Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information Line Items | |
Entity Registrant Name | FORMULA SYSTEMS (1985) LTD. |
Trading Symbol | FORTY |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 15,332,667 |
Amendment Flag | false |
Entity Central Index Key | 0001045986 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Large Accelerated Filer |
Entity Well-known Seasoned Issuer | Yes |
Document Period End Date | Dec. 31, 2023 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
ICFR Auditor Attestation Flag | true |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 000-29442 |
Entity Incorporation, State or Country Code | L3 |
Entity Address, Address Line One | Yahadut Canada 1 Street |
Entity Address, City or Town | Or Yehuda |
Entity Address, Postal Zip Code | 6037501 |
Entity Address, Country | IL |
Title of 12(b) Security | American Depositary Shares, each representing one Ordinary Share, NIS 1 par value |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
Document Financial Statement Error Correction [Flag] | false |
Document Accounting Standard | International Financial Reporting Standards |
Auditor Firm ID | 1281 |
Auditor Name | KOST FORER GABBAY & KASIERER |
Auditor Location | Tel-Aviv, Israel |
Business contact | |
Document Information Line Items | |
Entity Address, Address Line One | Yahadut Canada 1 Street |
Entity Address, City or Town | Or Yehuda |
Entity Address, Postal Zip Code | 6037501 |
Entity Address, Country | IL |
Contact Personnel Name | Asaf Berenstin |
City Area Code | 972 |
Local Phone Number | 3 5389389 |
Contact Personnel Fax Number | 972 3 5389300 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 451,946 | $ 544,342 |
Short-term deposits | 76,224 | 23,976 |
Short-term investments | 738 | |
Trade receivables (net of allowances for credit losses of $14,251 and $12,242 as of December 31, 2023 and 2022, respectively) | 721,008 | 702,727 |
Prepaid expenses and other accounts receivable | 84,670 | 64,535 |
Inventories | 42,008 | 35,181 |
Total current assets | 1,375,856 | 1,371,499 |
NON-CURRENT ASSETS: | ||
Long-term investments and receivables | 52,002 | 38,985 |
Investments in companies accounted for at equity | 20,796 | 20,746 |
Property, plant and equipment, net | 52,931 | 54,971 |
Right-of-use assets | 120,651 | 116,840 |
Deferred taxes | 46,856 | 42,027 |
Intangible assets, net | 206,928 | 222,726 |
Goodwill | 936,581 | 926,161 |
Total non-current assets | 1,436,745 | 1,422,456 |
Total assets | 2,812,601 | 2,793,955 |
CURRENT LIABILITIES: | ||
Credit from banks and others | 145,973 | 157,882 |
Debentures | 72,885 | 68,293 |
Current maturities of lease liabilities | 44,064 | 45,497 |
Trade payables | 258,649 | 222,482 |
Deferred revenues | 137,643 | 131,639 |
Employees and payroll accrual | 209,384 | 201,225 |
Other accounts payable | 73,124 | 86,340 |
Liabilities in respect of business combinations | 7,954 | 27,129 |
Put options of non-controlling interests | 35,987 | 60,500 |
Total current liabilities | 985,663 | 1,000,987 |
LONG-TERM LIABILITIES: | ||
Loans from banks and others | 90,887 | 115,874 |
Debentures | 231,541 | 305,632 |
Lease liabilities | 84,639 | 78,966 |
Other long-term liabilities | 12,678 | 14,101 |
Deferred taxes | 59,206 | 59,465 |
Deferred revenues | 4,873 | 8,859 |
Liability in respect of business combinations | 2,622 | 12,345 |
Put options of non-controlling interests | 21,880 | 11,688 |
Employee benefit liabilities | 10,427 | 9,116 |
Total long-term liabilities | 518,753 | 616,046 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Ordinary shares of NIS 1 par value -Authorized: 25,000,000 shares as of December 31, 2023 and 2022; Issued: 15,901,287 and 15,886,287 at December 31, 2023 and 2022, respectively; Outstanding: 15,332,667 and 15,317,667 at December 31, 2023 and 2022, respectively | 4,351 | 4,347 |
Additional paid-in capital | 157,482 | 145,369 |
Retained earnings | 475,219 | 419,448 |
Accumulated other comprehensive income | (11,031) | (17,030) |
Treasury shares (568,620 shares as of December 31, 2023 and 2022) | (259) | (259) |
Total equity attributable to Formula Systems shareholders | 625,762 | 551,875 |
Non-controlling interests | 682,423 | 625,047 |
Total equity | 1,308,185 | 1,176,922 |
Total liabilities and equity | $ 2,812,601 | $ 2,793,955 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parentheticals) $ in Thousands | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares |
Supplementary Financial Statement Information [Abstract] | ||
Allowances for doubtful accounts (in Dollars) | $ | $ 14,251 | $ 12,242 |
Ordinary shares, authorized | 25,000,000 | 25,000,000 |
Ordinary shares, issued | 15,901,287 | 15,886,287 |
Ordinary shares, outstanding | 15,332,667 | 15,317,667 |
Treasury shares | 568,620 | 568,620 |
Consolidated Statements of Prof
Consolidated Statements of Profit or Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | |||
Proprietary software products and related services | $ 693,426 | $ 659,470 | $ 632,986 |
Software services and other | 1,927,477 | 1,912,887 | 1,771,390 |
Total revenues | 2,620,903 | 2,572,357 | 2,404,376 |
Cost of revenues: | |||
Proprietary software products and related services | 365,563 | 344,374 | 350,788 |
Software services and other | 1,611,629 | 1,605,518 | 1,489,729 |
Total cost of revenues | 1,977,192 | 1,949,892 | 1,840,517 |
Gross profit | 643,711 | 622,465 | 563,859 |
Research and development expenses, net | 77,968 | 72,129 | 65,858 |
Selling, marketing, general and administrative expenses | 326,375 | 317,956 | 289,985 |
Capital gain from realization of a Matrix IT’s subsidiary | 44,260 | ||
Operating income | 239,368 | 276,640 | 208,016 |
Financial expenses | 42,134 | 27,216 | 29,994 |
Financial income | 13,800 | 7,286 | 5,989 |
Pre-tax income before share of profits of companies accounted for at equity, net | 211,034 | 256,710 | 184,011 |
Share of profits (loss) of companies accounted for at equity, net | 773 | (1,808) | 505 |
Taxes on income | 46,075 | 55,235 | 42,614 |
Net income | 165,732 | 199,667 | 141,902 |
Attributable to: | |||
Equity holders of the Company | 64,014 | 81,393 | 54,585 |
Non-controlling interests | 101,718 | 118,274 | 87,317 |
Net income | $ 165,732 | $ 199,667 | $ 141,902 |
Net earnings per share attributable to equity holders of the Company | |||
Basic earnings per share (in Dollars per share) | $ 4.19 | $ 5.31 | $ 3.57 |
Diluted earnings per share (in Dollars per share) | $ 4.12 | $ 5.21 | $ 3.5 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements Of Comprehensive Income Abstract | |||
Net income | $ 165,732 | $ 199,667 | $ 141,902 |
Amounts that will not be reclassified subsequently to profit or loss: | |||
Actuarial gain (loss) from defined benefit plans | 1,993 | 2,717 | 3,007 |
Gain (loss) from investments in equity instruments measured at fair value through other comprehensive income | 9,996 | (5,257) | |
Share of net other comprehensive income (loss) of companies accounted for at equity | (575) | (3,053) | 128 |
Adjustments arising from translating financial statements from functional currency to presentation currency | (30,526) | (140,079) | 10,343 |
Amounts that will be or that have been reclassified to profit or loss when specific conditions are met: | |||
Foreign exchange differences on translation of foreign operations | 26,209 | 67,508 | (10,580) |
Total other comprehensive income (loss), net of tax | 7,097 | (78,164) | 2,898 |
Total Comprehensive income | 172,829 | 121,503 | 144,800 |
Total comprehensive income attributable to: | |||
Equity holders of the Company | 71,375 | 40,177 | 56,048 |
Non-controlling interests | 101,454 | 81,326 | 88,752 |
Total Comprehensive income | $ 172,829 | $ 121,503 | $ 144,800 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Share Capital | Additional paid-in capital | Retained earnings | Accumulated Other comprehensive income (loss) | Treasury shares (cost) | Non- controlling interests | Total |
Balance at Dec. 31, 2020 | $ 4,340 | $ 149,249 | $ 324,358 | $ 25,513 | $ (259) | $ 605,342 | $ 1,108,543 |
Balance (in Shares) at Dec. 31, 2020 | 15,294,267 | ||||||
Net income | 54,585 | 87,317 | 141,902 | ||||
Foreign currency translation | (125) | (112) | (237) | ||||
Actuarial gain from defined benefit plans | 1,460 | 1,547 | 3,007 | ||||
Share of other comprehensive income (loss) of companies accounted for at equity | 128 | 128 | |||||
Gain (Loss) from investments in equity instruments measured at fair value through other comprehensive income (Note 7) | |||||||
Total other comprehensive income (loss) | 1,460 | 3 | 1,435 | 2,898 | |||
Total comprehensive income (loss) | 56,045 | 3 | 88,752 | 144,800 | |||
Cost of share-based payment (Note 19) | 7,434 | 7,405 | 14,839 | ||||
Dividend to Formula’s shareholders | (22,088) | (22,088) | |||||
Dividend to non-controlling interests in subsidiaries | (62,662) | (62,662) | |||||
Transactions with non-controlling interests due to holding changes, including exercise of employees’ stock options | (540) | 3,211 | 2,671 | ||||
Acquisition of non-controlling interests | 1,005 | (2,705) | (1,700) | ||||
Settlement and expiration of put options over non-controlling interests | (4,100) | (4,532) | (8,632) | ||||
Non-controlling interests arising from initially consolidated companies | 4,016 | 4,016 | |||||
Balance at Dec. 31, 2021 | $ 4,340 | 153,048 | 358,315 | 25,516 | (259) | 638,827 | 1,179,787 |
Balance (in Shares) at Dec. 31, 2021 | 15,294,267 | ||||||
Net income | 81,393 | 118,274 | 199,667 | ||||
Foreign currency translation | (34,236) | (38,335) | (72,571) | ||||
Actuarial gain from defined benefit plans | 1,330 | 1,387 | 2,717 | ||||
Share of other comprehensive income (loss) of companies accounted for at equity | (3,053) | (3,053) | |||||
Gain (Loss) from investments in equity instruments measured at fair value through other comprehensive income (Note 7) | (5,257) | (5,257) | |||||
Total other comprehensive income (loss) | 1,330 | (42,546) | (36,948) | (78,164) | |||
Total comprehensive income (loss) | 82,723 | (42,546) | 81,326 | 121,503 | |||
Issuance of restricted shares to employees | $ 7 | (7) | |||||
Issuance of restricted shares to employees (in Shares) | 23,400 | ||||||
Cost of share-based payment (Note 19) | 8,161 | 6,729 | 14,890 | ||||
Dividend to Formula’s shareholders | (21,590) | (21,590) | |||||
Dividend to non-controlling interests in subsidiaries | (96,630) | (96,630) | |||||
Transactions with non-controlling interests due to holding changes, including exercise of employees’ stock options | (766) | 744 | (22) | ||||
Acquisition of non-controlling interests | (8,673) | (8,919) | (17,592) | ||||
Settlement and expiration of put options over non-controlling interests | (6,394) | (438) | (6,832) | ||||
Non-controlling interests arising from initially consolidated companies | 4,219 | 4,219 | |||||
Deconsolidation of a Matrix IT’s subsidiary | (811) | (811) | |||||
Balance at Dec. 31, 2022 | $ 4,347 | 145,369 | 419,448 | (17,030) | (259) | 625,047 | 1,176,922 |
Balance (in Shares) at Dec. 31, 2022 | 15,317,667 | ||||||
Net income | 64,014 | 101,718 | 165,732 | ||||
Foreign currency translation | (3,422) | (895) | (4,317) | ||||
Actuarial gain from defined benefit plans | 1,362 | 631 | 1,993 | ||||
Share of other comprehensive income (loss) of companies accounted for at equity | (575) | (575) | |||||
Gain (Loss) from investments in equity instruments measured at fair value through other comprehensive income (Note 7) | 9,996 | 9,996 | |||||
Total other comprehensive income (loss) | 1,362 | 5,999 | (264) | 7,097 | |||
Total comprehensive income (loss) | 65,376 | 5,999 | 101,454 | 172,829 | |||
Issuance of restricted shares to employees | $ 4 | (4) | |||||
Issuance of restricted shares to employees (in Shares) | 15,000 | ||||||
Cost of share-based payment (Note 19) | 7,269 | 11,415 | 18,684 | ||||
Dividend to Formula’s shareholders | (9,605) | (9,605) | |||||
Dividend to non-controlling interests in subsidiaries | (62,487) | (62,487) | |||||
Transactions with non-controlling interests due to holding changes, including exercise of employees’ stock options | 5,803 | 643 | 6,446 | ||||
Acquisition of non-controlling interests | (923) | (4,404) | (5,327) | ||||
Settlement and expiration of put options over non-controlling interests | (32) | (1,029) | (1,061) | ||||
Non-controlling interests arising from initially consolidated companies | 11,784 | 11,784 | |||||
Balance at Dec. 31, 2023 | $ 4,351 | $ 157,482 | $ 475,219 | $ (11,031) | $ (259) | $ 682,423 | $ 1,308,185 |
Balance (in Shares) at Dec. 31, 2023 | 15,332,667 | 15,332,667 |
Consolidated Statements of Accu
Consolidated Statements of Accumulated Other Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Accumulated Other Comprehensive Income (Loss) [Abstract] | |||
Foreign currency translation reserve arising from translating financial statements of foreign operations | $ (99,613) | $ (84,455) | $ (18,494) |
Adjustments arising from translating financial statements from functional currency to presentation currency | 89,103 | 77,367 | 45,642 |
Reserve from financial assets measured at fair value through other comprehensive income | 5,143 | (4,853) | 404 |
Share of other comprehensive income (loss) of companies accounted for at equity | (5,664) | (5,089) | (2,036) |
Accumulated other comprehensive income (loss) | $ (11,031) | $ (17,030) | $ 25,516 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of cash flows [abstract] | |||
Net income | $ 165,732 | $ 199,667 | $ 141,902 |
Share of profits of companies accounted for at equity, net | (773) | 1,808 | (505) |
Depreciation and amortization | 121,832 | 115,308 | 122,184 |
Changes in value of debentures, net | 1,490 | 517 | (624) |
Increase (decrease) in employee benefit liabilities | 2,707 | 1,000 | (220) |
Gain from disposition of a subsidiary of Matrix IT | (44,260) | ||
Loss (gain) from sale of property, plants and equipment | 66 | (37) | (21) |
Loss from early termination of lease | 80 | ||
Share-based payment expenses | 18,622 | 14,953 | 14,767 |
Changes in value of short-term and long-term loans from banks others and deposits, net | 833 | (4,688) | 2,030 |
Changes in deferred taxes, net | (8,344) | (18,142) | (7,997) |
Cash paid in respect of acquisitions of activities | (6,572) | (4,060) | (556) |
Change in liability in respect of business combinations | (2,062) | (2,971) | 5,296 |
Impairment of right-of-use asset | 1,439 | ||
Change in fair value of financial assets measured at fair value through profit or loss | 5 | 19 | |
Amortization of premium and accrued interest on debt instruments at fair value through other comprehensive income | (114) | 76 | 96 |
Gain from revaluation of dividend preference derivative in TSG | (85) | (1,221) | (255) |
Effect of exchange rate on cash and cash equivalents held in currencies other than the functional currency | 991 | 2,412 | 614 |
Working capital adjustments: | |||
Decrease (increase) in inventories | (3,382) | (13,756) | 4,642 |
Decrease (increase) in trade receivables | 6,562 | (51,398) | (150,818) |
Decrease in other current and long-term accounts receivable | (5,833) | 2,627 | 20,506 |
Increase in trade payables | 18,718 | 25,328 | 40,076 |
Increase in other accounts payable and employees and payroll accrual | (25,117) | 22,292 | 7,255 |
Increase (decrease) in deferred revenues | 9,692 | (6,418) | 9,283 |
Net cash provided by operating activities | 294,968 | 239,136 | 209,094 |
Payments for business acquisitions, net of cash acquired (Appendix C) | (36,966) | (52,262) | (77,155) |
Proceeds from sale of a subsidiary of Matrix IT (Appendix D) | 42,928 | ||
Taxes paid in conjunction with sale of a subsidiary | (8,424) | ||
Cash paid in conjunction with deferred payments and contingent liabilities related to business combinations | (11,874) | (5,181) | (8,630) |
Loan extended to related party and others | (7,001) | (161) | |
Purchase of intangible assets | (763) | (3,142) | (872) |
Purchase of other investment | (498) | (15,073) | (500) |
Purchase of financial assets measured at fair value through other comprehensive income | (1,243) | ||
Purchase of property and equipment | (16,683) | (22,063) | (17,352) |
Proceeds from maturity and sale net of investment in debt instruments at fair value through other comprehensive income or loss, net | 699 | 309 | |
Proceeds from sale of property and equipment | 1,043 | 633 | 2,283 |
Receipt of short-term loans | 303 | ||
Dividend from companies accounted for at equity | 68 | 48 | 83 |
Change in short-term and long-term deposits | (51,467) | 2,042 | 4,641 |
Capitalization of software development and other costs | (14,552) | (14,110) | (12,832) |
Net cash used in investing activities | (139,237) | (74,295) | (110,192) |
Exercise of employees’ stock options in subsidiaries | 4,831 | 2,079 | |
Cash paid in conjunction with acquisitions of activities | (6,718) | ||
Dividend paid to non-controlling interests | (62,487) | (96,530) | (62,993) |
Dividend to Formula’s shareholders | (9,927) | (21,778) | (22,081) |
Short-term bank credit, net | (9,527) | (7,315) | 36,261 |
Repayment of long-term loans from banks and others | (82,874) | (87,894) | (84,241) |
Receipt of long-term loans from banks and others | 55,568 | 65,678 | 62,707 |
Proceeds from issuance of debentures, net | 199,051 | 50,295 | |
Repayment of long-term liabilities to IIA | (394) | (642) | (825) |
Repayment of debentures | (60,449) | (53,105) | (46,981) |
Purchase of non-controlling interests | (2,661) | (16,795) | (1,700) |
Repayment of lease liabilities | (55,064) | (49,702) | (44,086) |
Cash paid due to exercise of put option by non-controlling interests | (13,204) | (1,854) | (2,565) |
Redemption of capital note of non-controlling interests in subsidiaries | (95) | ||
Payment to non-controlling interests due to put option | (271) | ||
Net cash used by financing activities | (243,177) | (70,981) | (114,130) |
Effect of exchange rate changes on cash and cash equivalents | (4,950) | (34,910) | (1,030) |
Increase (decrease) in cash and cash equivalents | (92,396) | 58,950 | (16,258) |
Cash and cash equivalents at beginning of year | 544,342 | 485,392 | 501,650 |
Cash and cash equivalents at end of year | 451,946 | 544,342 | 485,392 |
A. Supplemental cash flow information: | |||
Interest paid | 26,140 | 17,573 | 15,344 |
Interest received | 7,290 | 2,325 | 459 |
Taxes paid, net | 76,694 | 51,259 | 38,393 |
B. Non-cash activities: | |||
Purchase of property and equipment | 86 | 930 | 1,627 |
Intangible assets and goodwill incurred but unpaid at period end | 382 | ||
Contingent acquisition consideration | (124) | ||
Dividend payable to non-controlling interests | 111 | 331 | |
Right-of-use asset recognized with corresponding lease liability | 45,360 | 52,319 | 39,116 |
Working capital (other than cash and cash equivalents) | (10,355) | (5,457) | 1,623 |
Inventories | (4,343) | (3,536) | |
Short-term investments | (752) | ||
Short-term deposits | (191) | ||
Property and equipment | (242) | (1,433) | (1,507) |
Goodwill and intangible assets | (44,728) | (87,905) | (108,048) |
Right-of-use assets | (93) | (2,754) | (2,401) |
Other long-term assets | (2,439) | (123) | (187) |
Liabilities to banks and others | 7,101 | 5,142 | 6,431 |
Long-term liabilities | 282 | 1,240 | 1,306 |
Lease liabilities | 93 | 2,754 | 2,769 |
Deferred tax liability, net | 2,799 | 5,692 | 9,662 |
Liability to formerly shareholders | 1,244 | 7,327 | 1,518 |
Deferred payments and contingent consideration | 1,931 | 23,515 | 7,663 |
Non-controlling interests at acquisition date | 11,784 | 4,219 | 4,016 |
Total | (36,966) | (52,262) | (77,155) |
Working capital (other than cash and cash equivalents) | (6,798) | ||
Short-term investments | 5,004 | ||
Property and equipment | 782 | ||
Goodwill and intangible assets | 439 | ||
Other long-term assets | 67 | ||
Long-term liabilities | (15) | ||
Non-controlling interests at the sale date | (811) | ||
Gain from realization of a subsidiary | 44,260 | ||
Total | $ 42,928 |
General
General | 12 Months Ended |
Dec. 31, 2023 | |
General [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. General: Formula Systems (1985) Ltd. (“Formula” or the “Company”) was incorporated in Israel and began its business operations in 1985. Since 1991, Formula’s ordinary shares, par value NIS 1 per share, have been traded on the Tel-Aviv Stock Exchange (“TASE”), and, in 1997, began trading through American Depositary Shares (“ADSs”) under the symbol “FORTY” on the Nasdaq Global Market in the United States until January 3, 2011, at which date the listing of Formula’s ADSs was transferred to the Nasdaq Global Select Market (“Nasdaq”). Each ADS represents one ordinary share of Formula. The Company is considered an Israeli resident. The controlling shareholder of the Company is Asseco Poland S.A. (“Asseco”), a Polish public company, whose shares are traded on the Warsaw Stock Exchange, that offers comprehensive, proprietary IT solutions for all sectors of the economy. b. Formula is a global information technology group providing software services, proprietary and non-proprietary software solutions, software product marketing and support, computer infrastructure and integration solutions and training, integration and digital advertising solutions (the “Group”). The Group manages and operates its businesses through eight directly held subsidiaries; Matrix IT Ltd. (“Matrix”), Sapiens International Corporation N.V (“Sapiens”), Magic Software Enterprises Ltd. (“Magic Software”), Zap Group Ltd. (“ZAP Group”), Insync Staffing Solutions, Inc. (“Insync”), Michpal Micro Computers (1983) Ltd. (“Michpal”), Ofek Aerial Photography Ltd. (“Ofek”) and Shamrad Electronic (1997) Ltd (“Shamrad”) and one jointly controlled entity: TSG IT Advanced Systems Ltd. (“TSG”). c. The following table presents the ownership of the Company’s eight directly held subsidiaries and one jointly controlled entity directly held as of the dates indicated (the list consists only of active companies): Percentage of ownership December 31, 2023 2022 Matrix IT 48.21 48.69 Sapiens 43.63 44.10 Magic Software 46.71 46.26 Insync 90.09 90.09 Michpal 100.00 100.00 TSG (1) 50.00 50.00 Ofek 80.00 80.00 ZAP Group 100.00 100.00 Shamrad 100.00 100.00 (1) TSG’s results of operations are reflected in the Company’s results of operations using the equity method of accounting. d. Definitions: In these financial statements: The Company or Formula - Formula Systems (1985) Ltd. The Group - Formula Systems (1985) Ltd. and its investees. Subsidiaries - Companies that are controlled by the Company (as defined in IFRS 10) and whose accounts are consolidated with those of the Company. Jointly controlled entities - Companies owned by various entities that have a contractual arrangement for joint control and are accounted for using the equity method of accounting. Associates - Companies over which the Company has significant influence and that are not subsidiaries. The Company’s investment therein is included in the financial statements using the equity method of accounting. Investees - Subsidiaries, jointly controlled entities, and associates. Interested parties and controlling shareholder - As defined in the Israeli Securities Regulations (Annual Financial Statements), 2010. Related parties - As defined in IAS 24. |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Of Summary Of Significant Accounting Policy Explanatory Abstract | |
ACCOUNTING POLICIES | NOTE 2:- ACCOUNTING POLICIES The following accounting policies have been applied consistently in the financial statements for all periods presented, unless otherwise stated. 1) Basis of presentation of the financial statements These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The Company’s financial statements have been prepared on a cost basis, except for certain assets and liabilities such as: financial assets measured at fair value through other comprehensive income; liabilities with respect to business combination; and other financial assets and liabilities (including derivatives) which are presented at fair value through profit or loss, provisions, employee benefit assets and liabilities, investments in associates and joint ventures. The Company has elected to present the profit or loss items using the function of expense method. 2) Use of estimates, judgments and assumptions: The preparation of the consolidated financial statements requires management to make estimates, judgments, and assumptions, that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, revenues and expenses in the financial statements. Such judgments, estimates and assumptions are related, but not limited to, effective control, liabilities with respect to business combination, goodwill and identifiable intangible assets and their subsequent impairment analysis, determination of fair value of put options of non-controlling interests, legal contingencies, research and development capitalization, classification of leases, income tax uncertainties, deferred taxes, share-based compensation, as well as the determination of revenue recognition from contracts accounted for based on the estimate of percentage of completion. The Company’s management believes that the estimates, judgments, and assumptions used, are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Changes in accounting estimates are reported in the period of the change in estimate. 3) Consolidated financial statements: The consolidated financial statements comprise the financial statements of companies that are controlled by the Company (subsidiaries). Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to unilaterally affect those returns through its power over the investee. Potential voting rights are considered when assessing whether an entity has control. The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases. The financial statements of the Company and of the investees, after being adjusted to comply with IFRS, are prepared for the same reporting period and using consistent accounting treatment of similar transactions and economic activities. Any discrepancies in the applied accounting policies are eliminated by making appropriate adjustments. Significant intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements. Effective control: In a situation where the Company holds less than a majority of voting power in a given entity, but that power is sufficient to enable the Company to unilaterally direct the relevant activities of such entity, then control is exercised. When assessing whether voting rights held by the Company are sufficient to give it power, the Company considers all facts and circumstances, including: the amount of those voting rights relative to the amount and dispersion of other vote holders; potential voting rights held by the Company and other shareholders or parties; rights arising from other contractual arrangements; significant personal ties; and any additional facts and circumstances that may indicate that the Company has, or does not have, the ability to direct the relevant activities when decisions need to be made, inclusive of voting patterns observed at previous meetings of shareholders. The Company’s management has concluded that despite the lack of absolute majority of voting power at the general meetings of shareholders of Matrix IT, Sapiens and Magic Software, in accordance with IFRS 10, these investees are controlled by the Company. The conclusion regarding the existence of control during the years ended December 31, 2023, 2022 and 2021 with respect to Matrix, Sapiens and Magic Software, in accordance with IFRS 10, was made in accordance with the following factors: Matrix IT As of December 31, 2023, the Company held 48.21% of the outstanding ordinary shares of Matrix. The conclusion regarding the existence of control in Matrix, in line with IFRS 10, was made considering the following additional factors: i) Governing bodies of Matrix: Decisions of Matrix’s shareholders general meeting are taken by a simple majority of votes represented at the general meeting; the annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Matrix’s independent auditors for the next year, as well as approve Matrix’s financial statements and management’s report on operations; in accordance with Matrix’s articles of association, the board of directors of Matrix is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Matrix’s shareholders by its articles of association, including the decision to pay out dividends; Matrix’s board of directors is composed of 5 members, 2 of whom are external directors as required by the Israeli Companies Law, 5759-1999, another one of whom is an independent director, while the remaining two directors are associated with Formula, including Formula’s chief executive officer who serves as the chairman of Matrix’s board of directors. ii) Shareholders structure of Matrix IT: Matrix’s shareholders’ structure may be considered dispersed because, apart from the Company, only two shareholders (both Israeli institutional investors) held more than 5% of Matrix’s voting power during the reporting period (one holding approximately 10.3% and the second one holding approximately 5%); there is no evidence that any of the shareholders has or had granted to any other shareholder a voting proxy at the general meeting; over the last three years (i.e., 2021-2023), Matrix’s general meetings were attended by shareholders representing in aggregate between 79% -83% of total voting rights. This means that the level of activity of the company’s shareholders is relatively moderate. Bearing in mind that the company presently holds approx. 48.21% of total voting rights, the attendance from shareholders would have to be higher than 96.42% in order to deprive Formula of an absolute majority of votes at the general meeting. The Company believes that achieving such high attendance seems unlikely. In addition, Israeli law provides that institutional investors should not hold the ability to direct the company’s business and as such should not exceed 20% each. An institutional investor cannot also hold more than 20% seats in board of directors. Looking at entire Israeli market the practice is that institutional investors are not taking positions on boards of directors – as having such position would impact institutional investors’ ability to have certain transactions on the market (e.g. insider trading threat). If institutional investors cooperate between themselves, they may be considered violating this rule – moreover if they vote in the same way however, contrary to the major shareholder they might be accused of cooperation and violation of the rule. Hence, there is both legal and practical limitation of these investors to coordinate approaches. With regard to the above, the Group has determined that the company, despite the lack of an absolute majority of shares in Matrix IT, is still able to influence the appointment of directors at Matrix IT, and therefore may affect the directions of development as well as current business operations of that company. Sapiens As of December 31, 2023, the Company held 43.63% of the outstanding common shares of Sapiens. The conclusion regarding the existence of control in Sapiens, in line with IFRS 10, was made considering the following factors: i) Governing bodies of Sapiens: Decisions of Sapiens’ shareholders general meeting are taken by a simple majority of votes represented at the general meeting; the annual (ordinary) general meeting adopts resolutions to appoint individual directors, choose Sapiens’ independent auditors for the next year, as well as approve the company’s financial statements and management’s report on operations; in accordance with Sapiens’ articles of association, the board of directors of Sapiens is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Sapiens’ shareholders by its articles of association, including the decision to pay out dividends. Sapiens’ board of directors is composed of 6 members, 3 of whom are independent directors, and one being Formula’s chief executive officer who serves as the chairman of Sapiens’ board of directors. ii) Shareholders structure of Sapiens: Sapiens’ shareholders structure is dispersed because no other shareholder except for the Company’s controlling shareholder, held as of December 31, 2023 more than 5% of the voting rights. There is no evidence that any shareholder has or had granted to any other shareholder a voting proxy at the general meeting; and, over the last three years (i.e., 2021-2023), Sapiens’ general meetings were attended by shareholders representing in total between 81%-84% the total voting power, including the Company’s voting power. This fact indicates that public shareholder participation is not considerably high and in order to have a majority against the company potential 43.63% voting rights there will be needed at least 87.26% of all shareholder votes that participating in each of the annual shareholders’ meeting. Therefore it is management’s opinion that despite the lack of an absolute majority of shares in Sapiens, the Company is still able to influence the appointment of directors at Sapiens and therefore may affect Sapiens’ directions of development as well as its current business operations. Magic Software As of December 31, 2023, the Company held 46.71% of the outstanding ordinary shares of Magic Software. The conclusion regarding the existence of control in Magic Software, in line with IFRS 10, was made considering the following factors: i) Governing bodies of Magic Software: Decisions of Magic Software’s shareholders general meeting are taken by a simple majority of votes represented at the general meeting; the annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Magic Software’s independent auditors for the next year, as well as to approve Magic Software’s financial statements and the management’s report on operations; in accordance with Magic Software’s articles of association, the board of directors of Magic Software is responsible for managing Magic Software’s current business operations and is authorized to take substantially all decisions which are not specifically reserved to Magic Software’s shareholders by its articles of association, including the decision to pay out dividends; and, Magic Software’s board of directors is composed of 6 members, 3 of whom are external directors, the other three internal directors are affiliated (currently and in the past) with the company. One of whom is Formula’s chief executive officer, who also serves as Magic Software’s chief executive officer. ii) Shareholders structure of Magic Software: Magic Software’s shareholders structure is dispersed because, apart from the Company, as of December 31, 2023, there were two financial Israeli institutional shareholders holding more than 5% of Magic Software’s voting rights, holding 6.97% and 10.7% as of 31 December, 2023; there is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting; and, over the last three years from (i.e., 2021-2023), Magic Software’s general meetings were attended by shareholders representing between 84.7%-86.7%. of the total voting rights. This fact indicates that public shareholder participation is not considerably high and in order to have a majority against the company potential 46.71% there will be needed at least 93.43% of all shareholder votes that participating in each of the annual shareholders’ meeting. Therefore, it is management’s opinion that despite the lack of an absolute majority of shares in Magic Software, the Company is still able to influence the appointment of directors at Magic Software and therefore may affect Magic Software’s directions of development as well as its current business operations. 4) Non-controlling interests Non-controlling interests in subsidiaries, represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as a change in equity by adjusting the carrying amount of the non-controlling interests with a corresponding adjustment of the equity attributable to equity holders of the Company less / plus the consideration paid or received. For more information regarding put options to the Non-controlling interests please see Note 2(16)(E) below. 5) Business combinations and goodwill: Business combinations are accounted for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company determines whether to measure the non-controlling interests in the acquiree based on their fair value on the acquisition date or at their proportionate share in the fair value of the acquiree’s net identifiable assets. Direct acquisition costs are carried to the statement of profit or loss as incurred. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset or liability in accordance with IFRS 9, “Financial Instruments”. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. If the contingent consideration is classified as an equity instrument, it is measured at fair value on the acquisition date without subsequent remeasurement. Goodwill is initially measured at cost which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable assets acquired and liabilities assumed. If the resulting amount is negative, the acquirer recognizes the resulting gain on the acquisition date. 6) Investment in joint arrangements: Joint arrangements are arrangements in which the Company has joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. i. Joint ventures: In joint ventures the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint venture is accounted for by using the equity method. 7) Functional currency, presentation currency and foreign currency: i. Functional currency and presentation currency: The presentation currency of these consolidated financial statements of the Group is the U.S. dollar (the “dollar”), since the Company believes that financial statements in U.S. dollars provide more relevant information to its investors and users of the financial statements. The functional currency applied by Formula, on a stand-alone basis, Since January 1, 2019 is the NIS. The functional currencies applied by Formula’s subsidiaries and associates are the currencies of the primary economic environment in which each one of them operates. Assets and liabilities of an investee which is a foreign operation, including fair value adjustments upon acquisition, are translated at the closing rate at each reporting date. Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized in other comprehensive income (loss). Intragroup loans for which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of the investment in the foreign operation and, accordingly, the exchange rate differences from these loans (net of the tax effect) are recorded in other comprehensive income (loss). Upon the full or partial disposal of a foreign operation resulting in loss of control in the foreign operation, the cumulative gain (loss) from the foreign operation which had been recognized in other comprehensive income is transferred to profit or loss. Upon the partial disposal of a foreign operation which results in the retention of control in the subsidiary, the relative portion of the amount recognized in other comprehensive income is reattributed to non-controlling interests. ii. Transactions, assets and liabilities in foreign currency: Transactions denominated in foreign currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at each reporting date into the functional currency at the exchange rate at that date. Exchange rate differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currency and measured at cost are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value was determined. 8) Short-term deposits: Short-term deposits are deposits with an original maturity of more than three months from the date of investment and which do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit. Restricted deposits include deposits used to secure certain subsidiaries’ ongoing projects, as well as security deposits with respect to leases, and are classified under other short-term and long-term receivables. As of December 31, 2023, the group have dollar deposits in the amount of approximately 76 million dollars, for a period not exceeding three months that carry a monthly interest rate of approximately 1.78%. 9) Inventories: Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises costs of purchase and costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. Inventories are mainly comprised of purchased merchandise and products which consist of educational software kits, computers, peripheral equipment and spare parts. Cost is determined on the “first in – first out” basis. The Group periodically evaluates the condition and aging of its inventories and makes provisions for slow-moving inventories accordingly. No such impairments have been recognized in any period presented. 10) Revenue recognition: Revenue from contracts with customers is recognized when the control over the goods or services is transferred to the customer. The transaction price is the amount of the consideration that is expected to be received based on the contract terms, excluding amounts collected on behalf of third parties (such as taxes). In determining the amount of revenue from contracts with customers, the Group evaluates whether it is a principal or an agent in the arrangement. The Group is a principal when the Group controls the promised goods or services before transferring them to the customer. In these circumstances, the Group recognizes revenue for the gross amount of the consideration. When the Group is an agent, it recognizes revenue for the net amount of the consideration, after deducting the amount due to the principal. Sale of software licensing, maintenance services and post implementation consulting services A software licensing transaction that does not require significant implementation services is considered a distinct performance obligation, as the customer can benefit solely from the software on its own or together with other readily available resources. The Group recognizes revenue from software licensing transactions at a point in time when the Group provides the customer a right to use the Group’s intellectual property as it exists at the point in time at which the license is granted to the customer. The Group recognizes revenue from software licensing transactions over time when the Group provides the customer a right to access the Group’s intellectual property throughout the license term. The Group may generate revenue from sale of software licensing which includes significant implementation and customization services. In such contracts the Group is normally committed to provide the customer with a functional IT system and the customer can only benefit from such functional system, being the final product that would normally be comprised of proprietary licenses and significant related services. Revenues from these contracts are based on either fixed price or time and material. Software licensing transactions which involve significant implementation, customization, or integration of the Group’s software license to customer-specific requirements, are considered as one performance obligation satisfied over-time. The underlying deliverable is owned and controlled by the customer and does not create an asset with an alternative use to the Group. In addition, the Group has an enforceable right to payment for performance completed throughout the duration of the contract. Accordingly, the Group recognizes revenue from such contracts over time, using the percentage of completion accounting method. The Group recognizes revenue and gross profit as the work is performed based on a ratio between actual costs incurred compared to the total estimated costs for the contract. Provisions for estimated losses on uncompleted contracts are made during the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. When post implementation and consulting services do not involve significant customization, the Group accounts for such services as performance obligations satisfied over time and revenues are recognized as the services are provided. Revenue from maintenance is recognized over time, during the period the customer simultaneously receives and consumes the benefits provided by the Group’s performance. When payments from customers are made before or after the service is performed, the Group recognizes the resulting contract asset or liability. Sale of hardware and infrastructure Revenue from the sale of hardware and infrastructure is recognized in profit or loss at the point in time when the control of the goods is transferred to the customer, generally upon delivery of the goods to the customer. Sale of training and implementation services Revenues from training and implementation services are recognized when the service is provided. Revenue from training services in respect of public courses whose operating range is up to 3 months is recognized at the end of the course period. Revenues from training services in respect of long-term courses will be recognized over the term of the course. Revenues from implementation projects ordered by organizations is recognized according to actual inputs (actually worked hours). Revenue of contracts according to actual inputs Revenue from framework agreements for the performance of work according to actual inputs is recognized according to the hours invested. Revenue of fixed price contracts Revenue from fixed price contracts is recognized according to the completion rate method when all the following conditions are met: the revenue is known or can be estimated reliably, the collection of income is expected, the costs involved in performing the work are known or can be estimated, there is no material uncertainty about the Group’s ability to complete the work, and the customer and the completion rate can be reliably estimated. The Group applies a cost-based input method for measuring the progress of performance obligations that are satisfied over time. In applying this cost-based input method, the Group estimates the costs to complete contract performance in order to determine the amount of the revenue to be recognized. These estimated costs include the direct costs and the indirect costs that are directly attributable to a contract based on a reasonable allocation method. In certain circumstances, the Group is unable to measure the outcome of a contract, but the Group expects to recover the costs incurred in fulfilling the contract as of the reporting date. In such circumstances, the Group recognizes revenue to the extent of the costs incurred as of the reporting date until such time the outcome of the contract can be reasonably measured. If a loss is anticipated from a contract, the loss is recognized in full regardless of the percentage of completion. When appropriate, the Group also applies a practical expedient permitted under IFRS 15 whereby if the Group has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Group’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided), the Group may recognize revenue in the amount it is entitled to invoice. Deferred revenues, which represent a contract liability, include unearned amounts received under maintenance and support (mainly) and amounts received from customers for which revenues have not yet been recognized. Allocating the transaction price For contracts that consist of more than one performance obligation, at contract inception the Group allocates the contract transaction price to each performance obligation identified in the contract on a relative stand-alone selling price basis. The stand-alone selling price is the price at which the Group would sell the promised goods or services separately to a customer. The Group determines the stand-alone selling price for the purposes of allocating the transaction price to each performance obligation by considering several external and internal factors including, but not limited to, transactions where the specific performance obligation is sold separately, historical actual pricing practices and geographies in which the Group offers its products and services. If a specific performance obligation, such as the software license, is sold for a broad range of amounts (that is, the selling price is highly variable) or if the Group has not yet established a price for that good or service, and the good or service has not previously been sold on a stand-alone basis (that is, the selling price is uncertain), the Group applies the residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective stand-alone selling prices, with any residual amount of transaction price allocated to the remaining specific performance obligation. Variable consideration The Group determines the transaction price separately for each contract with a customer. When exercising this judgment, the Group evaluates the effect of each variable amount in the contract, taking into consideration discounts, penalties, variations, claims, and non-cash consideration. In determining the effect of the variable consideration, the Group normally uses the “most likely amount” method described in the Standard. Pursuant to this method, the amount of the consideration is determined as the single most likely amount in the range of possible consideration amounts in the contract. According to the Standard, variable consideration is included in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Costs of obtaining a contract In order to obtain certain contracts with customers, the Group incurs incremental costs in obtaining the contract (such as sales commissions which are contingent on making binding sales). Costs incurred in obtaining the contract with the customer which would not have been incurred if the contract had not been obtained and which the Group expects to recover are recognized as an asset and amortized on a systematic basis that is consistent with the provision of the services under the specific contract. An impairment loss in respect of capitalized costs of obtaining a contract is recognized in profit or loss when the carrying amount of the asset exceeds the remaining amount of consideration that the Group expects to receive for the goods or services to which the asset relates, less the costs that relate directly to providing those goods or services and that have not been recognized as expenses. The Group has elected to apply the practical expedient allowed by IFRS 15 according to which incremental costs of obtaining a contract are recognized as an expense when incurred if the amortization period of the asset is one year or less. Revenues that include warranty services In certain cases, the Group also provides a warranty for goods and services sold (i.e., extended warranties when the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when the scope of which is broader than just an assurance to the customer that the product/service complies with agreed-upon specifications). The Group has ascertained that such warranties granted by the Group meet the definition of service. The conclusion regarding the extended nature of a warranty is made whenever the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when such warranty is more extensive than the minimum required by law. Under IFRS 15, the fact of granting an extended warranty indicates that the Group provides an additional service. As such, the Group recognizes an extended warranty as a separate performance obligation and allocates a portion of the transaction price to such service. In all cases where an extended warranty is accompanied by a maintenance service, which is even a broader category than the extended warranty itself, revenues are recognized over time because the customer consumes the benefits of such service as it is performed by the provider. If this is the case, the Group continues to allocate a portion of the transaction price to such maintenance service. Likewise, in cases where a warranty service is provided after the project completion and is not accompanied by any maintenance service, then a portion of the transaction price and analogically recognition of a portion of contract revenues will have to be deferred until the warranty service is actually fulfilled. Disaggregation of revenue Service revenue includes contracts primarily for the provision of supplies and services other than desig |
Business Combination, Significa
Business Combination, Significant Transaction and Sale of Business | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination, Significant Transaction and Sale of Business [Abstract] | |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS | NOTE 3:- BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS i. Sapiens Acquisition of NCDC S.A (” NCDC “): On December 4, 2023 (the Acquisition date), Sapiens completed the acquisition of 100% of the outstanding shares of NCDC, a polish entity that provides services which allows quick set up of insurance systems through automation and digitalization for P&C (Property and Casualty) insurance products. The acquisition of NCDC expands Sapiens’s ability to support its software products mainly in the Nordic region. The purchase price amounted to $11,667 in total, of which, $10,179 were paid in cash on the acquisition date, $1,063 are deferred payments ($638 will be paid after 12 months and $425 will be paid after 18 months from the acquisition date) and up to $425 will be paid by the end of March 2024 subject to net working capital adjustments. In addition, NCDC’s three key employees have retention-based payments over two years (2024-2025) of up to $523. These payments are subject to continued employment, and therefore were not included in the purchase price and will be expensed over the requested employment period. Acquisition related costs amounted to $325, and are presented under selling, marketing, general and administrative in the Company’s consolidated statements of income. The results of NCDC’s operations have been included in the consolidated financial statements from the Acquisition Date. The following table summarizes the estimated fair values allocated to NCDC assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Current assets (including cash acquired of $2,119) $ 3,786 Customer relations 4,359 Deferred tax liabilities, net (828 ) Other long-term assets 2,439 Current liabilities (918 ) Other long-term liabilities (324 ) Goodwill 3,153 Total assets acquired net of acquired cash $ 11,667 The preliminary balances presented in these financial statements are subject to certain changes upon finalization of the purchase price once the net working capital adjustments are agreed with the seller. The excess of purchase consideration over the fair value of net tangible and intangible assets acquired was recorded as goodwill. The goodwill from the acquisition of NCDC is primarily attributable to potential synergy with Sapiens, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of income. ii. Magic Software a. Acquisition of K.M.T. (M.H.) Technologies Communication Computer Ltd. (“KMT”) On June 8, 2023, Magic Software acquired 60% of K.M.T. (M.H.) Technologies Communication Computer Ltd. (“KMT”). KMT delivers a broad spectrum of ICT products, cloud platform, VoIP, technical support and planning and construction of computing. KMT was acquired for a total consideration of NIS 55,039 thousand ($14,875). Approximately NIS 60,000 thousand was paid upon closing of which a payment of Approximately 15,000 is related to a contingent consideration depending on the future operating results achieved by KMT referring to years 2023-2025. This contingent consideration was accounted for as a financial asset measured at its fair value as of the acquisition date of NIS 5 million ($1.4 million). If the future operating results will not fully achieved, the seller will be required to return the whole or part of the contingent consideration. The results of operations were included in the consolidated financial statements of the Company commencing June 30, 2023. Acquisition-related costs were immaterial. Unaudited pro forma condensed results of operations were not presented since they were not material to the Company’s consolidated statement of profit or loss. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net assets excluding $632 cash acquired $ 197 Intangible assets 9,410 Deferred tax liabilities (1,129 ) Non-controlling interests (3,644 ) Goodwill 9,410 Total assets acquired, net of acquired cash $ 14,244 The goodwill from the acquisition of KMT is primarily attributable to potential synergy with Magic, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. iii. Matrix IT a. Acquisition of Zebra Technologies Ltd. (“Zebra”) On January 1, 2023, Matrix IT completed the purchase of 70% of the Share Capital of Zebra Technologies Ltd. for NIS53,086 The following table summarizes the provisional estimated fair values (1) Net assets excluding cash acquired $ 3,163 Inventories 4,359 Property, plant and equipment 82 Intangible assets 5,973 Deferred taxes (1,284 ) Other long-term liabilities (37 ) Liabilities in respect of business combinations (7,418 ) Goodwill 5,930 Total assets acquired net of acquired cash $ 10,768 iv. Michpal a. Acquisition of Emalogic Software Ltd. (“Emalogic”) On June 22, 2023, Michpal acquired 75% of the share capital of Emalogic, for a total consideration of NIS 23,762 thousand (approximately $6,422) or NIS 14,409 thousand (approximately $3,894) net of acquired cash. Michpal and the seller hold a mutual call and put options, respectively, for the remaining 25% share interest in Emalogic. The options can be exercised within 90 days after the approval of Emalogic’s audited annual financial statements for 2026 or 2027. The fair value of the put option measured on the acquisition date amounted to NIS 6,133 thousand (approximately $1,658). Emalogic, an Israeli-based company, is a software service provider that specializes in the development of mission-critical systems, starting from the characterization phase and through the maintenance phase. Emalogic holds extensive knowledge in the field of UX and UI allowing it to provide a complete end-to-end software solution. Emalogic operates in 4 main sectors - financial, automotive, freight and cloud. Acquisition - Acquisition related costs amounted to $81, and are presented under selling, marketing, general and administrative in the Company’s consolidated statements of income. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net liabilities excluding cash acquired $ (1,695 ) Property, plant and equipment 161 Intangible assets 3,006 Deferred taxes (692 ) Other long-term liabilities (313 ) Liabilities in respect of business combinations (443 ) Non-controlling interests (749 ) Goodwill 4,619 Total assets acquired net of acquired cash $ 3,894 |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | NOTE 4:- CASH AND CASH EQUIVALENTS December 31, 2023 2022 Balance nominated in USD $ 217,948 $ 190,457 Balance nominated in NIS 157,725 282,050 Balance nominated in other currencies 76,273 71,835 $ 451,946 $ 544,342 |
Trade Receivables, Net
Trade Receivables, Net | 12 Months Ended |
Dec. 31, 2023 | |
Trade Receivables, Net [Abstract] | |
TRADE RECEIVABLES, NET | NOTE 5:- TRADE RECEIVABLES, NET a. Trade receivables, net: December 31, 2023 2022 Open accounts $ 574,425 $ 536,534 Checks receivable 14,695 15,260 Current maturities of long-term receivables 146,139 163,175 735,259 714,969 Less - allowance for doubtful accounts (*) 14,251 12,242 Trade receivables, net $ 721,008 $ 702,727 (*) Bad debt expense, net for the years ended December 31, 2023, 2022 and 2021 was $4,532, $3,022 and $1,333 respectively. |
Prepaid Expesnes and Other Acco
Prepaid Expesnes and Other Accounts Receivavable | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expesnes and Other Accounts Receivavable [Abstract] | |
PREPAID EXPESNES AND OTHER ACCOUNTS RECEIVAVABLE | NOTE 6:- PREPAID EXPESNES AND OTHER ACCOUNTS RECEIVAVABLE The following table summarizes the composition of the Group’s prepaid expenses and other accounts receivable: December 31, 2023 2022 Prepaid expenses and advances to suppliers $ 40,679 $ 42,190 Government authorities 34,687 17,908 Employees 443 430 Related Parties (see Note 17) 256 281 Others 8,605 3,726 $ 84,670 $ 64,535 |
Long-Term Investments and Recei
Long-Term Investments and Receivables | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Investments and Receivables [Abstract] | |
LONG-TERM INVESTMENTS AND RECEIVABLES | Note 7:- long-term investments and receivables December 31, 2023 2022 Prepaid expenses and deposits $ 14,004 $ 15,173 Investments in financial assets designated at fair value through other comprehensive income 19,737 9,870 Trade receivables and unbilled receivables 7,829 5,379 Financial assets designated at fair value through profit or loss 4,694 4,856 Dividend preference derivative in TSG (see Note 9) 3,000 3,000 Others 2,738 707 $ 52,002 $ 38,985 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENT | Note 8:- Fair value measurement In determining fair value, the Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The Group’s financial assets and liabilities measured at fair value on a recurring basis, including accrued interest components, consisted of the following types of instruments as of December 31, 2023 and 2022: Fair value measurements December 31, 2023 Level 1 Level 3 Total Assets: Financial assets at fair value through the other comprehensive income $ 19,450 $ 287 $ 19,737 Financial assets measured at fair value through profit or loss - 4,620 4,620 Dividend preference derivative in TSG (1) - 3,000 3,000 Assets in respect of business combinations - 1,368 1,368 $ 19,450 $ 9,275 $ 28,725 Fair value measurements December 31, 2023 Level 3 Total Liabilities: Put options of non-controlling interests $ 57,867 $ 57,867 Contingent consideration in respect of business combination $ 10,576 $ 10,576 $ 68,443 $ 68,443 Fair value measurements December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Financial assets at fair value through the other comprehensive income $ 9,408 $ - $ 462 $ 9,870 Financial assets measured at fair value through profit or loss 738 - 4,762 5,500 Dividend preference derivative in TSG (1) - - 3,000 3,000 Foreign currency derivative contracts - 109 - 109 $ 10,146 $ 109 $ 8,224 $ 18,479 Fair value measurements December 31, 2022 Level 3 Total Liabilities: Put options of non-controlling interests $ 72,188 $ 72,188 Contingent consideration in respect of business combination 30,635 30,635 $ 102,823 $ 102,823 (1) The fair value of dividend preference derivative in TSG was estimated using the Monte-Carlo simulation technique. The Group believes that the carrying amount of cash, short-term deposits, trade receivables, trade payables, overdrafts and other current liabilities approximate their fair value due to the short-term maturities of these instruments. Changes in financial assets and liabilities classified in Level 3: Financial assets measured at fair value Financial Liabilities fair value Balance as of January 1, 2022: $ 2,023 $ 95,773 Increase due to acquisitions 462 19,791 Fair value measured for the first time 4,762 7,086 Change in fair value measurements 977 629 Deduction of the contingent consideration - (17,171 ) Other - (3,285 ) Balance as of December 31, 2022 $ 8,224 $ 102,823 Increase due to acquisitions 1,368 8,039 Fair value measured for the first time - 1,594 Change in fair value measurements (175 ) (893 ) Deduction of the contingent consideration - (39,837 ) Other (142 ) (3,283 ) Balance as of December 31, 2023 $ 9,275 $ 68,443 |
Investments in Companies Accoun
Investments in Companies Accounted for at Equity | 12 Months Ended |
Dec. 31, 2023 | |
Investments in Companies Accounted for at Equity [Abstract] | |
INVESTMENTS IN COMPANIES ACCOUNTED FOR AT EQUITY | Note 9:- Investments in companies accounted for at equity The following table summarizes the Group’s investments in companies accounted for at equity: December 31, 2023 2022 TSG (Joint venture) $ 18,998 $ 19,459 Other 1,798 1,287 $ 20,796 $ 20,746 Investment in TSG The Company holds directly a 50% share interest in the issued and outstanding share capital of TSG, a joint venture engaged in the fields of command-and-control systems, intelligence, homeland security and cyber security. The Company’s investment in TSG is reflected in the consolidated financial statements using the equity method of accounting. At the acquisition date the Company attributed an amount of $2,140 to a separate component of dividend preference derivative. The dividend preference derivative is measured at fair value through profit or loss and is presented in the consolidated statements of financial position under long-term investments and receivables. a. The following table summarizes the balances related to the Company’s investment in TSG in the consolidated statements of financial position: December 31, 2023 2022 Investment in companies accounted for at equity method Shares $ 11,073 $ 11,291 Capital note 7,925 8,168 $ 18,998 $ 19,459 Long-term investments and receivables Dividend preference derivative at fair value through profit or loss $ 3,000 $ 3,000 b. The following table summarizes the changes in the fair value of TSG’s dividend preference derivative: December 31, 2023 2022 Opening balance $ 3,000 $ 2,023 Increase in fair value recognized in profit or loss 85 1,221 Currency exchange rate in other comprehensive income (loss) (85 ) (244 ) Closing balance $ 3,000 $ 3,000 c. The following table summarizes the changes in the carrying amount of the Company’s investment in TSG: January 1, 202 1 $ 27,165 Company’s share of profit 340 Company’s share of other comprehensive income 128 December 31, 2021 $ 27,633 Company’s share of profit (2,027 ) Company’s share of other comprehensive income (loss) (3,053 ) Adjustments arising from translating financial statements from functional currency to presentation currency (3,094 ) December 31, 2022 $ 19,459 Company’s share of profit 686 Company’s share of other comprehensive income (loss) (575 ) Adjustments arising from translating financial statements from functional currency to presentation currency (572 ) December 31, 2023 $ 18,998 d. Summarized financial data of joint venture: (i) Summarized statements of financial position of TSG as of December 31, 2023 and 2022: December 31, 2023 2022 Current assets $ 52,354 $ 67,254 Non-current assets 70,385 65,627 Current liabilities (27,394 ) (33,527 ) Non-current liabilities (64,789 ) (69,534 ) Net assets $ 30,556 $ 29,820 Accumulated cost of share-based payment (1,795 ) (1,705 ) Total equity attributed to shareholders $ 28,761 $ 28,115 50 % 50 % Share of equity in TSG 14,381 14,058 Excess of fair value over carrying amount 4,617 5,401 Total investment carrying amount $ 18,998 $ 19,459 (ii) Summarized operating results of TSG for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, 2023 2022 2021 Revenues $ 79,449 $ 69,714 $ 77,035 Net income (loss) 2,587 (2,780 ) 2,104 Other comprehensive income (loss) 1,236 (6,107 ) 255 Total comprehensive income (loss) $ 3,823 $ (8,887 ) $ 2,359 Company’s share in TSG 50 % 50 % 50 % 1,912 (4,444 ) 1,180 Amortization of excess cost of intangible assets net of tax (608 ) (637 ) (712 ) Company’s share of total comprehensive income (loss) $ 1,305 $ (5,081 ) $ 468 Company’s share of other comprehensive income (loss) 678 (3,053 ) 128 Company’s share of profit (loss) 686 (2,027 ) 340 $ 1,364 $ (5,081 ) $ 468 |
Property, Plants and Equipment,
Property, Plants and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plants and Equipment, Net [Abstract] | |
PROPERTY, PLANTS AND EQUIPMENT, NET | NOTE 10:- PROPERTY, PLANTS AND EQUIPMENT, NET a. Property, plants and equipment, net, are comprised of the following as of the below dates: Computers, Leasehold Motor Software Total Cost Balance at January 1, 2023 $ 139,977 $ 42,816 $ 7,497 $ 2,419 $ 192,709 Initially consolidated company 3,215 2,051 12 25 5,303 Purchases 12,402 3,160 278 463 16,303 Disposals (15,564 ) (3,746 ) (1,990 ) (110 ) (21,410 ) Exchange rate differences from translation of foreign operations (2,970 ) (1,149 ) (235 ) (47 ) (4,401 ) Balance at December 31, 2023 $ 137,060 $ 43,132 $ 5,562 $ 2,750 $ 188,504 Accumulated depreciation: Balance at January 1, 2023 $ 105,874 $ 24,762 $ 4,844 $ 2,258 $ 137,738 Initially consolidated company 2,002 709 3 21 2,735 Depreciation 13,500 4,223 693 97 18,513 Disposals (15,224 ) (3,490 ) (1,488 ) (110 ) (20,312 ) Loss of Control Exchange rate differences from translation of foreign operations (2,201 ) (669 ) (172 ) (59 ) (3,101 ) Balance at December 31,2023 $ 103,951 $ 25,535 $ 3,880 $ 2,207 $ 135,573 Depreciated cost at December 31, 2023 $ 33,109 $ 17,597 $ 1,682 $ 543 $ 52,931 Computers, Leasehold Motor vehicles Software Total Cost Balance at January 1, 2022 $ 145,333 $ 41,911 $ 8,305 $ 2,546 $ 198,095 Entrance to consolidation 4,024 453 351 111 4,939 Purchases 17,298 4,675 368 114 22,455 Disposals (10,735 ) (418 ) (560 ) (25 ) (11,738 ) Loss of Control (684 ) (1,337 ) - - (2,021 ) Exchange rate differences from translation of foreign operations (15,259 ) (2,468 ) (967 ) (327 ) (19,021 ) Balance at December 31, 2022 $ 139,977 $ 42,816 $ 7,497 $ 2,419 $ 192,709 Accumulated depreciation: Balance at January 1, 2022 $ 108,762 $ 25,444 $ 4,673 $ 2,330 $ 141,209 Entrance to consolidation 2,803 388 219 107 3,517 Depreciation 14,709 2,834 909 75 18,527 Disposals (10,287 ) (242 ) (384 ) (23 ) (10,936 ) Loss of Control (308 ) (971 ) - - (1,279 ) Exchange rate differences from translation of foreign operations (9,805 ) (2,691 ) (573 ) (231 ) (13,300 ) Balance at December 31,2022 $ 105,874 $ 24,762 $ 4,844 $ 2,258 $ 137,738 Depreciated cost at December 31, 2022 $ 34,103 $ 18,054 $ 2,653 $ 161 $ 54,971 b. Depreciation expenses totaled $18,513, $18,527 and $20,468 for the years ended December 31, 2023, 2022 and 2021, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS, NET | NotE 11:- Intangible Assets, Net a. Intangible assets, net, are comprised of the following as of the below dates: Customer Capitalized Acquired Other Total Cost Balance at January 1, 2023 $ 309,979 $ 283,038 $ 100,337 $ 12,270 $ 705,624 Entrance to consolidation 20,902 - - 1,706 22,608 Purchases - 14,550 962 - 15,512 Disposals - (21 ) - - (21 ) Exchange rate differences from translation of foreign operations (3,779 ) (4,699 ) (324 ) (361 ) (9,163 ) Balance at December 31, 2023 $ 327,102 $ 292,868 $ 100,975 $ 13,615 $ 734,560 Accumulated depreciation: Balance at January 1, 2023 $ 169,567 $ 237,253 $ 71,843 $ 4,235 $ 482,898 Depreciation 27,747 11,634 10,227 1,657 51,265 Disposals - (21 ) - - (21 ) Exchange rate differences from translation of foreign operations (2,400 ) (3,892 ) (123 ) (95 ) (6,510 ) Balance at December 31,2023 $ 194,914 $ 244,974 $ 81,947 $ 5,797 $ 527,632 Depreciated cost at December 31, 2023 $ 132,188 $ 47,894 $ 19,028 $ 7,818 $ 206,928 Customer relationship Capitalized Software costs Acquired technology Other Total Cost Balance at January 1, 2022 $ 307,256 $ 289,506 $ 97,395 $ 12,906 $ 707,063 Entrance to consolidation 26,643 - 6,152 843 33,638 Purchases - 14,732 1,181 - 15,913 Disposals - (415 ) (1,204 ) - (1,619 ) Exchange rate differences from translation of foreign operations (23,920 ) (20,785 ) (3,187 ) (1,479 ) (49,371 ) Balance at December 31, 2022 $ 309,979 $ 283,038 $ 100,337 $ 12,270 $ 705,624 Accumulated depreciation: Balance at January 1, 2022 $ 154,112 $ 243,264 $ 64,381 $ 3,370 $ 465,127 Depreciation 26,668 11,562 9,986 1,285 49,501 Disposals - (416 ) (1,205 ) - (1,621 ) Exchange rate differences from translation of foreign operations (11,213 ) (17,157 ) (1,319 ) (420 ) (30,109 ) Balance at December 31,2022 $ 169,567 $ 237,253 $ 71,843 $ 4,235 $ 482,898 Depreciated cost at December 31, 2022 $ 140,412 $ 45,785 $ 28,494 $ 8,035 $ 222,726 b. Amortization expenses totaled $51,265, $49,501, and $58,611 for the years ended December 31, 2023, 2022 and 2021, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill [Abstract] | |
GOODWILL | Note 12:- Goodwill The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022: December 31, 2023 2022 Opening balance $ 926,161 $ 932,854 Acquisition of subsidiaries 23,112 52,651 Classifications (2,672 ) (1,502 ) Foreign currency translation adjustments (10,020 ) (57,842 ) Closing balance $ 936,581 $ 926,161 The Group performed annual impairment tests as of December 31, 2023, 2022 and 2021 and did not identify any impairment losses (see Note 2(15)). For more information regarding allocation of goodwill to each cash-generating unit see Note 25(b). The perpetual growth rates and discount rates (corresponding to the weighted average cost of capital – “WACC”) applied for impairment testing purposes in 2023 and 2022 were as follows: 2023 2022 Pre-tax Growth rate Pre-tax Growth rate Matrix IT (1) 10.4%-10.7 % 3 % 9.2%-10.1 % 3 % Sapiens (2) 11 % 3 % 11 % 3 % Magic Software (3) 11.5 % 3 % 11 % 3 % Other consolidated subsidiaries (4) (1) The goodwill allocated to the operating segment Matrix IT is mainly related to two groups of cash-generating units. Cash flows are discounted using weighted pre-tax discount rates that range between 10.4% to 10.7% and a fixed growth rate of 3% in 2023 (2022 - weighted pre-tax discount rates that range between 9.2% to 10.1% and fixed growth rates of 3%). The carrying amount of goodwill allocated to the other groups of cash-generating units included in Matrix IT is immaterial. (2) The goodwill allocated to the operating segment Sapiens is mainly related to two groups of cash-generating units. Cash flows are discounted using a weighted pre-tax discount rate of 11% and a fixed growth rate of 3% in 2023 and 2022. The carrying amount of goodwill allocated to the other groups of cash-generating units included in Sapiens is immaterial. (3) The goodwill allocated to the operating segment Magic Software is related to four groups of cash-generating units. Cash flows are discounted using weighted pre-tax discount rates of 11.5% and a fixed growth rate of 3% in 2023 (2022 - weighted pre-tax discount rates of 11% and fixed growth rates of 3%). (4) Goodwill is allocated across multiple groups of cash-generating units. The carrying amount of goodwill allocated to each group of cash-generating units is immaterial. The Group performed sensitivity analyses regarding the main assumptions in the impairment tests. No impairment of the goodwill tested would be recognized in the event of a reasonably possible change in the assumptions used in 2023 (the same was true for 2022). The Group performed annual impairment tests as of December 31, 2023, 2022 and 2021 and did not identify any impairment losses |
Short Term Loans From Banks and
Short Term Loans From Banks and Others | 12 Months Ended |
Dec. 31, 2023 | |
Short Term Liabilities to Banks and Others [Abstract] | |
SHORT TERM LOANS FROM BANKS AND OTHERS | Note 13:- short term loans from December 31, 2023 Interest rate December 31, (%) Currency 2023 2022 Current maturities of long-term loans from banks and other financial institutions 1.4 - Prime + 1.5 NIS $ 66,356 $ 78,883 Commercial securities not listed Prime -1 NIS 55,142 56,834 Short-term bank loans and credit line 3.4 - 6.8 NIS and USD 9,533 13,168 Current maturities of long-term loans from banks 7.5 – 8.1 NIS Linked to USD 13,208 8,908 Short-term interest on long-term loans from banks and other financial institutions 3.4 – 8.1 NIS and USD 1,734 89 $ 145,973 $ 157,882 |
Other Accounts Payable
Other Accounts Payable | 12 Months Ended |
Dec. 31, 2023 | |
Other Accounts Payable [Abstract] | |
OTHER ACCOUNTS PAYABLE | Note 14:- other accounts payable Other accounts payable are comprised of the following as of the below dates: December 31, 202 3 2022 Government institutions $ 42,102 $ 43,955 Accrued expenses and other current liabilities 31,022 42,385 $ 73,124 $ 86,340 |
Long Term Loans From Banks and
Long Term Loans From Banks and Others | 12 Months Ended |
Dec. 31, 2023 | |
Long Term Liabilities to Banks and Others [Abstract] | |
LONG TERM LOANS FROM BANKS AND OTHERS | Note 15:- Long term Loans from a. Long term liabilities to banks and others are comprised of the following as of the below dates: Long-term Current Long-term long-term Interest rate % Currency December 31, 2023 December 31, 2022 1.4 - Prime + 1.5 NIS (Unlinked) $ 122,951 $ 66,356 $ 56,595 $ 88,532 7.5-8.1 USD (Unlinked) 47,500 13,208 34,292 27,342 $ 170,451 $ 79,564 $ 90,887 $ 115,874 b. Maturity dates: December 31, 202 3 2022 First year (current maturities) $ 79,564 $ 87,791 Second year 47,859 67,956 Third year 21,864 32,430 Fourth year 17,281 9,998 Fifth year and thereafter 3,883 5,490 $ 170,451 $ 203,665 Details of liens, guarantees and credit facilities are described in Note 21(b) |
Debentures
Debentures | 12 Months Ended |
Dec. 31, 2023 | |
Debentures [Abstract] | |
DEBENTURES | NOTE 16:- DEBENTURES The Group’s liabilities under debentures are attributable to debentures issued by Formula, Sapiens and Matrix. The debentures are all listed for trading on the Tel-Aviv Stock Exchange. a. Debentures are comprised of the following as of the below dates: Effective Par value in Par Value Unamortized Current Total Short-term Total short- % Currency (thousand) December 31, 2023 Formula’s Series A Secured Debentures (2.8%) 2.4 NIS (Unlinked) NIS 34,211 $ 9,432 $ 22 $ 9,432 $ - $ 154 $ 9,586 Formula’s Series C Secured Debentures (2.3%) 2.7 NIS (Unlinked) NIS 412,264 $ 113,665 (932 ) 22,327 90,405 213 112,945 Sapiens’ Series B Debentures (3.37%) 3.3 NIS (Linked to fix rate of USD) NIS 210,000 $ 59,389 (50 ) 19,796 39,543 - 59,339 Matrix IT’ Series B Debentures (4.1%) 4.5 NIS (Unlinked) NIS 441,656 $ 121,769 (1,450 ) 18,726 101,593 2,237 122,556 $ 304,255 $ (2,410 ) $ 70,281 $ 231,541 $ 2,604 $ 304,426 Effective Par value in Par Value Unamortized and costs, net Current Total Short-term Total % Currency (thousand) December 31, 2022 Formula’s Series A Secured Debentures (2.8%) 2.4 NIS (Unlinked) NIS 68,422 $ 19,444 $ 85 $ 9,722 $ 9,807 $ - $ 19,529 Formula’s Series C Secured Debentures (2.3%) 2.7 NIS (Unlinked) NIS 493,244 $ 140,166 (1,477 ) 23,012 115,677 265 138,954 Sapiens’ Series B Debentures (3.37%) 3.3 NIS (Linked to fix rate of USD) NIS 280,000 $ 79,186 (114 ) 19,796 59,276 1,337 80,409 Matrix IT’ Series B Debentures (4.1%) 4.5 NIS (Unlinked) NIS 475,615 $ 135,156 (1,343 ) 9,650 124,163 1,220 135,033 $ 373,952 $ (2,849 ) $ 62,180 $ 308,923 $ 2,822 $ 373,925 During the years ended December 31, 2023, 2022 and 2021, the Group recorded $7,450, $7,533 and $7,056, respectively, of interest expenses, and $667, $158 and ($109), respectively, of amortization of debt premium, discount and issuance costs, net in respect of the Group’s debentures. b. Scheduled aggregate principal annual payments of the debentures: Repayment amount 2024 $ 70,281 2025 84,191 2026 84,192 2027 18,726 2028 46,865 $ 304,255 c. Formula’s debentures i) Formula Systems Series A Secured Debentures On September 16, 2015, Formula issued Formula Systems Series A Secured Debentures in an aggregate principal amount of NIS 102,260 thousand (approximately $26,295), at a purchase price equal to 100% of their par value, payable in eight equal annual installments on July 2 nd nd nd On January 31, 2018, Formula issued additional Formula Systems Series A Secured Debentures in an aggregate principal amount of NIS 150,000 thousand (approximately $44,053) through a private placement to qualified investors in Israel. The gross proceeds received by Formula from the issuance of Formula Systems Series A Secured Debentures in January 2018 were NIS 155,205 thousand (approximately $45,581), out of which NIS 336 thousand was attributed to interest payable (approximately $99). Debt premium of NIS 4,869 thousand (approximately $1,430) net of issuance costs of NIS 782 thousand (approximately $225) was allocated to the Formula Systems Series A Secured Debentures and is amortized as financial income over the remaining term of the Formula Systems Series A Secured Debentures due in 2024. The Formula Systems Series A Secured Debentures issued in September 2015, together with the Formula Systems Series A Secured Debentures sold in the private placement, form one single series with identical terms and conditions. The Series A Secured Debentures are denominated in New Israeli Shekels not linked to any currency or index, and are non-convertible. The Formula Systems Series A Secured Debentures are secured with collateral consisting of shares of Matrix IT, Magic Software and Sapiens (see Note 21a). The Formula Systems Series A Secured Debentures are listed for trading on the Tel-Aviv Stock Exchange. As of December 31, 2023 and 2022, the fair value of Formula’s Series A Secured Debentures, based on the quoted market price on the Tel-Aviv Stock Exchange, was approximately $9,338 and $19,202, respectively. ii) Formula Systems Series C Secured Debentures On March 31, 2019, Formula issued Formula Systems Series C Secured Debentures in an aggregate principal amount of NIS 300,000 thousand (approximately $82,600), at a purchase price equal to 100% of their par value. The principal due under the Series C Secured Debentures is payable in five annual installments of NIS 33,000 thousand on December 1 of each of the years 2020 through 2024 and two annual installments of NIS 67,500 thousand on December 1 of each of the years 2025 and 2026. The outstanding principal amount under the Formula Systems Series C Secured Debentures bears interest at a fixed rate of 2.29% per annum (subject to adjustments based on the credit rating of the debentures), payable on December 1 st st On April 12, 2021, Formula issued additional Formula Systems Series C Secured Debentures in an aggregate principal amount of NIS 160,000 thousand (approximately $48,617) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series C Secured Debentures in April 2021 were NIS 165,920 thousand (approximately $50,524), out of which NIS 1,329 thousand was attributed to interest payable (approximately $405). Debt premium of NIS 4,591 thousand (approximately $1,398) net of issuance costs of NIS 752 thousand (approximately $229) was allocated to the Formula Systems Series C Secured Debentures and is amortized as financial income over the remaining term of the Formula Systems Series A Secured Debentures due in 2026. On August 30, 2022, Formula issued additional Formula Systems Series C Secured Debentures in an aggregate principal amount of NIS 200,000 thousand (approximately $60,514) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series C Secured Debentures in August 2022 were NIS 195,000 thousand (approximately $59,002), out of which NIS 1,126 thousand was attributed to interest payable (approximately $341). Debt deficit of NIS 7,076 thousand (approximately $2,141) including issuance costs of NIS 950 thousand (approximately $287) were allocated to the Formula Systems Series C Secured Debentures and are amortized as financial expenses over the remaining term of the Formula Systems Series C Secured Debentures due in 2026. The Formula Systems Series C Secured Debentures issued in March 2019, together with the Formula Systems Series C Secured Debentures sold in April 2021 and in August 2022 in private placements, form one single series with identical terms and conditions. The Formula Systems Series C Secured Debentures are denominated in New Israeli Shekels and are not linked to any currency or index and are non-convertible. The Formula Systems Series C Secured Debentures are secured with collateral consisting of shares of Matrix IT, Magic Software and Sapiens (see Note 21a). The Series C Secured Debentures are listed for trading on the Tel-Aviv Stock Exchange. As of December 31, 2023 and 2022, the fair value of Formula’s Series C Secured Debentures, based on the quoted market price on the Tel-Aviv Stock Exchange, was approximately $109,494 and $133,046, respectively. The offerings of Formula’s debentures were made only in Israel and not to U.S. persons (as defined in Rule 902(k) under the Securities Act of 1933, as amended (the “Securities Act”)), in an overseas directed offering (as defined in Rule 903(b)(i)(ii) under the Securities Act) and were exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S thereunder. The sale of Formula debentures was not registered under the Securities Act, and Formula debentures may not be offered or sold in the United States and/or to U.S. persons without registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. In accordance with the indenture for the Formula Systems Series A Secured Debentures and the Formula Systems Series C Secured Debentures, Formula has undertaken to maintain a number of conditions and limitations on the manner in which it operates its business, including limitations on its ability to undergo a change of control, distribute dividends, incur a floating charge on its assets, or undergo an asset sale or other change that results in a fundamental change in its operations, and to meet certain financial covenants (see Notes 21a and 21c(1)(i)). d. Sapiens’ Series B Debentures On September 16, 2017, Sapiens issued its unsecured Series B Debentures in an aggregate principal amount of NIS 280,000 thousand (approximately $79,186), linked to the US dollar and payable in eight equal annual payments of $9,898 on January 1 st st st On June 8, 2020, Sapiens issued additional Sapiens’ Series B Debentures in an aggregate principal amount of NIS 210,000 thousand (approximately $60,362) through a public offering in Israel. The gross proceeds received from the issuance of Sapiens’ Series B Debentures in June 2020 were NIS 210,840 thousand (approximately $60,603), out of which approximately NIS 3,006 thousand was attributed to interest payable (approximately $864). Debt discount of NIS 2,166 thousand (approximately $623) and issuance costs of NIS 2,326 thousand (approximately $669) were allocated to Sapiens’ Series B Debentures and are amortized as financial expenses over the remaining term of the Sapiens Series B Debentures due in 2026. Sapiens’ Series B Debentures issued in September 2017 together with the Sapiens’ Series B Debentures issued in June 2020, form one single series with identical terms and conditions. Sapiens’ Series B Debentures are linked to the US Dollar, unsecured and non-convertible. Sapiens’ Series B Debentures are listed for trading on the TASE. As of December 31, 2023 and 2022, the fair value of Sapiens’ Series B Debentures, based on the quoted market price on the Tel-Aviv Stock Exchange, was approximately $57,667 and $75,192, respectively. The offerings of Sapiens’ debentures were made only in Israel and not to U.S. persons (as defined in Rule 902(k) under the Securities Act of 1933, as amended (the “Securities Act”)), in an overseas directed offering (as defined in Rule 903(b)(i)(ii) under the Securities Act) and was exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S thereunder. The sale of Sapiens debentures was not registered under the Securities Act, and the Sapiens debentures may not be offered or sold in the United States and/or to U.S. persons without registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. In accordance with the indenture for the Sapiens Series B Debentures, Sapiens has undertaken to comply with a number of conditions and limitations on the manner in which it operates its business, including limitations on its ability to undergo a change of control, distribute dividends, incur a floating charge on Sapiens’ assets, or undergo an asset sale or other change that results in a fundamental change in Sapiens’ operations and to meet certain financial covenants (see Note 21c(3)(iii)). e. Matrix IT Series B Debentures On September 18, 2022, Matrix IT issued the Matrix IT Series B Debentures in an aggregate principal amount of NIS 295,249 thousand (approximately $87,872), at a purchase price equal to 100% of their par value. The principal due under the Matrix IT Series B Debentures is payable in thirteen (13) semi-annual installments each equal to approximately 7.14% of the aggregate principal amount (or approximately NIS 21,081 thousand) on February 1 and on August 1 of each of the years 2023 through 2029 with the last payment equal to 7.18% of the aggregate principal amount (or approximately NIS 21,196 thousand) paid on February 1, 2030. The outstanding principal amount under the Matrix IT Series B Debentures bears interest at a fixed rate of 4.1% per annum (subject to adjustments based on the credit rating of the debentures), payable on February 1 st st On December 4, 2022, Matrix IT issued additional Matrix IT Series B Debentures in an aggregate principal amount of NIS 180,366 thousand (approximately $53,680) through a private placement to qualified investors in Israel. The gross proceeds received by Matrix IT for the issuance of Matrix IT Series B Debentures in December 2022 were NIS 178,385 thousand (approximately $53,107), out of which NIS 1,582 thousand was attributed to interest payable (approximately $471). Debt deficit of NIS 1,981 thousand (approximately $590) including issuance costs of NIS 399 thousand (approximately $119) were allocated to the Matrix IT Series B Debentures and are amortized as financial expenses over the remaining term of the Matrix IT Series B Debentures due in 2030. The Matrix IT Series B Debentures issued in September 2022, together with the Matrix IT Series B Debentures sold in December 2022 in a private placement, form one single series with identical terms and conditions. As of December 31, 2023 and 2022, the fair value of Matrix IT’s Series B Secured Debentures, based on the quoted market price on the Tel-Aviv Stock Exchange, was approximately $122,938 and $135,156, respectively. |
Related Parties Transactions
Related Parties Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure of related party [Abstract] | |
Related Parties Transactions | Note 17:- RELATED PARTies TRANSACTIONS a) Transactions with Asseco and affiliated companies During the years ended December 31, 2023, 2022 and 2021, Asseco provided back-office services, professional services and fixed assets to Sapiens’ wholly owned subsidiary, Sapiens Poland, in amounts totaling approximately $165, $ 181and During the years ended December 31, 2023, 2022 and 2021, Sapiens Poland performed services as a sub-contractor on behalf of Asseco for clients of Asseco in total amounts of approximately $3,500, $2,900 and $3,200, respectively. For historic reasons, Asseco issues invoices to those clients and then Sapiens in turn invoices Asseco on a back-to-back basis (with no margin to Asseco). As of December 31, 2023 and 2022 the Group had trade payable balances due from its transactions with Asseco, as detailed above, in amounts of $1,233 and $2,927, respectively. As of December 31, 2023 and 2022, the Group had trade receivables balances due from its transactions with Asseco, as detailed above, in amounts of approximately $1,008 and $1,149, respectively. b) Fees paid for board services in affiliates Sapiens paid Formula director fees for the years ended December 31, 2023, 2022 and 2021, of approximately $28, $29 and $27, respectively, in respect of Mr. Guy Bernstein, Sapiens’ Chairman and Formula’s chief executive officer. Matrix IT paid Formula director fees for the years ended December 31, 2023, 2022 and 2021, of approximately $27, $33 and $37, respectively, in respect of Mr. Guy Bernstein, Matrix IT’s Chairman and Formula’s chief executive officer. c) Compensation of key officers of the Company The following amounts disclosed in the table are recognized as an expense during the reporting period related to officers and directors of the Company: Year ended December 31, 2023 2022 Short-term employee benefits $ 4,204 $ 4,665 Share-based compensation 7,197 8,104 $ 11,401 $ 12,769 d) Back-office services During the years ended December 31, 2023, 2022 and 2021, Magic Software provided back-office services to Formula in amounts totaling approximately $224, $240 and $160, respectively. e) Other Transactions The Group’s subsidiaries and affiliates engage from time to time with each other in non-material transactions, in the ordinary course of business, where the amounts involved, and the nature of the transactions, are not material for either of the parties. The Group believes that these transactions are made on an arms’ length basis upon terms and conditions no less favorable to the Group, its subsidiaries and affiliates, as it could obtain from unaffiliated third parties. If Group engages with its subsidiaries and affiliates in transactions which are not in the ordinary course of business, the Group receives the approvals required under the Companies Law. These approvals include audit committee approval, board approval and, in certain circumstances, shareholder approval. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure of leases [Abstract] | |
LEASES | Note 18:- LEASES The Group leases substantially all of its office space and vehicles under operating leases. The Group’s leases have original lease periods expiring between 2024 and 2036. Some leases include one or more options to renew. The Group does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably certain at lease commencement. Lease payments included in the measurement of the lease liability comprise the following: the fixed non-cancellable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Under IFRS 16, all leases with durations greater than 12 months, including non-cancellable operating leases, are now recognized on the statement of financial position. The aggregated present value of lease agreements is recorded as a long-term asset titled operating lease right-of-use assets. The corresponding lease liabilities are classified between operating lease liabilities which are current and long-term. Maturity analysis of undiscounted future lease payments receivable for operating leases: 2024 $ 45,871 2025 36,524 2026 13,448 2027 12,477 2028 12,419 2029 and thereafter 25,601 Total undiscounted cash flows $ 146,340 Less imputed interest (17,637 ) Present value of lease liabilities $ 128,703 a. Information on leases: Year ended December 31, 2023 2022 Interest expense on lease liabilities $ 7,195 $ 4,822 Total cash outflow for leases $ 55 ,064 $ 49,702 b. Disclosures in respect of right-of-use assets: Land and buildings Motor vehicles Total Cost: Balance as of January 1, 2023 $ 179,617 $ 50,252 $ 229,869 Additions during the year: New leases 38,376 23,092 61,468 Adjustments for indexation 1,573 418 1,991 Adjustments arising from translating financial statements of foreign operations (2,111 ) (814 ) (2,925 ) Modification of leases (3,590 ) 66 (3,524 ) Acquisition of subsidiaries 265 - 265 Disposals during the year: Termination of leases (18,323 ) (11,182 ) (29,505 ) Balance as of December 31, 2023 $ 195,807 $ 61,832 $ 257,639 Accumulated depreciation: Balance as of January 1, 2023 $ 88,429 $ 24,600 $ 113,029 Additions during the year: Depreciation 34,135 17,919 52,054 Adjustments arising from translating financial statements of foreign operations 24 (7 ) 17 Disposals during the year: Termination of leases (17,874 ) (10,238 ) (28,112 ) Balance as of December 31, 2023 104,714 32,274 136,988 Depreciated cost at December 31, 2023 $ 91,093 $ 29,558 $ 120,651 Land and buildings Motor vehicles Total Cost: Balance as of January 1, 2022 $ 173,450 $ 54,036 $ 227,486 Additions during the year: New leases 30,711 22,483 53,194 Adjustments for indexation 2,438 1,017 3,455 Adjustments arising from translating financial statements of foreign operations (15,571 ) (5,471 ) (21,042 ) Modification of leases 589 89 678 Acquisition of subsidiaries 2,714 40 2,754 Disposals during the year: Termination of leases (14,714 ) (21,942 ) (36,656 ) Balance as of December 31, 2022 $ 179,617 $ 50,252 $ 229,869 Accumulated depreciation: Balance as of January 1, 2022 $ 77,669 $ 33,984 $ 111,653 Additions during the year: Depreciation 31,387 15,893 47,280 Adjustments arising from translating financial statements of foreign operations (6,902 ) (3,416 ) (10,318 ) Disposals during the year: Termination of leases (13,725 ) (21,861 ) (35,586 ) Balance as of December 31, 2022 88,429 24,600 113,029 Depreciated cost at December 31, 2022 $ 91,188 $ 25,652 $ 116,840 |
Employee Option Plans
Employee Option Plans | 12 Months Ended |
Dec. 31, 2023 | |
Employee Option Plans [Abstract] | |
EMPLOYEE OPTION PLANS | Note 19:- Employee Option Plans a) Formula and its subsidiaries grant, from time to time, options, restricted share units or restricted shares to their officers and employees to purchase shares in the respective companies. In general, the options expire ten years after grant. The following table sets forth the breakdown of share-based compensation expense resulting from such grants, as included in the consolidated statements of profit or loss: Year ended December 31, 2023 2022 2021 General and administrative expenses $ 18,622 $ 14,953 $ 14,767 $ 18,622 $ 14,953 $ 14,767 b) Formula In August 2021, the Company adopted its 2021 Share Incentive Plan (the “2021 Plan”). Pursuant to the 2021 Plan, we may grant from time to time to the Company’s employees, office holders and consultants’ options to purchase, share-based awards or restricted shares with respect to, up to an aggregate of 350,000 Ordinary shares (including 48,378 Ordinary shares that were reserved for issuance under prior years plans and not subject to outstanding grants and transferred to the 2021 Plan). The 2021 Plan is administered by the Company’s board of directors. The 2021 Plan provides that options, restricted shares, or other stock-based awards may be granted, from time to time, to such grantees to be determined by the Company’s board of directors, at such exercise prices and with such vesting or other terms as shall be determined by the Company’s board of directors at its sole and absolute discretion. In March 2022, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded 21,000 restricted shares under the 2021 Plan (the “new restricted shares”). These restricted shares vest on a quarterly basis over a six-year period, commencing on March 15, 2022 and concluding on December 31, 2027. Total fair value of the grant was calculated based on the Formula share price on the grant date and equaled $232 ($96.7 per share). The total compensation expense that the Company recorded in its statement of profit or loss for the years ended December 31, 2023, 2022 in respect of the above grant was $407 and $973, respectively. As of December 31, 2023, 9,000 Ordinary shares out of the 21,000 Ordinary shares, were fully vested. In March 2022, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded employees of the Company 2,400 restricted shares under the 2021 Plan (the “new restricted shares”). These restricted shares vest at certain points in time over a six-year period, commencing on March 15, 2022 and concluding on December 31, 2027. The total fair value of the grant was calculated based on the Formula share price on the grant date and equaled $2,031 ($96.7 per share). In January 2023, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded 15,000 restricted shares under the 2021 plan (the “restricted shares”). These restricted shares vest on an annual basis over a six-year period, commencing on December 31, 2023 and concluding on December 31, 2029. The total fair value of the grant was calculated based on the Formula share price on the grant date and equaled $1,225 ($81.65 per share). As of December 31, 2023, none of the restricted shares under this grant were vested. In November 2020, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded its chief executive officer 611,771 restricted stock units (“RSUs”) in respect of ordinary shares of the Company. 66.67% of the RSUs (i.e., 407,847 RSUs) are subject to time-based vesting that shall start as of the grant date and shall end at December 31, 2027, subject to the continued engagement of Formula’s chief executive officer with the Company as of that date (the “Vesting Period”); and up to 33.33% of the RSUs (i.e., 203,924 RSUs as of the date hereof) are subject to performance-based vesting, and shall vest at December 31, 2027 on a pro-rata basis with respect to each fiscal year (starting as of January 1, 2020) during the Vesting Period in which the target EBITDA (as defined in the grant) is achieved, subject to the continued engagement of Formula’s chief executive officer with the Company. At the end of the vesting period, the number of performances-based RSUs that vests shall be equal to (i) the number of fiscal years in which the target EBITDA (as defined in the grant) was achieved multiplied by (ii) 25,490.50 RSUs (rounded to the nearest whole number, up to a cap of 203,924 RSUs in total). The total fair value of the grant was calculated based on the Formula share price on the grant date and equaled NIS 170,684 thousand, or $50,054 ($81.8 per share). The total compensation expense the Company recorded in its statement of profit or loss in respect of this grant, in accordance with accounting principles, for the years ended December 31, 2023, 2022, and 2021 was approximately $6,460, $7,089 and $7,373, respectively. In the event of termination of Formula’s chief executive officer services agreement with the Company, by the Company for Cause (as defined in the services agreement), the RSUs will immediately terminate and become null and void, and all interests and rights of Formula’s chief executive officer in and to the same will expire. In case of termination of Formula’s chief executive officer services agreement by the Company not for Cause, or due to the resignation of Formula’s chief executive officer for Good Reason (as defined in the grant), all unvested RSUs that could have vested from the grant date until December 31, 2027, assuming all performance and time conditions and future targets would have been fulfilled (including all targets that would have resulted in vesting with respect to any Previous Year which could have still been met in future years), will accelerate and become immediately vested and exercisable, regardless of the actual occurrence or failure to occur of any of the future performance targets relating to those RSUs. In the event of resignation by Formula’s chief executive officer not for Good Reason (as defined in the grant), Formula’s chief executive officer RSUs will vest, in an accelerated manner, in such portion equal to the pro-rata portion of the Vesting Period that has already lapsed (based on the full number of Fiscal Quarters that have lapsed form January 1, 2020 until the actual resignation date, including notice period). However, any Performance Based RSUs for which the applicable target was not achieved up until the resignation date (including the notice period) will expire and terminate. Total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Formula equity incentive plan as of December 31, 2023, 2022 and 2021 were $27,703 and $34,972 and $45,973 respectively. c) Matrix IT In December 2022, Matrix IT entered into a new employment agreement with its chief executive officer, Mr. Moti Gutman, for the provision of management services for a term of five years starting on January 1, 2023. As part of the new employment agreement, Matrix IT awarded Mr. Gutman 375,000 Matrix restricted shares. 40% of the options will be vested on December 31, 2024 with the remaining amount vesting in equal parts on December 31, 2025, 2026 and 2027 but any case not before the publication of Matrix IT’s financial statements for each respective year. The fair value of the restricted shares amounted on the date of grant to NIS 27,851 thousand (approximately $7,914). On March 12, 2023, Matrix IT’s board of directors approved, following the approval by Matrix IT’s compensation committee, the allocation of 920,000 options exercisable up to 920,000 ordinary Matrix IT’s shares of NIS 1 par value, to 18 officers and senior employees of Matrix IT or of its controlled companies. Upon termination of an officer’s employment, 45,000 options were forfeited before vesting. The exercise of the options at the date of grant is NIS 71.25. The price is subject to adjustment, including when distributing a dividend. 50% of the options will be vested on March 12, 2025, with the remaining amount vesting in equal parts on March 12, 2026 and 2027. The fair value of the options was estimated on the date of grant using the Binomial model based on the terms which are: risk-free interest rate is 3.34%-4.53%, early exercise factor is 130% and expected volatility is 31%. The contractual life of the options is 5 years from the date of grant. On August 9, 2023, Matrix IT’s board of directors approved, following the approval by Matrix IT’s compensation committee, the allocation of 45,000 options exercisable up to 45,000 ordinary Matrix IT’s shares of NIS 1 par value, to a senior employee of Matrix IT. The exercise of the options at the date of grant is NIS 73.73. The price is subject to adjustment, including when distributing a dividend. 50% of the options will be vested in August, 2025, with the remaining amount vesting in equal parts on August 10, 2026 and 2027. The contractual life of the stock options is 5 years from the grant date. The fair value of the options was estimated on the date of grant using the Binomial model based on the terms which are: risk-free interest rate is 3.34%-4.53%, early exercise factor is 130% and expected volatility is 31%. The contractual life of the options is 5 years from the date of grant. The following table summarizes Matrix IT’s employee stock-based compensation activity during the year ended December 31, 2023: Number of options, RSU and RS Weighted average exercise Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2023 398,878 7.66 0.9 5,144 Granted 1,340,000 14.17 5 8,363 Expired and forfeited (45,000 ) 19.68 Exercised (398,878 ) 7.66 5,135 Outstanding at December 31, 2023 1,295,000 13.6 4.16 7,336 Exercisable at December 31, 2023 - - - - The aggregate intrinsic value provided in the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the respective dates. This value would change based on the change in the market value of Matrix IT’s ordinary shares and the change in the exchange rate between the New Israeli Shekel and dollar. Total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Matrix IT equity incentive plan as of December 31, 2023, 2022 and 2021 were $8,808, $0 and $428, respectively. d) Sapiens: The following table summarizes Sapiens’ stock-based compensation activity during the year ended December 31, 2023: Amount of Weighted average exercise price Weighted average Aggregate Outstanding at January 1, 2023 2,132,763 21.51 3.30 5,531 Granted 429,500 21.09 Exercised (558,695 ) 9.54 Expired and forfeited (58,068 ) 14.59 Outstanding at December 31, 2023 1,945,500 24.52 3.71 9,118 Exercisable at December 31, 2023 796,425 24.78 3.13 3,604 In 2023, 2022 and 2021, Sapiens granted 429,500, 404,500 and 847,000 stock options, respectively, to its employees and directors to purchase its shares. The weighted average grant date fair values of the options granted during the years ended December 31, 2023, 2022 and 2021 were $6.51, $7.22 and $10.35, respectively. The aggregate intrinsic value provided on the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the respective dates. This value would change based on the change in the market value of Sapiens’ common shares. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 was $851, $250 and $8,505, respectively. The options outstanding under Sapiens’ stock option plans as of December 31, 2023 have been separated into ranges of exercise price as follows: Ranges of exercise Options Weighted Average Weighted Options Weighted Average $ (Years) $ $ 8.49 15,000 0.60 8.49 15,000 8.49 9.49-13.88 52,000 1.36 11.49 52,000 11.49 18.26-22.03 816,500 4.86 20.00 188,425 20.93 22.71-27.28 271,250 2.77 23.43 182,500 22.69 28.6-31.06 723,750 3.29 28.95 325,000 29.12 33.48 67,000 3.92 33.48 33,500 33.48 1,945,500 3.71 24.52 796,425 24.78 The total equity-based compensation expense related to all of Sapiens’ equity-based awards, recognized for the years ended December 31, 2023, 2022 and 2021, after being adjusted to comply with IFRS, was $3,186, $4,317 and $5,421, respectively. As of December 31, 2023, there was $3,601 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a weighted-average period of 1.67 years. A summary of the RSU activities in Sapiens in the year ended on December 31, 2023, is as follows: Weighted Average Amount of Grant-Date Fair options value Unvested at January 1, 2023 139,144 $ 26.56 Granted 7,500 19.96 Vested (34,329 ) 24.47 Expired and forfeiture (39,492 ) 24.56 Unvested at December 31, 2023 72,823 $ 27.95 e) Magic Software The following table summarizes Magic Software share-based compensation activity during the year ended December 31, 2023: Number of options Weighted Weighted average (in years) Aggregate Outstanding at January 1, 2023 26,250 $ 0.91 5.95 $ 397 Granted - - Forfeited (20,000 ) 3.51 Exercised (6,250 ) - Outstanding at December 31, 2023 - $ - - $ - Exercisable at December 31, 2023 - $ - - $ - The aggregate intrinsic value provided on the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the respective dates. This value would change based on the change in the market value of Magic Software’s ordinary shares. Total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021, was $61, $344 and $628 respectively. Stock Option Plan of Comm-IT Technology Solutions Ltd (“Comm-IT Solutions”), a subsidiary of Magic Software: Under the Comm-IT Solutions’ 2022 Stock Option Plan, (“Comm-IT Solutions 2022 Plan”), options may be granted to employees, officers, directors and consultants of Comm-IT Solutions and its subsidiaries. Pursuant to Comm-IT Solutions 2022 Plan, Comm-IT Solutions shall reserve in its registered and reserved capital, such sufficient number of shares (subject to any adjustment in the capital under the Comm-IT Solutions 2022 Plan) required in order to consummate the Comm-IT Solutions 2022 Plan. In December 2022, Comm-IT Solutions, awarded 12 of its senior officers 4,028 options to purchase 4,028 shares of Comm-IT Solutions. 827 of the options have fully vested upon their grant, whereas the vesting of the remainder of the options are subject to Comm-IT Solutions and its subsidiaries meeting certain EBITDA targets for the years 2023-2024. In 2023, CommIT fully achieved plan EBITDA targets. A summary of employee option activity under the Comm-IT Solutions 2022 Plan as of December 31, 2023 and changes during the year ended December 31, 2023 are as follows: Number of options Weighted Weighted (in years) Aggregate Outstanding at January 1, 2023 4,028 $ 264.67 7.94 $ 7,499 Granted - Outstanding at December 31, 2023 4,028 256.79 6.94 7,276 Exercisable at December 31, 2023 1,847 $ 27.72 6.93 $ 3,760 As of December 31, 2023, there was $1,465 of total unrecognized compensation cost related to non-vested options of Comm-IT Solutions, which is expected to be recognized in full over a weighted average period of 1.1 years. The options outstanding as of December 31, 2023, have been separated into exercise price categories, as follows: Ranges of Exercise Options Weighted Options Weighted average of exercisable options $ (Years) $ 0.28 3,238 6.92 1,736 0.28 455 297 6.99 111 455 1,822 493 6.99 - - 4,028 6.94 1,847 $ 27.72 |
Employee Benefit Liabilities
Employee Benefit Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefit Liabilities [Abstract] | |
EMPLOYEE BENEFIT LIABILITIES | Note 20:- EMPLOYEE BENEFIT LIABILITIES Employee benefits consist of post-employment benefits, other long-term benefits and termination benefits. a) Post-employment benefits According to the labor laws and Severance Pay Law in Israel, the Israeli companies in the Group are required to pay compensation to an employee upon dismissal or retirement or to make current contributions in defined contribution plans pursuant to section 14 of the Severance Pay Law, as specified below. These liabilities are accounted for as a post-employment benefit. The computation of the Group’s employee benefit liability is made according to the current employment contract based on an employee’s salary and employment term which establish the entitlement to receive the compensation. The post-employment employee benefits are normally financed by contributions classified as a defined benefit plan or as a defined contribution plan, as detailed below. 1) Defined contribution plans Section 14 of the Severance Pay Law, 1963 applies to part of the compensation payments, pursuant to which the fixed contributions paid by the Group into pension funds and/or policies of insurance companies release the Group from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans. 2) Defined benefit plans The Group accounts for that part of the payment of compensation that is not covered by contributions in defined contribution plans, as above, as a defined benefit plan for which an employee benefit liability is recognized and for which the Group deposits amounts in central severance pay funds and in qualifying insurance policies. 3) Other long-term benefits Certain of the Company’s U.S. subsidiaries have a 401(k) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits. These U.S. Subsidiaries match up to 3% of the employees’ contributions up to the plan with no limitation. b) Composition of defined benefit plans is as follows: December 31, 2023 2022 Defined benefit obligation $ 85,743 $ 91,973 Fair value of plan assets (75,316 ) (82,857 ) Net defined benefit liability $ 10,427 $ 9,116 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 21:- Commitments and Contingencies a) Liens 1) Liens have been incurred by Formula over a certain portion of the Matrix IT, Magic Software and Sapiens’ shares which it held. As of December 31, 2023 Formula has collateral in connection with the Series A Secured Debentures and Series C Secured Debentures issued by Formula on the TASE (see Note 16). 2) Composition of pledged shares of Matrix IT, Magic Software and Sapiens owned by Formula as of December 31, 2023: December 31, 2023 Formula’s Series A Secured Debentures Formula’s Series C Secured Debentures Matrix IT ordinary shares, par value NIS 1.0 per share 4,128,865 6,169,761 Magic Software ordinary shares, par value NIS 0.1 per share 5,825,681 3,141,474 Sapiens common shares, par value €0.01 per share 1,260,266 2,957,590 In August 2022, following the private placement of an additional NIS 200,000 thousand par value Series C Secured Debentures, Formula pledged an additional 138,000 shares of Matrix IT and 730,000 shares of Magic (see Note 16). b) Guarantees As of December 31, 2023, the Group provided performance bank guarantees in an aggregate amount of approximately $41,900 as security for performance of various contracts with customers and suppliers. As of December 31, 2023, the Group provided bank guarantees in an aggregate amount of approximately $9,400 as security for rent to be paid for its leased offices. As of December 31, 2023, the Group had restricted bank deposits in an aggregate amount of $1,400 in favor of the above-mentioned bank guarantees. In addition, The Company and its subsidiaries provided certain cross guaranties in favor of certain subsidiaries in the Group. Each of Matrix IT, Sapiens, Magic Software and Formula provides cross guarantees to its subsidiaries. c) Covenants In connection with the Group’s debentures and credit facility agreements with banks and other financial institutions, as of December 31, 2023, the Group committed to the following: 1) Formula i) Formula’s Debentures In accordance with Formula’s indenture for its Series A and Series C Secured Debentures, Formula has undertaken to comply with the following financial covenants and obligations: A covenant not to distribute dividends unless (i) Formula shareholders’ equity attributable to Formula Systems shareholders is at least $290,000, (ii) Formula’s net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) shall not exceed 50% of net CAP (defined as financial indebtedness, net, plus shareholders’ equity), and (iii) the aggregate amount of distributions from January 1, 2016 shall not exceed the aggregate amount of net oncome for the year ended December 31, 2015 together with 75% of accumulated profits from January 1, 2016 until the respective distribution date and (iv) no event of default shall have occurred. a. Financial covenants, including: (i) the equity attributable to Formula Systems shareholders, as reported in Formula’s annual or quarterly financial statements, shall not be less than $215 million (as of December 31, 2023, Formula equity attributable to Formula Systems’ shareholders was approximately $625,762); (ii) Formula’s net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) shall not exceed 65% of net CAP (defined as financial indebtedness, net, plus total equity) (as of December 31, 2023 Formula’s net financial indebtedness was 1.0% of net CAP); (iii) the ratio of Formula’s net financial indebtedness to the last twelve-months period EBITDA will not exceed 5 (all based on the Company’s quarterly and annual consolidated financial statements) (as of December 31, 2023 the ratio of Formula’s net financial indebtedness to EBITDA was 0.03); and (iv) at all times, Formula’s cash balance on a stand-alone basis will not be less than the semi annual interest payments for the unpaid principal amount of Series A and Series C Secured Debentures (as of December 31, 2023 Formula’s cash balances exceed the semi annual interest payments amount). b. Standard events of default, including, among others: 1. Suspension of trading of the debentures on the TASE over a period of 60 days; 2. If the rating of the debentures is less than BBB- by Standard and Poors Maalot or equivalent rating of other rating agencies; 3. Failure to have the debentures rated over a period of 60 days; 4. If there is a change in control without consent of the rating agency; and 5. If Formula fails to continue to control any of its subsidiaries; 2) Matrix IT A. In the context of Matrix IT’s engagements with banks and financial institutions for its credit facilities, Matrix IT has undertaken to comply with the following financial covenants, as they are expressed in its financial statements: (i) The total rate of Matrix IT financial debts and liabilities to banks with the addition of debts in respect of debentures that have been and/or will be issued by Matrix IT and shareholders’ loans that have been and/or will be granted to Matrix IT (collectively, the “debts”) will not exceed 40% of its total balance sheet. As of December 31, 2023 the ratio between Matrix IT’s financial debts and liabilities to banks versus Matrix IT total assets was 7.7%. (ii) The ratio of Matrix IT net debt to the annual EBITDA will not exceed 3.5. As of December 31, 2023, Matrix IT ratio of net debt to EBITDA was 0.53. (iii) Matrix IT equity shall not be lower than NIS 275,000 thousand (approximately $75,820) at all times. As of December 31, 2023 Matrix IT’s equity was approximately NIS 1,049,000 thousand (approximately $289,220). (iv) Matrix IT cash and cash equivalents and short-term bank deposits shall not be less than NIS 50,000 thousand (approximately $13,785). In the context of Matrix IT’s issuance of Commercial Securities which are not listed, Matrix IT committed to maintain at least NIS 300,000 thousand (approximately $82,713) of liquid assets including unused approved bank credits. Such liquid assets should account for not less than NIS 200,000 thousand of cash and cash equivalent and short-term bank deposit (approximately $55,142) . . (v) Matrix IT has committed that the rate of ownership and control of Matrix IT-Systems shall never be below 50.1%. (vi) Matrix IT will not create any pledge on all or part of its property and assets in favor of any third party and will not provide any guarantee to secure any third party’s debts as they are today and as they will be without the banks’ consent (except for a first-rate fixed pledge on an asset which acquisition will be financed by a third party and which the pledge will be in his favor). (vii) Matrix IT will not sell and/or transfer all or part of its assets to others in any manner whatsoever without the banks’ advance written consent unless it is done in the ordinary course of business. B. Matrix IT Series B Debentures: In accordance with Matrix IT’s indenture for its Series B Debentures, Matrix IT has undertaken to comply with the following financial covenants and obligations: (i) Matrix IT total shareholders’ equity (all based on Matrix IT’s quarterly or annual consolidated financial statements, and as defined on Matrix IT Series B Debentures deed of trust) shall not be less than NIS 275,000 thousand (approximately $75,820). As of December 31, 202 3 (ii) Matrix IT net financial indebtedness (all based on Matrix IT’s quarterly or annual consolidated financial statements, and as defined on Matrix IT Series B Debentures deed of trust) shall not exceed 45% of Matrix IT total assets (all based on Matrix IT’s quarterly or annual consolidated financial statements, and as defined on Matrix IT Series B Debentures deed of trust). As of December 31, 2023 Matrix’s net financial indebtedness (all based on Matrix IT’s 2023 annual consolidated financial statements, and as defined on Matrix IT Series B Debentures deed of trust) was 7.7% of total assets. (iii) The ratio of Matrix IT net financial indebtedness (as defined on Matrix IT Series B Debentures deed of trust) to the last twelve-months period EBITDA (as defined on Matrix IT Series B Debentures deed of trust) will not exceed 5 (all based on Matrix IT’s quarterly and annual consolidated financial statements). As of December 31, 2023 the ratio of Matrix IT’s net financial indebtedness to EBITDA (all based on Matrix IT’s 2023 annual consolidated financial statements, and as defined on Matrix IT Series B Debentures deed of trust) was 0.52. 3) Sapiens In accordance with the indenture for Sapiens’ Series B Debentures, Sapiens has undertaken to maintain a number of conditions and limitations on the manner in which it can operate its business, including limitations on its ability to undergo a change of control, distribute dividends, incur a floating charge on its assets, or undergo an asset sale or other change that results in fundamental change in its operations. Sapiens Series B Debentures deed of trust also requires it to comply with certain financial covenants, as described below. A breach of the financial covenants for more than two successive quarters or a substantial downgrade in the rating of the debentures (below BBB-) could result in the acceleration of Sapiens’ obligation to repay the debentures. The deed of trust includes the following provisions: (i) a negative pledge, subject to certain exceptions. (ii) financial covenants, including: (a) the equity attributable to the shareholders of Sapiens, as reported in its annual or quarterly financial statements, will not be less than $120 million. (as of December 31, 2023 Sapiens shareholders’ equity was $447.3 million); (ii) Sapiens’ net financial indebtedness (financial indebtedness offset by cash, marketable securities deposits and other liquid financial instruments) shall not exceed 65% of net CAP (defined as financial indebtedness, net, plus shareholders equity, including deposits and other liquid financial instruments) (as of December 31, 2023 Sapiens’ net financial indebtedness was (46.48%) of net CAP); and (iii) the ratio of Sapiens’ net financial indebtedness to EBITDA (based on accumulated calculation for the four last quarters) shall not exceed 5.5 (as of December 31, 2023 the ratio of Sapiens’ net financial indebtedness to EBITDA was (1.46)). (iii) a covenant not to distribute dividends unless (a) Sapiens equity attributable to Sapiens shareholders’ shall not be less than $160 million, (b) Sapiens net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) does not exceed 65% of net CAP (defined as financial indebtedness, net, plus total equity), (c) the amount of accumulated dividends from the issuance date and going forward shall not exceed Sapiens net income for the year ended December 31, 2016 and the first three quarters of the year ended December 31, 2017, plus 75% of Sapiens accumulated profits from September 1, 2017 and up to the date of distribution, and (d) no event of default shall have occurred. 4) Magic Software Under the terms of the loans with an Israeli financial institutions, Magic Software has undertaken to comply with the following financial covenants, as they will be expressed in its consolidated financial statements: (i) Magic Software’ equity will not be lower than $150 million (one hundred and fifty million U.S. Dollars at all times) - as of December 31, 2023 Magic Software shareholders’ equity was $290,944; (ii) The ratio of Magic Software’ total financial debts less cash to total assets will not exceed 30% - as of December 31, 2023 Magic Software financial debts less cash were negative (-5%, since cash exceeds indebtedness); and (iii) The ratio of Magic Software’s total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 – as of December 31, 2023 the ratio of Magic Software’s net financial indebtedness to EBITDA was negative (-0.31) (cash exceeds indebtedness). As of December 31, 2023, each of Formula, Matrix IT, Sapiens and Magic Software was in compliance with all of its financial covenants. d) Legal proceedings 1) On November 23, 2020, Olir Trade and Industries Ltd. (“Olir”) filed a derivative action and a motion to certify a derivative action, with the District Court (Economic Division) of Tel Aviv-Jaffa, Israel (Derivative Action No. 58348-11-20) (the “Claim” and the “Motion to Certify”, respectively) (as reported in the Company’s Report of Foreign Private Issuer on Form 6-K furnished to the Securities and Exