position) as of December 31, 2025. The above comparative figures for the second quarter and first half ended June 30, 2025 reflect the reclassification of the results of Sapiens (of which Formula sold its controlling interest in December 2025), as discontinued operations, in accordance with IFRS 5. Similarly, the Company’s record-breaking consolidated results for the second quarter and first half ended June 30, 2026 (as described above) are relative to the Company’s historical consolidated results in prior years that exclude Sapiens. Debentures Covenants As of June 30, 2026, Formula was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Target equity attributable to Formula’s shareholders (excluding non-controlling interests): above $325 million. Actual equity attributable to Formula’s shareholders as of June 30, 2026 was $1.21 billion. Covenant 2 Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula’s Series C and D Secured Debentures): below 65%. Actual ratio of net financial indebtedness to net capitalization, as of June 30, 2026 was (27.08%). Covenant 3 Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): below 5. Actual ratio of net financial indebtedness to EBITDA as of June 30, 2026 was (2.07). Declaration of Dividend Based on the Company’s strong cash position, primarily resulting from the net proceeds received in connection with Advent’s acquisition of Sapiens in December 2025, the Company’s board of directors approved the distribution of a cash dividend in an amount of $1.63 per share and in an aggregate amount of approximately $25.0 million. In reaching its decision to declare the dividend, the Board of Directors evaluated such factors as the current and foreseeable liquidity and capital needs of Formula and felt comfortable declaring the dividend and rewarding our longstanding shareholder. The dividend will be paid on October 6, 2026 to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on September 22, 2026. The dividend will be paid in U.S dollars both with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and its American Depositary Receipts traded on the Nasdaq Global Select Market. In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30% (if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital) or 25% (for all other dividend recipients) of the dividend amount payable to each shareholder of record, subject to applicable exemptions. Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “We continue to demonstrate strong and consistent performance, delivering record-breaking results in the second quarter and first half of 2026 across all key financial metrics: revenues, gross profit, operating income, net income and EBITDA. These results reflect the breadth of our portfolio and our teams' commitment to operational excellence. With solid execution across all business segments, we remain confident in our ability to drive sustained, profitable growth throughout the second half of 2026.” “Matrix reported its second quarter and first half record-breaking results recorded across all its key financial indices: revenues, gross profit, operating income, net income and EBITDA. Matrix revenues for the second quarter grew by 6.3% year over year, when measured based on New Israeli Shekel, reaching an all-time second quarter high of NIS 2.1 billion (approximately $718.3 million). Operating income for the second quarter increased by 10.6%, year over year, when measured based on New Israeli Shekel, reaching an all-time second quarter high of NIS 202.2 million (approximately $68.5 million). We are pleased with Matrix’s continued recognition as a market leader in Israel in the implementation of the fastest-growing technologies, such as cloud, cyber, digital, data, DevOps and AI, which enable the company to create significant value for its customers in managing, streamlining, accelerating and making its businesses thrive. Matrix's leading position, particularly in high-demand technologies and solutions, its broad range of technological services and solutions, its wide sectoral diversification, and its extensive U.S. operations all enable Matrix to maintain its vitality, value, and leadership in the industry for its clients, partners, and investors. These strengths allow Matrix to continue demonstrating sustained growth even amid a complex business and macroeconomic environment.” “Michpal Technologies opened 2026 with a strong first half, reflecting continued growth across all financial metrics and demonstrating its ability to leverage synergies and expand revenues and profits across it two business segments. With a solid cash position of approximately NIS 266.4 million (approximately $89.5 million), Michpal Technologies is actively advancing its acquisition strategy - completing the acquisition of Zviran Group in April 2026 - while strengthening its leadership position in payroll, HR, and financial solutions. At the same time, Michpal Technologies continues to invest in R&D and views AI, cloud technologies, and intelligent automation as key drivers for enhancing its competitive advantage and developing new products. Michpal Technologies reported Second Quarter 2026 revenues of approximately NIS 63.6 million (approximately $21.6 million), growing approximately 31.2% year over year. Adjusted EBITDA increased by approximately 36% year over year to approximately NIS 25.2 million (approximately $8.5 million) compared to NIS 18.5 million (approximately $5.2 million) in the same period last year. Adjusted net income attributable to shareholders nearly doubled year over year, reaching approximately NIS 16.1 million (approximately $5.5 million) compared to approximately NIS 8.3 million (approximately $2.3 million) in the same period last year.” “TSG concluded the second quarter of 2026 with record-breaking results, demonstrating significant growth in revenue and profits. Revenues for the second quarter increased by approximately 22% year over year to a second quarter record-breaking NIS 127.6 million (approximately $43.2 million). Operating income for the Second quarter of 2026 increased by 22.7% year-over-year to NIS 12.0 million (approximately $4.0 million), compared to NIS 9.8 million (approximately $2.7 million) in the same period last year. This momentum reflects organic growth in TSG’s operations and the expansion of its technological capabilities in the areas of command and control systems and unmanned aerial vehicles (UAVs), broadening its portfolio of capabilities and further establishing TSG as a significant player in the defense sector. We are seeing growing demand for TSG’s capabilities, both in Israel and in international markets, with TSG focusing on delivering differentiated, high-quality solutions to address this demand. TSG also evaluating potential mergers and acquisitions in the engineering and manufacturing sectors as part of its strategy to further enhance its value proposition to defense companies. In January 2026, TSG completed a private placement raising approximately NIS 192 million from leading institutional investors, bringing total equity capital raised since October 2025 to approximately NIS 296 million. In June 2026, TSG further strengthened its financial position through the issuance of Series A debentures, raising gross proceeds of approximately NIS 223 million. Following the issuance, TSG holds approximately NIS 497.7 million in cash, providing substantial financial flexibility to support the continued expansion of its operations and capabilities, including through strategic acquisitions. In March 2026, TSG acquired Mabat 3D, specializing in spatial detection and mapping, and in May 2026 acquired Production Floor, a provider of end-to-end manufacturing and integration services, primarily for defense customers. These acquisitions, together with TSG’s continued acceleration of AI-based capabilities and ongoing organic growth, strengthen TSG’s position as a leading provider of integrated, end-to-end defense technology solutions.” Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula’s stand-alone financial position in reference to its assets and liabilities as the parent company of its group of companies. These financial measures are prepared consistently with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula’s share in the investees’ accumulated undistributed earnings and other comprehensive income or loss. Formula believes that these financial measures provide useful information to management and investors regarding Formula’s stand-alone financial position. Formula’s management uses these measures to compare the Company’s performance in the current period to that of prior periods for trend analysis. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula’s financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with IFRS. Formula Systems urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position. About Formula Formula Systems (1985) Ltd., whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit www.formulasystems.com. Press Contact: Formula Systems (1985) Ltd. +972-3-5389305 [email protected] Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on Formula’s (“we,” “us” or “our”) beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including persistent inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and telecom industries, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical factors, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries’ principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission on May 13, 2026, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we do not undertake to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations.

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Formula Systems (1985) (TASE:FORTY) drew attention after reporting first quarter 2026 results, with sales of US$738.29 million and net income of US$35.64 million, alongside higher basic and diluted earnings per share. See our latest analysis for Formula Systems (1985). The latest quarterly numbers arrived after a weak run for the stock, with a 7 day share price return of down 11.53% and a year to date share price return of down 31.26%. However, the 3 year total shareholder return is 69.59%, so recent momentum has faded against a stronger longer term record. If this earnings update has you reassessing your watchlist, it could be a good moment to broaden your search using our screener for 102 top founder-led companies With earnings per share higher than last year but the share price under pressure in 2026, it raises a key question for you: is Formula Systems (1985) now trading below its fundamentals, or is the market already pricing in future growth? On valuation, Formula Systems (1985) is currently trading on a P/E of 32.3x, compared with a peer average of 19.3x and an Asian IT industry average of 18.6x. This points to a richer pricing for its earnings at the last close of ₪371.2. The P/E ratio compares the company’s share price with its earnings per share. A higher P/E suggests investors are paying more for each unit of current earnings. For an IT and software focused group like Formula Systems (1985), that kind of premium can reflect expectations for future earnings strength or perceived quality of the earnings stream, rather than just today’s profit level. Here, the market is assigning a materially higher multiple than both direct peers and the broader Asian IT industry, even though the company has reported a decline of 21.5% in earnings over the past year and its current net profit margin of 2.3% is below last year’s 2.8%. That gap suggests investors are either looking past recent profit pressure or placing particular value on its earnings profile and long term track record, while accepting a lower Return on Equity of 7.6% and a DCF estimate of future cash flow value at ₪72.61 per share that is well below the current price. Against an industry average P/E of 18.6x, a multiple of 32.3x is a clear step up rather than a marginal premium. This means you are paying significantly more than the sector norm for the same unit of earnings, without a fair ratio guide to indicate where the market might eventually settle. See what the numbers say about this price — find out in our valuation breakdown. Result: Price-to-Earnings of 32.3x (OVERVALUED) However, you still need to weigh risks such as the wide gap to the ₪72.61 DCF estimate and the relatively low 2.3% net margin if conditions tighten. Find out about the key risks to this Formula Systems (1985) narrative. The P/E of 32.3x suggests a premium stock, but our DCF model points in the opposite direction, with an estimated future cash flow value of ₪72.61 per share versus a market price of ₪371.2. That kind of gap signals valuation risk you cannot ignore, so which lens do you trust more? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Formula Systems (1985) for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 209 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. If Formula Systems (1985) is on your radar, do not stop there. Use this moment to widen your search and avoid missing other compelling ideas. Target resilient income by scanning for companies with generous yields and robust metrics through our 487 dividend fortresses. Spot potential mispricings fast by comparing quality, financial strength, and value in our 209 high quality undervalued stocks. Zero in on financially steady options by filtering for companies in our solid balance sheet and fundamentals stocks screener (400 results). 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. Companies discussed in this article include FORTY.TA. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Revenues for the first quarter increased by 19.2% year over year, reaching a first quarter record-breaking $738.3 million. Net income attributable to Formula Systems’ shareholders for the first quarter increased by 84.5% year over year, reaching a first quarter all-time high of $35.6 Million. OR YEHUDA, Israel, May 28, 2026 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula” or the “Company”), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its results of operations for the first quarter ended March 31, 2026. Financial Highlights for the First Quarter of 2026 On February 24, 2026, Matrix IT Ltd. (“Matrix”) and Magic Software Enterprises Ltd. (“Magic Software”), both subsidiaries of the Company, announced the completion of their merger agreement. The transaction, which was effected through a reverse triangular merger, resulted in Matrix acquiring all of the issued and outstanding share capital of Magic Software in consideration for the allotment of 28,861,564 ordinary shares of Matrix to Magic Software’s shareholders (0.5878202 Matrix ordinary shares for each Magic Software ordinary share). Following completion of the merger, Magic Software became a wholly owned (100%) subsidiary of Matrix, its shares were delisted from trading on Nasdaq and the Tel Aviv Stock Exchange, and it ceased to be a public company. Revenues for the first quarter ended March 31, 2026 increased by 19.2% year over year, reaching a first quarter record-breaking $738.3 million, compared to $619.4 million in the same period last year. Operating income for the first quarter ended March 31, 2026 increased by 65.6% year over year, reaching a first quarter record-breaking $82.0 million compared to $49.5 million in the same period last year. Operating income for the first quarter of 2026 included a capital gain of $16.8 million resulting from exercise of employee stock-based compensation and a secondary private placement transaction completed by our affiliate, TSG IT Advanced Systems Ltd. (“TSG”), in January 2026. On January 13, 2026, TSG’s Board of Directors approved a capital raise through a private placement to institutional investors, pursuant to which TSG raised approximately NIS 192 million (approximately $58.9 million) through the issuance of 320,374 ordinary shares at a price of NIS 600 per share, together with 128,150 non-tradable warrants (allocated at no additional consideration at a ratio of 0.4 warrant per share), each exercisable for one ordinary share at an exercise price of NIS 720 per share through July 22, 2027. The terms of the private placement also provides for a potential additional investment by the institutional investors of approximately NIS 92 million (approximately $29.1 million) in the event all warrants are fully exercised. The allocated shares and warrants represent approximately 9.23% of TSG’s fully diluted share capital. As a result of this transaction and the exercise of TSG’s employee stock-based compensation,during the first quarter of 2026 Formula’s ownership interest in TSG was diluted from 37.33% to 33.08%, causing the $16.8 million capital gain. Excluding this capital gain, operating income would have increased by 31.7% year over year, to $65.2 million. Net income from continued operations attributable to Formula’s shareholders for the first quarter ended March 31, 2026, increased by approximately 203.4% year over year, reaching a first quarter record-breaking $35.6 million, or $2.25 per fully diluted share, compared to $11.7 million, or $0.75 per fully diluted share, in the same period last year. Excluding the impact of the capital gain resulting from TSG’s secondary private placement transaction and the exercise of TSG’s employee stock-based compensation, net income from continued operations attributable to Formula’s shareholders would have increased by 60.5% year over year, to $18.9 million. Net income attributable to Formula’s shareholders for the first quarter ended March 31, 2026 increased by approximately 84.5% year over year, reaching a first quarter record-braking $35.6 million, or $2.25 per fully diluted share, compared to $19.3 million, or $1.23 per fully diluted share, in the same period last year. On May 14, 2026, Formula announced that its board of directors has approved the distribution of a special cash dividend, based on its results for 2025, including, in particular, the completion of the acquisition of Formula’s former subsidiary Sapiens International Corporation (“Sapiens”) by Advent, of $13.045 per share, or approximately $200.0 million in total. The dividend will be paid in U.S dollars on June 4, 2026, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on May 25, 2026. As of March 31, 2026, Formula held 47.67%, 18.68%, 69.09%, 33.08%, 90.09%, 80%, 100%, 100%, 51% and 100% of the outstanding ordinary shares of Matrix IT Ltd., SI Swan UK Topco Limited., Michpal Technologies Ltd., TSG IT Advanced Systems Ltd., Insync Staffing, Inc., Ofek Aerial Photography Ltd., ZAP Group Ltd., Shamrad Electronic (1997) Ltd., Hashahar Telecom And Electricity Ltd., and Formula Infrastructure Ltd., respectively. Consolidated cash and cash equivalents and short-term bank deposits totaled approximately $1.18 billion as of March 31, 2026, compared to $1.28 billion as of December 31, 2025. Total equity as of March 31, 2026 was $1.82 billion (representing 50.1% of the total consolidated statements of financial position), compared to $1.78 billion (representing 49.6% of the total consolidated statements of financial position) as of December 31, 2025. The above comparative figures for the first quarter ended March 31, 2025 reflect the reclassification of the results of Sapiens (of which Formula sold its controlling interest in December 2025), as discontinued operations, in accordance with IFRS 5. Similarly, the Company’s record-breaking consolidated results for the quarter ended March 31, 2026 (as described above) are relative to the Company’s historical consolidated results in prior years that exclude Sapiens. Debentures Covenants As of March 31, 2026, Formula was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Target equity attributable to Formula’s shareholders (excluding non-controlling interests): above $325 million. Actual equity attributable to Formula’s shareholders as of March 31, 2026 was $1.38 billion. Covenant 2 Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula’s Series C and D Secured Debentures): below 65%. Actual ratio of net financial indebtedness to net capitalization, as of March 31, 2026 was (55.46%). Covenant 3 Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): below 5. Actual ratio of net financial indebtedness to EBITDA as of March 31, 2026 was (376.94%). Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “We continue to demonstrate strong and consistent performance, delivering record-breaking results in the first quarter across all key financial metrics: revenues, gross profit, operating income, net income and EBITDA. These results reflect the breadth of our portfolio and our teams’ commitment to operational excellence. With solid execution across all business segments, we remain confident in our ability to drive sustained, profitable growth throughout 2026.” “Matrix reported a strong start to 2026 in its first quarter following the completion of the merger with Magic Software, with significant growth in profitability and improved margins. First quarter revenues increased by 2.4% year over year, reaching approximately NIS 2.13 billion (approximately $681.6 million). On a constant currency basis (when measured based on NIS), revenues increased by approximately 8.9%. Operating income for the quarter increased by 11.0%, reaching approximately NIS 203.1 million (approximately $65.1 million), while operating margin improved to 9.5% from 8.8% in the comparable quarter last year. On a constant currency basis (when measured based on NIS), operating income increased by approximately 18.0%. Matrix continued to experience strong demand across IT services, cybersecurity, cloud, data and AI solutions, including increasing demand for enterprise-scale AI infrastructure and implementation projects. Matrix’s defense-related activities also continued to grow at a strong pace, supported by increasing demand from the Israeli defense sector and enhanced further through the integration of Commit’s activities. Matrix believes that the merger with Magic Software significantly strengthens its international presence, particularly in the U.S. market, expands its technological capabilities and service portfolio, and positions the combined company among the world’s leading publicly traded IT services companies.” “Michpal Technologies opened 2026 with a strong first quarter, reflecting continued growth across all financial metrics and demonstrating its ability to leverage synergies and expand revenues and profits across it two business segments. With a solid cash position of approximately NIS 302 million (approximately $95.4 million), Michpal Technologies is actively advancing its acquisition strategy - completing the acquisition of Zviran Group in April 2026 - while strengthening its leadership position in payroll, HR, and financial solutions. At the same time, Michpal Technologies continues to invest in R&D and views AI, cloud technologies, and intelligent automation as key drivers for enhancing its competitive advantage and developing new products. Michpal Technologies reported first quarter 2026 revenues of approximately NIS 52.8 million (approximately $16.9 million), growing approximately 8.2% year over year. Adjusted EBITDA increased by approximately 14.1% year over year to approximately NIS 20.4 million (approximately $6.5 million). Adjusted net income attributable to shareholders nearly doubled year over year, reaching approximately NIS 13.6 million (approximately $4.4 million) compared to approximately NIS 6.9 million (approximately $1.9 million) in the same period last year.” “TSG opened 2026 with record-breaking first quarter results, demonstrating continued significant growth in revenues and profits across its business segments. Revenues for the first quarter of 2026 increased by approximately 19.4% year over year to a record-breaking NIS 120.7 million (approximately $38.7 million), compared to NIS 101 million (approximately $27.9 million) in the same period last year. Operating income for the first quarter increased by approximately 48.9% year over year to NIS 13.1 million. TSG continues to execute on its growth and expansion strategy, advancing its capabilities in end-to-end counter-UAV and drone threat solutions spanning detection and precise spatial mapping, through integration and manufacturing, to the delivery of complete operational systems for customers in Israel and globally. In January 2026, TSG completed a private placement raising approximately NIS 192 million from leading institutional investors, bringing total capital raised since October 2025 to approximately NIS 296 million. In March 2026, TSG acquired Mabat 3D, specializing in spatial detection and mapping, and in May 2026 signed an agreement to acquire Production Floor, a provider of end-to-end manufacturing and integration services, primarily for defense customers. These acquisitions, together with TSG’s continued acceleration of AI-based capabilities and ongoing organic growth, strengthen TSG’s position as a leading provider of integrative, end-to-end defense technology solutions.” Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula’s stand-alone financial position in reference to its assets and liabilities as the parent company of its group of companies. These financial measures are prepared consistently with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula’s share in the investees’ accumulated undistributed earnings and other comprehensive income or loss. Formula believes that these financial measures provide useful information to management and investors regarding Formula’s stand-alone financial position. Formula’s management uses these measures to compare the Company’s performance in the current period to that of prior periods for trend analysis. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula’s financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with IFRS. Formula Systems urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position. About Formula Formula Systems (1985) Ltd., whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit www.formulasystems.com. Press Contact: Formula Systems (1985) [email protected] Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on Formula’s (“we,” “us” or “our”) beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including persistent inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and telecom industries, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical factors, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries’ principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission on May 13, 2026, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we do not undertake to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations. FORMULA SYSTEMS (1985) LTD.CONSOLIDATED CONDENSED STATEMENTS OF PROFIT OR LOSSU.S. dollars in thousands (except per share data) FORMULA SYSTEMS (1985) LTD.CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONU.S. dollars in thousands FORMULA SYSTEMS (1985) LTD.STAND-ALONE STATEMENTS OF FINANCIAL POSITIONU.S. dollars in thousands

PRESS RELEASE 2025 Full-year revenues increased by 18.4% year over year, reaching $2.63 billion. Net income attributable to Formula shareholders reached $606.5 million following the completion of Sapiens’ acquisition by Advent. OR YEHUDA, Israel, March 26, 2026 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula” or the “Company”), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its fourth quarter and full year 2025 results of operations. Financial Highlights for the Fourth Quarter Ended December 31, 2025 On August 13, 2025, Sapiens International Corporation N.V. (hereafter, “Sapiens”), a subsidiary of the Company at that time, announced that it had entered into a definitive agreement to be acquired by Advent, a leading global private equity investor, for $43.50 per common share in an all-cash transaction. Under the terms of the agreement, the Company will retain a significant minority ownership interest in Sapiens, which, under the new structure, represents approximately an 18.68% ownership stake, held through SI Swan UK Topco Limited, (Sapiens’ ultimate parent company). Retaining this meaningful minority position reflects the Company’s continued conviction in Sapiens’ long-term strategy, its talented team, and the opportunities ahead in partnership with Advent to accelerate the transition to AI and SaaS and deliver the next generation of insurance solutions for Sapiens’ customers. On November 19, 2025, Sapiens held an extraordinary general meeting of shareholders, at which all proposals relating to the definitive agreement were approved. The transaction was completed on December 17, 2025. Following the completion of the transaction, the Company ceased to have a controlling interest in Sapiens and, accordingly, presented the results of Sapiens separately as discontinued operations in its consolidated financial statements for the fourth quarter and full year, in accordance with IFRS 5. Based on the Company’s results, and particularly the completion of the acquisition of Sapiens by Advent, the Company’s Board of Directors expects to distribute a dividend in the aggregate amount of up to $200 million, subject to approval of the Company’s audited financial statements for the fiscal year ended December 31, 2025. The Company expects to provide further information, including with respect to the record date and payment date, following the filing of its Annual Report on Form 20-F for the fiscal year ended December 31, 2025 (expected by mid-May 2026). Revenues for the fourth quarter ended December 31, 2025, increased by 26.9% year over year, reaching a fourth quarter record-breaking $708.4 million, compared to $558.2 million in the same period last year. Operating income for the fourth quarter ended December 31, 2025 decreased by 13.5% year over year, to $41.6 million compared to $48.1 million in the same period last year. The decrease in operating income primarily reflected higher amortization expenses relating to intangible assets. During the fourth quarter of 2025, the Company reassessed and revised the estimated useful lives of certain acquired customer relationship intangible assets related to a non-core activity. As a result of this change in accounting estimate, amortization expense increased by approximately $18.7 million for the quarter. The revision reflects, among other factors, changes in the expected pattern of economic benefits from these assets, including the impact of evolving technology conditions and market conditions in Israel over the past two years, which have adversely affected the relevant sector. This activity does not represent a core or strategic focus of the Company’s operations. Excluding the impact of this higher amortization expense, adjusted operating income for the fourth quarter ended December 31, 2025 would have been $60.3 million, representing an increase of 25.5% compared to the same period last year. Net income from continued operation attributable to Formula Systems’ shareholders for the fourth quarter ended December 31, 2025, decreased by approximately 62.7% year over year, to approximately $4.3 million, or $0.27 per fully diluted share, compared to $11.7 million, or $0.74 per fully diluted share, in the same period last year. Excluding the impact of the higher amortization expenses resulting from revising the estimated useful lives of certain acquired customer relationship intangible assets, net income from continued operation attributable to Formula Systems’ shareholders for the fourth quarter ended December 31, 2025, would have increased by approximately 60.9% to $18.7 million compared to the same period last year. Net income attributable to Formula's shareholders for the fourth quarter ended December 31, 2025, reached a record-braking $554.8 million, or $35.03 per fully diluted share, compared to $20.1 million, or $1.28 per fully diluted share, in the same period last year. The increase in net income attributable to Formula's shareholders was primarily attributable to capital gain recognized upon completion of the transaction with Advent resulting in the loss of control by the Company and the results of Sapiens’ operations for the quarter. The contribution from Sapiens, including this gain, amounted to approximately $550.4 million. Financial Highlights for the Full Year Ended December 31, 2025 Revenues for the full year ended December 31, 2025 increased by 18.4% year over year to approximately $2.63 billion, compared to $2.22 billion in the same period last year. Operating income for the full year ended December 31, 2025 increased by 7.1% year over year, reaching $196.4 million, compared to $183.3 million in the same period last year. Excluding the impact of the higher amortization expenses resulting from revising the estimated useful lives of certain acquired customer relationship intangible assets, operating income for the full year ended December 31, 2025 would have increased by approximately 17.3% to $215.1 million compared to the same period last year. Net income from continued operation attributable to Formula Systems’ shareholders for the full year ended December 31, 2025 decreased by approximately 24.8% year over year, to approximately $36.5 million, or $2.3 per fully diluted share, compared to $48.5 million, or $3.1 per fully diluted share, in the same period last year. Excluding the impact of the higher amortization expenses resulting from revising the estimated useful lives of certain acquired customer relationship intangible assets, net income from continued operation attributable to Formula Systems’ shareholders for the full year ended December 31, 2025 would have increased by approximately 4.9% to $50.9 million compared to the same period last year. Net income attributable to Formula’s shareholders for the full year ended December 31, 2025 reached a record-breaking $606.5 million, or $38.39 per fully diluted share, compared to $79.7 million, or $5.09 per fully diluted share, in the same period last year. The increase in net income attributable to Formula's shareholders was primarily attributable to capital gain recognized upon completion of the transaction with Advent resulting in the loss of control by the Company and the results of Sapiens’ operations for the full year. The contribution from Sapiens, including this gain, amounted to approximately $570 million. As of December 31, 2025, Formula held 48.12%, 18.68%, 46.71%, 100%, 37.33%, 90.1%, 80%, 100%, 100%, 51% and 100% of the outstanding ordinary shares of Matrix IT Ltd., SI Swan UK Topco Limited., Magic Software Enterprises Ltd., Michpal Technologies Ltd., TSG IT Advanced Systems Ltd., Insync Staffing, Inc., Ofek Aerial Photography Ltd., ZAP Group Ltd., Shamrad Electronic (1997) Ltd., Hashahar Telecom And Electricity Ltd., and Formula Infrastructure Ltd., respectively. Consolidated cash and cash equivalents and short-term bank deposits totaled approximately $1.3 billion as of December 31, 2025, compared to $563.2 million as of December 31, 2024. Total equity as of December 31, 2025 was $1.8 billion (representing 49.9% of the total consolidated statements of financial position), compared to $1.39 billion (representing 46.1% of the total consolidated statements of financial position) as of December 31, 2024. Debentures Covenants As of December 31, 2025, Formula was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Target equity attributable to Formula’s shareholders (excluding non-controlling interests): above $325 million. Actual equity attributable to Formula’s shareholders as of December 31, 2025 was $1.4 billion. Covenant 2 Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula’s Series C and D Secured Debentures): below 65%. Actual ratio of net financial indebtedness to net capitalization, as of December 31, 2025 was (87.45%). Covenant 3 Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): below 5. Actual ratio of net financial indebtedness to EBITDA as of December 31, 2025 was (463.16%). Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “Formula Systems concludes 2025 with strong operating performance and significant strategic milestones that position the group for continued long-term growth. Our results reflect solid revenue expansion across our core activities, alongside the successful execution of key transactions, most notably the completion of the Sapiens transaction, which contributed significantly to our reported net income. Across the group, we continue to see strong demand for advanced technology solutions, particularly in areas such as cloud, cybersecurity, data, and AI, driving growth across our subsidiaries. At the same time, we remain focused on disciplined execution, operational excellence, and strengthening our global footprint.” “On February 24, 2026, Matrix and Magic Software, both subsidiaries of Formula Systems, announced the completion of their merger agreement. Under the terms of the merger agreement, Magic Software shareholders received shares in the merged entity at an exchange ratio of 68.875% / 31.125% between Matrix and Magic Software shareholders, respectively, on a fully diluted basis. On a pro forma basis, the combined company reported 2025 revenues of approximately NIS 8.4 billion (approximately $2.4 billion), EBITDA of approximately NIS 1.0 billion (approximately $0.3 billion), and net income attributable to shareholders of approximately NIS 444 million (approximately $129 million), positioning it among the ten largest publicly traded IT services companies in the world. This strategic merger is designed to unlock substantial value for shareholders of both companies by creating a more robust, dynamic, and globally competitive organization. This transaction marks a defining moment in the history of both Matrix and Magic Software, representing a transformative step forward. By uniting two highly complementary organizations, this merger will create a stronger, more diversified company with expanded capabilities to serve clients worldwide, accelerate technological innovation, and drive long-term value creation.” “Matrix reported its best fourth quarter in history with fourth quarter record-breaking results recorded across all its key financial indices: revenues, gross profit, operating income, net income and EBITDA. Matrix revenues for the fourth quarter grew by 16.4% year over year reaching an all-time fourth quarter high of NIS 1.60 billion (approximately $492.2 million). Matrix revenues for the year grew by 11.8% year over year reaching an all-time high of NIS 6.2 billion (approximately $1.8 billion). Operating income for the fourth quarter grew by 15.0%, reaching NIS 137.9 million (approximately $42.4 million). Operating income for the full year grew by 16.0%, to NIS 522.1 million (approximately $151.8 million). We are pleased with Matrix’s continued recognition as a market leader in Israel in the implementation of fastest-growing technologies, such as cloud, cyber, digital, data, DevOps and AI, which enable the company to create significant value for its customers in managing, streamlining, accelerating and making its businesses thrive. Matrix continues to see strong demand for services and solutions across cybersecurity, cloud, data, and AI, in both the commercial and defense sectors. Matrix’s defense activities, together with the contribution of Commit following the Magic transaction, are generating annual revenues exceeding NIS 1 billion and continue to deliver strong double-digit growth. At the same time, the rapid evolution of AI is expanding the IT services market, driving increased demand for enterprise projects. Matrix is well positioned at the intersection of technological innovation and enterprise implementation, with significant growth potential across its core areas of activity.” “Michpal Technologies’ concluded 2025, a year in which it became a public company, with strong results and continued growth, reflecting its ability to leverage synergies and expand revenues and profits. With a solid cash position, the Company is advancing its acquisition strategy while strengthening its position in payroll, HR, and financial solutions. At the same time, we see AI as a key driver for enhancing its competitive advantage and supporting future growth, alongside ongoing efforts to expand through additional acquisition opportunities. Michpal concluded the full year of 2025 with record-breaking revenues of NIS 198.4 million (approximately $57.7 million), growing 24.2% year over year. Adjusted EBITDA increased by 43.6% year over year to a record-breaking NIS 76.1 million (approximately $22.1 million). Michpal Technologies offers comprehensive proprietary on-premise and web-based payroll software solutions and related services, as well as integrated specialized management systems in the field of financial accounting, taxation, and compliance for accounting professionals (accountants and tax consultants), bookkeepers, controllers, and CFOs.” “TSG concluded the fourth quarter and full year of 2025 with record-breaking results, demonstrating significant growth in revenue and profits across all its business segments. Revenues for the fourth quarter increased by approximately 34.1% year over year to a record-breaking NIS 114.8 million (approximately $35.3 million). Revenues for the full year 2025 increased by approximately 34% year over year to a record-breaking NIS 430 million (approximately $124.6 million). Adjusted EBITDA for the fourth quarter of 2025 increased by 33.9% year-over-year to a record-breaking NIS 17.8 million (approximately $5.5 million), compared to NIS 13.3 million (approximately $3.6 million) in the same period last year. Adjusted EBITDA for the full year 2025 increased by 31% year-over-year to record-breaking NIS 63.8 million (approximately $18.5 million), compared to NIS 48.7 million (approximately $13.1 million) in the same period last year. TSG announced several potential strategic business combination transactions that are expected to enhance its capabilities across the entire value chain of counter-UAV solutions - from detection and precise mapping, through autonomous interception platforms, to manufacturing and integration of operational systems. The integration of these capabilities with TSG’s command and control systems, which incorporate artificial intelligence, would enable TSG to offer end-to-end solutions and support real-time decision-making and interception capabilities to address low-altitude threats.” “Over the past year, Zap Group, Israel's leading consumer websites company, has demonstrated agility in adapting to evolving market dynamics. The launch of its groundbreaking E-Commerce Marketplace platform marks a pivotal transformation in its business model. By integrating cutting-edge technology and service-driven solutions, Zap Group has enhanced its relationships with small and medium-sized businesses, driving higher sales volumes, while deepening connections with end consumers through a 360-degree, holistic experience. In its first year of operation, the Marketplace platform has delivered remarkable results, with tens of thousands of transactions generating tens of millions of NIS. Currently, over 400 stores feature more than 100,000 products, reflecting strong adoption and success. The platform enables businesses to engage directly with consumers, fostering personalized relationships, leveraging data-driven insights, and effectively managing customer journeys. This innovation positions Zap Group at the forefront of Israel’s digital economy. In response to broader economic challenges, including the geopolitical situation in Israel since October 2023, Zap Group has adopted a prudent approach to investments and operations. While prioritizing operational efficiency and cost optimization, Zap Group remains committed to growth. As it continues to expand its digital platforms, enhance customer engagement, and optimize data management, Zap Group is well-positioned to deliver seamless and value-driven e-commerce experiences.” Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula Systems’ stand-alone financial position in reference to its assets and liabilities as the parent company of its group of companies. These financial measures are prepared consistently with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula Systems’ share in the investees’ accumulated undistributed earnings and other comprehensive income or loss. Formula Systems believes that these financial measures provide useful information to management and investors regarding Formula Systems’ stand-alone financial position. Formula Systems’ management uses these measures to compare the Company’s performance in the current period to that of prior periods for trend analysis. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula Systems’ financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with GAAP. Formula Systems urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position. About Formula Formula Systems, whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit www.formulasystems.com. Press Contact: Formula Systems (1985) Ltd. +972-3-5389305 [email protected] Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on Formula Systems’ (“we,” “us” or “our”) beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including persistent inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and the telecom, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries’ principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on May 14, 2025, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations.

OR YEHUDA, Israel, Nov. 20, 2025 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula Systems,” or the “Company”), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its third quarter and nine-months period ended September 30, 2025 results of operations. Financial Highlights for the Quarter Ended September 30, 2025 On August 13, 2025, Sapiens International Corporation N.V, (hereafter “Sapiens”) announced that it has entered into a definitive agreement to be acquired by Advent, a leading global private equity investor, for $43.50 per common share, in an all-cash transaction. Under the terms of the agreement, the Company will continue to retain significant minority ownership in Sapiens, which under the new structure will translate into an approximately 18% ownership stake. Retaining this meaningful minority position reflects the Company’s continued conviction in Sapiens’ long-term strategy, its talented team, and the exciting opportunities ahead in partnership with Advent to accelerate the transition to AI and SaaS, delivering the next generation of insurance solutions for Sapiens customers. On November 19, 2025, Sapiens held an extraordinary general meeting of shareholders at which all proposals relating to the definitive agreement were approved. The transaction is expected to close during 2025 fourth quarter or during the first quarter of 2026, subject to the satisfaction of customary closing conditions and receipt of regulatory approvals. Following the signing of the definitive agreement by Sapiens’ to be acquired by Advent and its approval by Sapiens’ shareholders, the consolidated results of Sapiens are reported separately as discontinued operations in our third quarter financial statements. Revenues for the third quarter ended September 30, 2025, increased by approximately 23.6% year over year, to approximately $696.6 million, compared to approximately $563.6 million in the same period last year. Operating income for the third quarter ended September 30, 2025, increased by approximately 10.8% year over year, to approximately $54.6 million, compared to approximately $49.2 million in the same period last year. Operating income for the third quarter ended September 30, 2024 included a capital gain in an amount of $6.5 million, realized from the initial public offering of our affiliate, TSG IT Advanced Systems Ltd, on the Tel-Aviv stock exchange. This gain reflected the appreciation in value of our investment in TSG IT Advanced Systems Ltd and was recorded under “Other income, net” in our consolidated financial statements. Excluding the capital gain recorded with respect to TSG IT Advanced Systems’ initial public offering, operating income for the third quarter ended September 30, 2025 would have increased by approximately 27.7% compared to the same period last year. Net income from continued operation attributable to Formula Systems’ shareholders for the third quarter ended September 30, 2025, decreased by approximately 26.4% year over year, to approximately $11.6 million, or $0.73 per fully diluted share, compared to $15.8 million, or $1.00 per fully diluted share, in the same period last year. Excluding the impact of the capital gain recorded with respect to TSG IT Advanced Systems initial public offering, net income from continued operation attributable to Formula Systems’ shareholders for the third quarter ended September 30, 2025, would have increased by approximately 25.2% compared to the same period last year. Net income attributable to Formula Systems’ shareholders for the third quarter ended September 30, 2025, decreased by approximately 26.6% year over year, to approximately $17.3 million, or $1.08 per fully diluted share, compared to $23.6 million, or $1.51 per fully diluted share, in the same period last year. Excluding the impact of the capital gain recorded with respect to TSG IT Advanced Systems initial public offering, net income attributable to Formula Systems’ shareholders for the third quarter ended September 30, 2025 would have increased by approximately 1.2% compared to the same period last year. Financial Highlights for the Nine-Months Period Ended September 30, 2025 Revenues for the nine-months period ended September 30, 2025, increased by approximately 15.6% to approximately $1.92 billion, compared to approximately $1.66 billion in the same period last year. Operating income for the nine-months period ended September 30, 2025, increased by approximately 14.4% to approximately $154.8 million, compared to approximately $135.3 million in the same period last year. Excluding the capital gain recorded with respect to TSG IT Advanced Systems initial public offering, operating income for the nine-months period ended September 30, 2025, would have increased by approximately 20.2% compared to the same period last year. Net income from continued operation attributable to Formula Systems’ shareholders for the nine-months period ended September 30, 2025, decreased by approximately 12.8% year over year, to approximately $32.2 million, or $2.02 per fully diluted share, compared to approximately $36.9 million, or $2.36 per fully diluted share, in the same period last year. Excluding the impact of the capital gain recorded with respect to TSG IT Advanced Systems initial public offering, net income from continued operation attributable to Formula Systems’ shareholders for the nine-months period ended September 30, 2025, would have increased by approximately 5.9% compared to the same period last year. Net income attributable to Formula Systems’ shareholders for the nine-months period ended September 30, 2025, decreased by approximately 13.3% year over year, to approximately $51.7 million, or $3.24 per fully diluted share, compared to approximately $59.6 million, or $3.81 per fully diluted share, in the same period last year. Excluding the impact of the capital gain recorded with respect to TSG IT Advanced Systems initial public offering, net income attributable to Formula Systems’ shareholders for the nine-months period ended September 30, 2025, would have decreased by approximately 2.7% compared to the same period last year. As of September 30, 2025, Formula Systems held 48.12%, 43.42%, 46.71%, 69.1%, 42.32%, 90.1%, 80%, 100%, 100% and 51% of the outstanding ordinary shares of Matrix IT Ltd., Sapiens International Corporation N.V., Magic Software Enterprises Ltd., Michpal Technologies Ltd., TSG IT Advanced Systems Ltd., Insync Staffing Solutions, Inc., Ofek Aerial Photography Ltd., ZAP Group Ltd., Shamrad Electronics (1997) Ltd., and Hashahar Telecom and Electricity Ltd., respectively. Consolidated cash and cash equivalents and short-term bank deposits totaled approximately $432.1 million as of September 30, 2025, compared to approximately $563.2 million as of December 31, 2024. Total equity as of September 30, 2025, was approximately $1.58 billion (representing 47.4% of the total consolidated statements of financial position), compared to approximately $1.39 billion (representing 46.1% of the total consolidated statements of financial position) as of December 31, 2024. Declaration of Dividend for the Third Quarter of 2025 Based on the Company’s results, the Company’s board of directors approved the distribution of a cash dividend in an amount of NIS 1.64 per share (approximately $0.50 per share) and in an aggregate amount of approximately NIS 25.2 million (approximately $7.7 million). The dividend is payable on January 13, 2026, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on December 30, 2025. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market. In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30% (if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital) or 25% (for all other dividend recipients) of the dividend amount payable to each shareholder of record, subject to applicable exemptions. Debentures Covenants As of September 30, 2025, Formula Systems was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Target equity attributable to Formula Systems’ shareholders (excluding non-controlling interests): required to be above $325 million. Actual equity attributable to Formula Systems’ shareholders as of September 30, 2025 was $777.7 million. Covenant 2 Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula Systems’ Series C and D Secured Debentures): required to be below 65%. Actual ratio of net financial indebtedness to net capitalization, as of September 30, 2025, was 6.34%. Covenant 3 Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): required to be below 5. Actual ratio of net financial indebtedness to EBITDA as of September 30, 2025 was 0.13. Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “We are very pleased to continue our strong momentum delivering solid and consistent results this quarter. Our performance underscores our sustained commitment to fostering durable growth and operational excellence across all major parts of our business lines. We take pride in our ongoing recognition as industry leaders, as we broaden and advance our capabilities in rapidly evolving technologies, including cloud, cybersecurity, digital solutions, data, DevOps and AI. These technologies enable us to provide significant value to our customers by supporting them in optimizing, accelerating and scaling their operations.” “Matrix reported its best third quarter in history with record-breaking results recorded across all its key financial indices: revenues, gross profit, operating income, net income and EBITDA. Matrix revenues for the third quarter grew by approximately 15.7% year over year, when measured based on New Israeli Shekel, reaching an all-time third quarter high of NIS 1.64 billion (approximately $488.0 million). Operating income for the third quarter increased by 21.5%, year over year, when measured based on New Israeli Shekel, reaching an all-time third quarter high of NIS 131.5 million (approximately $39.1 million). Matrix's leading position, particularly in high-demand technologies and solutions, its broad range of technological services and solutions, its wide sectoral diversification, and its wide U.S. operations all enable Matrix to maintain its vitality, value, and leadership in the industry for its clients, partners, and investors. These strengths allow Matrix to continue demonstrating growth even during challenging political and security periods, including the mobilization of hundreds of Matrix employees to reserve duty.” “Magic Software reported another strong quarter of growth and resilience, delivering record breaking third quarter and nine-months period performance in key financial indices, achieving all-time highs in revenues, gross profit and operating income, while continuing to strengthen its operational foundations and expand its strategic footprint in key markets, including the United States, where momentum remains robust. Magic Software results of operations demonstrate its strong position in the IT market along with the sustained demand for its digital, AI-driven and cloud transformation solutions, combined with disciplined execution across the organization. Magic Software revised its full-year 2025 revenue guidance, increasing the previous estimated range of $600 million to $610 million to a revised range of $610 million to $620 million. This updated guidance reflects Magic Software’s sustained operational momentum and favorable outlook for the fourth quarter of the fiscal year, representing an anticipated annual revenue growth rate of approximately 10.4% to 12.2%. We believe in Magic Software’s ability to sustain momentum and drive long-term profitability, delivering lasting value to its shareholders.” Matrix IT and Magic Software are now advancing into the final phase of completing the merger of Magic Software into Matrix IT, an undertaking that represents the largest merger ever executed in the Israeli IT sector, subject to receipt of all required regulatory approvals, including approval at the special general meetings of shareholders of each of the companies, both scheduled for December. This transaction constitutes for both companies a pivotal strategic milestone. The merger is expected to significantly enhance the combined entity’s scale, capabilities, and global positioning, creating one of the largest publicly traded IT services companies worldwide. Based on current share prices of both companies. the combined entity is projected to exceed a valuation of NIS 11 billion (approximately $3.4 billion) and will benefit from an expanded international footprint, with particular strengthening in its core target market in the United States. “Michpal Technologies’ successfully concluded on September 21, 2025 its initial public offering of 4,910,000 ordinary shares on the Tel-Aviv stock exchange at an initial public offering price of NIS 61.1 per share (approximately $18.6 per share) raising approximately NIS 288.7 million, net of issuance expenses (approximately $87.3 million). Michpal Technologies together with its subsidiaries (collectively, the “Michpal Group”) engage in the fields of payroll, recruitment, time and attendance, pension administration, and human resources, as well as in the provision of software solutions for business and financial processes. As part of its activities, the Michpal Group develops and offers a broad suite of services, software products and proprietary technological solutions covering the full spectrum of human capital management within organizations. These offerings integrate cloud-based, artificial intelligence and automation technologies, alongside advanced solutions for the management of complex (partly digital) business processes across multiple use cases. Michpal Technologies concluded the third quarter of 2025 with revenues of NIS 49.8 million (approximately $14.8 million), growing 24.1% year over year when measured based on New Israeli Shekel. “TSG concluded the third quarter of 2025 with strong results, demonstrating significant growth in revenue and profits. Revenues for the third quarter of 2025 increased by 30.4% year over year, when measured based on New Israeli Shekel, to NIS 109.8 million (approximately $32.6 million). Operating income for the third quarter, when measured based in New Israeli Shekel, increased by 50.9% year-over-year, when measured based on New Israeli Shekel, to NIS 10.1 million (approximately $3.0 million), compared to NIS 6.7 million (approximately $1.8 million) in the same period last year. TSG’s continued growth is driven by a combination of business combination and organic expansion, mainly in its defense-sector activities, including, among other things, the initial delivery of licenses to the United States Army pursuant to a strategic agreement with an American company. Concurrently, TSG is experiencing growing demand from local municipalities and public-sector entities.” Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula Systems’ stand-alone financial position in reference to its assets and liabilities as the parent company of its group of companies. These financial measures are prepared consistently with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula Systems’ share in the investees’ accumulated undistributed earnings and other comprehensive income or loss. Formula Systems believes that these financial measures provide useful information to management and investors regarding Formula Systems’ stand-alone financial position. Formula Systems’ management uses these measures to compare the Company’s performance in the current period to that of prior periods for trend analysis. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula Systems’ financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with GAAP. Formula Systems urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position. About Formula Systems Formula Systems, whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit www.formulasystems.com. Press Contact: Formula Systems (1985) Ltd. +972-3-5389487 [email protected] Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on Formula Systems’ (“we,” “us” or “our”) beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including persistent inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and the telecom, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries’ principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on May 14, 2025, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations.

Revenues for the second quarter increased by 11.3% year over year, reaching a second quarter all-time high of $743.4 million OR YEHUDA, Israel, Aug. 19, 2025 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula Systems,” or the “Company”), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its results of operations for the second quarter and first half period ended June 30, 2025. Financial Highlights for the Quarter Ended June 30, 2025 Revenues for the quarter ended June 30, 2025 increased by 11.3% year over year, reaching a second quarter all-time high of approximately $743.4 million, compared to approximately $667.7 million in the same period last year. This increase was attributable to the confluence of the revenue increases of its various subsidiary companies and affiliates during the quarter, as described in the “Comments of Management” below. Operating income for the quarter ended June 30, 2025 increased by 4.4% year over year, to approximately $67.9 million, compared to approximately $65.0 million in the same period last year. Operating income for the second quarter of 2024 included a one-time income item of approximately $2.9 million, related to a retroactive reimbursement from the Israeli National Insurance Institute in respect of Formula Systems subsidiaries’ employees who were called to reserve duty during the fourth quarter of 2023 and the first quarter of 2024. Excluding the impact of that one-time income in 2024, operating income for the second quarter of 2025 would have reflected an 9.3% year-over-year increase. Net income attributable to Formula Systems’ shareholders for the quarter ended June 30, 2025, decreased by approximately 20.1% year over year, to $15.1 million, or $0.95 per fully diluted share, compared to $18.8 million, or $1.20 per fully diluted share, in the same period last year. The decrease in net income attributable to Formula Systems’ shareholders was primarily driven by an increase in Financial expenses, net, which totaled approximately $10.2 million in the second quarter of 2025, compared to approximately $3.8 million in the same period last year. The increase in financial expenses mainly reflected adverse exchange rate differences resulting from the appreciation of the New Israeli Shekel (the “NIS”) against the U.S. dollar. During the second quarter of 2025, the NIS appreciated by 9.3% relative to the U.S. dollar. This appreciation reduced the U.S. dollar value of the Company’s monetary assets, principally cash and cash equivalents and trade receivables denominated in U.S. dollars, which are recorded in NIS (Formula Systems’ and certain of its Israeli subsidiaries functional currency) and subsequently translated into U.S. dollars (Formula Systems’ reporting currency). As a result, the appreciation of the NIS adversely impacted the reported U.S. dollar value of these assets and contributed to the increase in financial expenses. Financial Highlights for the Six-Month Period Ended June 30, 2025 Revenues for the six-month period ended June 30, 2025 increased by 9.7% to a first-half all-time high of approximately $1.5 billion, compared to approximately $1.37 billion in the same period last year. This increase was attributable to the growth in revenue of its various subsidiary companies and affiliates during the six-month period, relative to the first half of 2024. Operating income for the six-month period ended June 30, 2025 increased by 8.5% to approximately $138.4 million, compared to approximately $127.6 million in the same period last year. Net income attributable to Formula Systems’ shareholders for the six-month period ended June 30, 2025 decreased by 4.5% to approximately $34.4 million, or $2.20 per fully diluted share, compared to approximately $36.0 million, or $2.31 per fully diluted share, in the same period last year. This change was attributable to the same trend involving higher financial expenses affecting net income attributable to Formula Systems’ shareholders for the quarter ended June 30, 2025, as described above. As of June 30, 2025, Formula Systems held 48.13%, 43.50%, 46.71%, 100%, 42.34%, 90.1%, 80%, 100%, 100% and 51% of the outstanding ordinary shares of Matrix IT Ltd., Sapiens International Corporation N.V., Magic Software Enterprises Ltd., Michpal Technologies Ltd., TSG IT Advanced Systems Ltd., Insync Staffing Solutions, Inc., Ofek Aerial Photography Ltd., ZAP Group Ltd., Shamrad Electronics (1997) Ltd., and Hashahar Telecom and Electricity Ltd., respectively. Consolidated cash and cash equivalents and short-term bank deposits totaled approximately $406.2 million as of June 30, 2025, compared to approximately $563.2 million as of December 31, 2024. Total equity as of June 30, 2025, was approximately $1.46 billion (representing 45.8% of the total consolidated statements of financial position), compared to approximately $1.39 billion (representing 46.1% of the total consolidated statements of financial position) as of December 31, 2024. Declaration of Dividend for the Second Quarter of 2025 Based on the Company’s results, the Company’s board of directors approved the distribution of a cash dividend in an amount of NIS 1.69 per share (approximately $0.50 per share) and in an aggregate amount of approximately NIS 25.9 million (approximately $7.7 million). The dividend is payable on October 28, 2025, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on October 14, 2025. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market. In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30% (if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital) or 25% (for all other dividend recipients) of the dividend amount payable to each shareholder of record, subject to applicable exemptions. Debentures Covenants As of June 30, 2025, Formula Systems was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Target equity attributable to Formula Systems’ shareholders (excluding non-controlling interests): required to be above $325 million. Actual equity attributable to Formula Systems’ shareholders as of June 30, 2025 was $722.9 million. Covenant 2 Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula Systems’ Series C and D Secured Debentures): required to be below 65%. Actual ratio of net financial indebtedness to net capitalization, as of June 30, 2025, was 6.13%. Covenant 3 Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): required to be below 5. Actual ratio of net financial indebtedness to EBITDA as of June 30, 2025 was 0.23. Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “The Formula Systems group continues to demonstrate strong and consistent performance, achieving record first-half results across key financial and operational metrics, including revenues, gross profit, operating income and EBITDA. These achievements reflect our ongoing focus on driving sustainable growth and operational excellence across all of our business segments. We are proud to be continually recognized as leaders in our fields of expertise, while implementing and advancing fast-growing technologies such as cloud, cyber, digital, data, DevOps, InsureTech and AI. These technologies allow us to generate meaningful value for our customers by helping them manage, streamline, accelerate and expand their businesses. Guided by our core values of innovation, professionalism, agility and transparency, we remain committed to consistently creating value for our customers and contributing to their long-term growth.” “Matrix reported its best second quarter in history with record-breaking results recorded across all its key financial indices: revenues, gross profit, operating income, net income and EBITDA. Matrix revenues for the second quarter grew by 8.9% year over year, when measured based on New Israeli Shekel, reaching an all-time second quarter high of NIS 1.45 billion (approximately $405.3 million). Operating income for the second quarter increased by 13.9%, year over year, when measured based on New Israeli Shekel, reaching an all-time second quarter high of NIS 126.7 million (approximately $35.4 million). We are pleased with Matrix’s continued recognition as a market leader in Israel in the implementation of the fastest-growing technologies, such as cloud, cyber, digital, data, DevOps and AI, which enable the company to create significant value for its customers in managing, streamlining, accelerating and making its businesses thrive. Our activities with the defense sector and defense industries continue to be extensive and demonstrate consistent growth. Matrix's leading position, particularly in high-demand technologies and solutions, its broad range of technological services and solutions, its wide sectoral diversification, and its extensive U.S. operations all enable Matrix to maintain its vitality, value, and leadership in the industry for its clients, partners, and investors. These strengths allow Matrix to continue demonstrating growth even during challenging political and security periods, including the mobilization of hundreds of Matrix employees to reserve duty.” “Magic Software reported another strong quarter of growth and resilience, with a 11.3% year-over-year increase in revenues, reaching $151.6 million, crossing $150 million of quarterly revenues for the first time. This performance reflects the continued success of Magic Software’s strategic focus on delivering value to its customers through innovative digital and cloud transformation solutions. While navigating a challenging political and security period, Magic Software’s diversified portfolio and strong client relationships have enabled it to achieve consistent growth. Looking ahead, we are confident in Magic Software’s ability to continue building on this momentum as it further invests in its business and enhances its capabilities to meet the evolving needs of its customers worldwide. Magic Software revised its full-year 2025 revenue guidance, increasing the previous estimated range of $593 million to $603 million to a revised range of $600 million to $610 million. This updated guidance reflects Magic Software’s sustained operational momentum and favorable outlook for the second half of the fiscal year, representing an anticipated annual revenue growth rate of approximately 8.6% to 10.4% as compared to the prior fiscal year. We believe in Magic Software’s ability to sustain momentum and drive long-term profitability, delivering lasting value to its shareholders.” “During the second quarter of 2025, Sapiens completed the acquisitions of AdvantageGo and Candella. These transactions are expected to further strengthen Sapiens’ position in the Property & Casualty (P&C) and Life segments, while supporting the continued execution of its 2025 strategic priorities, including the signing of new agreements and the deepening of customer relationships across its Life, P&C, and Reinsurance businesses. Sapiens’ comprehensive insurance platform enables insurers to advance their digital transformation, enhance operational efficiency, and adopt AI-driven innovations. Sapiens reaffirmed its commitment to ongoing platform innovation, increased cross-selling opportunities, accelerated cloud adoption, and the global expansion of its Life & Annuities business, all of which are intended to serve as key growth drivers in 2026.” “Alongside Sapiens’ solid business performance this quarter, I am pleased to highlight the recently announced agreement with Advent for the acquisition of a majority stake in Sapiens (“Agreement”), which represents a significant milestone in Sapiens’ journey. Under the terms of the Agreement, which has been unanimously approved by Sapiens’ Board of Directors, Sapiens shareholders will receive $43.50 per common share in cash, representing a premium of approximately 64% over Sapiens’ undisturbed closing share price of $26.52 on August 8, 2025, the last full trading day prior to this announcement, and a premium of approximately 51% to both the 30-day and 60-day volume-weighted average price as of August 8, 2025. Formula Systems is selling approximately 72% of its interest in Sapiens while rolling over the remaining 28%, which under the new structure will translate into an approximately 18% ownership stake. Retaining this meaningful minority position reflects our continued conviction in Sapiens’ long-term strategy, its talented team, and the exciting opportunities ahead in partnership with Advent to accelerate the transition to AI and SaaS, delivering the next generation of insurance solutions for our customers. This partnership builds on Formula’s longstanding commitment to innovation while bringing in Advent’s global expertise and resources. Customers can be assured that the trusted relationships, service quality, and industry leadership they have relied upon will remain, strengthened by a shared vision for driving the future of insurance technology. The transaction is expected to close in Q4 2025 or Q1 2026, subject to the satisfaction of customary closing conditions, including approval by Sapiens’ shareholders and receipt of regulatory approvals. Subject to conditions precedent, Formula estimates an expected capital gain of approximately $775 million before costs in its consolidated financial statements upon closing.” “Michpal Technologies’ is currently in advanced stages of preparation for an initial public offering (the “IPO”), subject to prevailing market conditions, regulatory approvals and other customary closing conditions. No assurance can be given as to the timing, pricing or ultimate terms of the IPO, nor that the IPO will be completed in accordance with the anticipated timeline or at all. Michpal Technologies, together with its subsidiaries (collectively, the “Michpal Group”), engages in the fields of payroll, recruitment, time and attendance, pension administration, and human resources, as well as in the provision of software solutions for business and financial processes. As part of its activities, the Michpal Group develops and offers a broad suite of services, software products and proprietary technological solutions covering the full spectrum of human capital management within organizations. These offerings integrate cloud-based, artificial intelligence and automation technologies, alongside advanced solutions for the management of complex (partly digital) business processes across multiple use cases. Michpal Technologies revenues for the first half of 2025 reached a record-breaking NIS 97.2 million (approximately $27 million), reflecting 29.1% year-over-year growth. Michpal Technologies is one of the most established companies in the Israeli market in the areas of payroll and pension solutions, with a proven track record, significant experience, and, in our assessment, a leading position in Israel in payroll and human resources solutions. Its subsidiaries, which generally exemplify technological integration, also possess longstanding reputations in a variety of technological activities and solutions. This enables the Michpal Group to provide a comprehensive and innovative portfolio of solutions, creating synergies between payroll and Human Resources systems on the one hand, and financial and operational systems on the other.” “TSG concluded the first half of 2025 with record-breaking results, demonstrating significant growth in revenue and profits. Revenues for the first half increased by approximately 35% year over year to a first-half record-breaking NIS 205.6 million (approximately $57.2 million). Operating income for the first half of 2025 increased by 49.8% year-over-year to NIS 18.5 million (approximately $5.1 million), compared to NIS 12.4 million (approximately $3.4 million) in the same period last year. TSG continues to advance the expansion and enhancement of its operations while strengthening its marketing and sales capabilities both domestically and internationally. TSG has also expanded product development across its two main sectors and is actively pursuing mergers and acquisitions initiatives to enhance its capabilities and further capitalize on its business potential.” “Over the recent period, Zap Group, Israel's leading consumer websites company, has demonstrated agility in adapting to evolving market dynamics. The launch of its groundbreaking E-Commerce Marketplace platform marked a pivotal transformation in its business model. By integrating cutting-edge technology and service-driven solutions, Zap Group has enhanced its relationships with small and medium-sized businesses, driving higher sales volumes, while deepening connections with end consumers through a 360-degree, holistic experience. The Marketplace platform is delivering strong and consistent results, with tens of thousands of transactions and revenues in the tens of millions of NIS. It currently hosts over 400 active stores offering more than 100,000 products, highlighting its established market presence and role as a key growth engine for Zap Group. The platform enables businesses to engage directly with consumers, fostering personalized relationships, leveraging data-driven insights, and effectively managing customer journeys. This innovation positions Zap Group at the forefront of Israel’s digital economy. In response to broader economic challenges, including the political and security situations in Israel, Zap Group has adopted a prudent approach to investments and operations. While prioritizing operational efficiency and cost optimization, Zap Group remains committed to growth. As it continues to expand its digital platforms, enhance customer engagement, and optimize data management, Zap Group is well-positioned to deliver seamless and value-driven e-commerce experiences.” Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula Systems’ stand-alone financial position in reference to its assets and liabilities as the parent company of its group of companies. These financial measures are prepared consistently with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula Systems’ share in the investees’ accumulated undistributed earnings and other comprehensive income or loss. Formula Systems believes that these financial measures provide useful information to management and investors regarding Formula Systems’ stand-alone financial position. Formula Systems’ management uses these measures to compare the Company’s performance in the current period to that of prior periods for trend analysis. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula Systems’ financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with GAAP. Formula Systems urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position. Important Note re: Potential Initial Public Offering of Michpal Technologies This press release is not an offer for sale of securities of Michpal Technologies. Securities of Michpal Technologies may not be offered or sold in the United States absent registration under the Securities Act of 1933, as amended, or an exemption from the registration requirements thereunder. Any potential initial public offering of securities of Michpal Technologies will only occur pursuant to an effective registration statement filed under the U.S. Securities Act of 1933, as amended, and a prospectus forming a part thereof. About Formula Systems Formula Systems, whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit www.formulasystems.com. Press Contact: Formula Systems (1985) Ltd. +972-3-5389487 [email protected] Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on Formula Systems’ (“we,” “us” or “our”) beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including persistent inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and the telecom, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries’ principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on May 14, 2025, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations.

Revenues for the first quarter increased by 8.1% year over year, reaching a first quarter all-time high of $754.7 million. Net Income for the first quarter increased by 12.6% year over year, reaching a first quarter all-time high of $19.3 Million. OR YEHUDA, Israel, May 22, 2025 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula” or the “Company”), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its first quarter ended March 31, 2025 results of operations. Financial Highlights for the First Quarter Ended March 31, 2025 Revenues for the first quarter ended March 31, 2025 increased by 8.1% year over year, reaching a first quarter all-time high of $754.7 million, compared to $698.4 million in the same period last year. Operating income for the first quarter ended March 31, 2025 increased by 12.7% year over year, reaching a first quarter all-time high of $70.5 million, compared to $62.6 million in the same period last year. Net income attributable to Formula’s shareholders for the first quarter ended March 31, 2025 increased by 12.6% year over year, reaching a first quarter all-time high of $19.3 million, or $1.23 per fully diluted share, compared to $17.2 million, or $1.10 per fully diluted share, in the same period last year. As of March 31, 2025, Formula held 48.14%, 43.50%, 46.71%, 100%, 42.34%, 90.1%, 80%, 100%, 100% and 51% of the outstanding ordinary shares of Matrix IT Ltd., Sapiens International Corporation N.V., Magic Software Enterprises Ltd., Michpal Technologies Ltd., TSG IT Advanced Systems Ltd., Insync Staffing Solutions, Inc., Ofek Aerial Photography Ltd., ZAP Group Ltd., Shamrad Electronic (1997) Ltd., and Hashahar Telecom And Electricity Ltd., respectively. Consolidated cash and cash equivalents and short-term bank deposits totaled approximately $526.8 million as of March 31, 2025, compared to $$563.2 million as of December 31, 2024. Total equity as of March 31, 2025, was $1.38 billion (representing 45.2% of the total consolidated statements of financial position), compared to $1.39 billion (representing 46.1% of the total consolidated statements of financial position) as of December 31, 2024. Declaration of Dividend for the First Quarter of 2025 Based on the Company’s results, the Company’s board of directors approved the distribution of a cash dividend in an amount of NIS 1.57 per share (approximately $0.44 per share) and in an aggregate amount of approximately NIS 24.1 million (approximately $6.8 million). The dividend is payable on July 22, 2025, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on July 7, 2025. The dividend will be paid in New Israeli Shekels with respect to the Company's ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market. In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30% (if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital) or 25% (for all other dividend recipients) of the dividend amount payable to each shareholder of record, subject to applicable exemptions. Debentures Covenants As of March 31, 2025, Formula was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Target equity attributable to Formula’s shareholders (excluding non-controlling interests): above $325 million. Actual equity attributable to Formula’s shareholders as of March 31, 2025 was $681.0 million. Covenant 2 Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula’s Series C and D Secured Debentures): below 65%. Actual ratio of net financial indebtedness to net capitalization, as of March 31, 2025 was (4.72%). Covenant 3 Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): below 5. Actual ratio of net financial indebtedness to EBITDA as of March 31, 2025 was (0.16). Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “Formula Systems group continues to demonstrate strong and consistent performance, making big strides across multiple fronts, as reflected by our first quarter record-breaking results recorded across all key operational financial indices: revenues, gross profit, operating income, net income and EBITDA. These results underscore our commitment to driving sustained growth and operational excellence across all segments of our business. We are pleased with the continued recognition as leaders in our areas of expertise, implementing fast-growing technologies, such as cloud, cyber, digital, data, DevOps, Insure-Tech and AI, which enable us to create significant value for our customers in managing, streamlining, accelerating and making their businesses thrive. We continue to uphold our core values of innovation, professionalism, agility, and transparency across our entire group. These principles enable us to consistently create significant value for our customers, ultimately contributing to their growth”. Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula’s stand-alone financial position in reference to its assets and liabilities as the parent company of the group. These financial measures are prepared consistent with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula’s share in the investees’ accumulated undistributed earnings and other comprehensive income or loss. Formula believes that these financial measures provide useful information to management and investors regarding Formula’s stand-alone financial position. Formula’s management uses these measures to compare the Company’s performance in the current period to that of prior periods for trend analyses. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula’s financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with GAAP. Formula urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position. About Formula Formula Systems, whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit www.formulasystems.com. Press Contact: Formula Systems (1985) Ltd. +972-3-5389487 [email protected] Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and the telecom, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries’ principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on May 14, 2025, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations.

2024 Full-year revenues increased by 5.2% year over year, reaching a record-breaking $2.76 billion, while net income grew by 24.5% to a record-breaking $79.7 million OR YEHUDA, Israel, March 20, 2025 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula” or the “Company”), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its fourth quarter and full year 2024 results of operations. Financial Highlights for the Fourth Quarter Ended December 31, 2024 Financial Highlights for the Full Year Ended December 31, 2024 Declaration of Dividend for the Second Half of 2024 In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30% (if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital) or 25% (for all other dividend recipients) of the dividend amount payable to each shareholder of record, subject to applicable exemptions. Debentures Covenants As of December 31, 2024, Formula was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements: Covenant 1 Covenant 2 Covenant 3 Comments of Management Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “Formula group continues to demonstrate strong and consistent performance, making big strides across multiple fronts, as reflected by our 2024 fourth quarter and full year revenues and operational profits. These results underscore our commitment to driving sustained growth and operational excellence across all segments of our business. We continue to uphold our core values of innovation, professionalism, agility, and transparency across our entire group. These principles enable us to consistently create significant value for our customers by helping them manage, streamline, and accelerate their operations, ultimately contributing to their growth.” “Last week, Matrix and Magic Software announced the execution of a Non-Binding Memorandum of Understanding for a landmark transaction in which Matrix intends to acquire Magic Software through a merger transaction. Subject to the consummation of this transaction, to the extent completed, Matrix will acquire all outstanding shares of Magic Software through a reverse triangular merger. Upon completion, Magic Software will become a privately held, wholly owned subsidiary of Matrix, and its shares will be delisted from Nasdaq and TASE.” “Under the terms of the proposed transaction, Magic Software shareholders will receive shares in the merged entity at an exchange ratio of 68.875% / 31.125% between Matrix and Magic Software shareholders, respectively, on a fully diluted basis. The combined entity is expected to attain a total market capitalization of approximately NIS 7.7 billion (approximately $2.1 billion), positioning it among the ten largest publicly traded IT services companies in the United States and the fourth largest among those listed in Europe. This strategic merger is designed to unlock substantial value for shareholders of both companies by creating a more robust, dynamic, and globally competitive organization.” “To the extent completed, this transaction will mark a defining moment in the history of both Matrix and Magic Software, representing a transformative step forward. By uniting two highly complementary organizations, this merger will create a stronger, more diversified company with expanded capabilities to serve clients worldwide, accelerate technological innovation, and drive long-term value creation. The synergies arising from this combination—across business, technology, and operations—will generate a powerful multiplier effect, enhancing efficiency, broadening market reach, and fostering sustained growth.” “I have every confidence that the combined entity will be exceptionally well-positioned to capitalize on new opportunities in an evolving digital landscape. This merger is not merely a consolidation, it is a strategic leap forward, enabling us to build a more agile, innovative, and resilient company that delivers exceptional value to all stakeholders, including shareholders, customers, employees, and the broader global market.” “Matrix reported its best fourth quarter in history with record-breaking results recorded across all its key financial indices: revenues, gross profit, operating income, net income and EBITDA. Matrix revenues for the fourth quarter grew by 4.1% year over year reaching an all-time fourth quarter high of NIS 1.37 billion (approximately $371.8 million). Matrix revenues for the year grew by 6.6% year over year reaching an all-time high of NIS 5.6 billion (approximately $1.51 billion). Operating income for the fourth quarter grew by 18.8%, reaching NIS 120.0 million (approximately $32.5 million). Operating income for the full year grew by 14.4%, reaching NIS 450.0 million (approximately $121.7 million). We are pleased with Matrix’s continued recognition as a market leader in Israel in the implementation of fastest-growing technologies, such as cloud, cyber, digital, data, DevOps and AI, which enable the company to create significant value for its customers in managing, streamlining, accelerating and making its businesses thrive. Matrix operates across all fronts in the technology sector, offering a rich variety of technological solutions, particularly in high-demand areas such as cloud, cybersecurity, digital, data, and AI. Our activities with the defense sector and defense industries continue to be extensive and demonstrate consistent growth. Matrix's leading position, particularly in high-demand technologies and solutions, its broad range of technological services and solutions, its wide sectoral diversification, and its extensive U.S. operations all enable Matrix to maintain its vitality, value, and leadership in the industry for its clients, partners, and investors. These strengths allow Matrix to continue demonstrating growth even during challenging economic, political, and security periods.” “Magic Software reported another strong quarter of growth and resilience, with a 13.6% year-over-year increase in revenues, reaching $142.6 million. This performance reflects the continued success of Magic Software’s strategic focus on delivering value to its customers through innovative digital and cloud transformation solutions. While navigating in a dynamic macroeconomic environment, Magic Software’s diversified portfolio and strong client relationships have enabled it to achieve consistent growth and improve operational efficiency. Looking ahead, we are confident in Magic Software’s ability to continue building on this momentum as it further invest in its business and enhance its capabilities to meet the evolving needs of its customers worldwide. Magic Software introduced its 2025 annual revenues guidance in a range of $593 million to $603 million (based on current currency exchange rates) reflecting an annual growth of 7.3% to 9.1% compared to prior year. We are confident in Magic Software’s ability to sustain momentum and drive long-term profitability, delivering lasting value to its shareholders.” “Sapiens’ revenues for the full year 2024 reached record-breaking $542.4 million, reflecting a 5.4% increase compared to the same period last year. Sapiens Non-GAAP operating income totaled $98.7 million, representing 18.2% of its total revenues. North America led Sapiens global performance with a 6.3% year-over-year revenue increase . By leveraging Sapiens Microsoft cloud strategy and scalable SaaS platform, Sapiens accelerates its clients’ migration to the cloud. Sapiens continued investment in a future-proof, modular, open insurance platform-integrating core capabilities with advanced data analytics and AI-is set to drive further growth. Sapiens is well positioned to deepen relationships with existing customers, capture additional market share, and strengthen growth across all regions.” “Michpal Technologies’ revenues for the full year 2024 reached a record-breaking NIS 159 million (approximately $43 million), growing 12.0% year over year. Michpal Technologies offers comprehensive proprietary on-premise and web-based payroll software solutions and related services, as well as integrated specialized management systems in the field of financial accounting, taxation, and compliance for accounting professionals (accountants and tax consultants), bookkeepers, controllers, and CFOs. Michpal Technologies continues its strategy of mergers and acquisitions in core and complementary areas, strengthening its market position, expanding its technological capabilities, and enhancing its service offerings—ultimately generating significant value for all stakeholders, customers, and shareholders alike by creating a stronger and more diversified company with enhanced capabilities to serve customers, drive innovation, and generate long-term shareholder value.” “TSG concluded the fourth quarter and full year of 2024 with record-breaking results, demonstrating significant growth in revenue and profits. Revenues for the fourth quarter increased by approximately 19.2% year over year to a record-breaking NIS 85.6 million (approximately $23.2 million). Revenues for the full year 2024 increased by approximately 9.0% year over year to a record-breaking NIS 322.1 million (approximately $87.1 million). EBITDA for the fourth quarter of 2024 increased by 19.4% year-over-year to NIS 13.5 million (approximately $3.7 million), compared to NIS 11.3 million (approximately $3.0 million) in the same period last year. EBITDA for the full year 2024 increased by 20.4% year-over-year to record-breaking NIS 47.5 million (approximately $12.8 million), compared to NIS 39.5 million (approximately $10.7 million) in the same period last year. TSG continues to advance the expansion and enhancement of its operations while strengthening its marketing and sales capabilities both domestically and internationally. TSG has also expanded product development across its two main sectors and successfully secured numerous tenders with Israeli municipalities during 2024. Following the successful completion of its IPO on the Tel Aviv Stock Exchange, TSG is actively pursuing mergers and acquisitions initiatives to enhance its capabilities and further capitalize on its business potential.” “Over the past year, Zap Group, Israel's leading consumer websites company, has demonstrated agility in adapting to evolving market dynamics. The launch of its groundbreaking E-Commerce Marketplace platform marks a pivotal transformation in its business model. By integrating cutting-edge technology and service-driven solutions, Zap Group has enhanced its relationships with small and medium-sized businesses, driving higher sales volumes, while deepening connections with end consumers through a 360-degree, holistic experience. In its first year of operation, the Marketplace platform has delivered remarkable results, with tens of thousands of transactions generating tens of millions of NIS. Currently, over 400 stores feature more than 100,000 products, reflecting strong adoption and success. The platform enables businesses to engage directly with consumers, fostering personalized relationships, leveraging data-driven insights, and effectively managing customer journeys. This innovation positions Zap Group at the forefront of Israel’s digital economy. In response to broader economic challenges, including the geopolitical situation in Israel since October 2023, Zap Group has adopted a prudent approach to investments and operations. While prioritizing operational efficiency and cost optimization, Zap Group remains committed to growth. As it continues to expand its digital platforms, enhance customer engagement, and optimize data management, Zap Group is well-positioned to deliver seamless and value-driven e-commerce experiences.” Stand-Alone Financial Measures This press release presents, further below, certain stand-alone financial measures to reflect Formula’s stand-alone financial position in reference to its assets and liabilities as the parent company of the group. These financial measures are prepared consistent with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula’s share in the investees’ accumulated undistributed earnings and other comprehensive income or loss. Formula believes that these financial measures provide useful information to management and investors regarding Formula’s stand-alone financial position. Formula’s management uses these measures to compare the Company’s performance in the current period to that of prior periods for trend analyses. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula’s financial position. Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with GAAP. Formula urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position. About Formula Formula Systems, whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products. For more information, visit www.formulasystems.com. Press Contact: Formula Systems (1985) Ltd. +972-3-5389487 [email protected] Forward Looking Statements Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends and their duration, including inflation, relatively high interest rates, and supply chain delays, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the degree of our success in developing and deploying new technologies for software solutions that address the updated needs of our customers and serve as the basis for our revenues; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems particularly in the current hybrid office/work-from-home environment; risks related to industries, such as the insurance, healthcare, defense and the telecom, in which certain of our clients operate; risks posed by our global sales and operations, such as changes in regulatory requirements, supply chain disruptions, geopolitical instability, wide-spread viruses and epidemics or fluctuations in currency exchange rates; and risks related to our and our subsidiaries’ principal location in Israel. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission on May 15, 2024, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations.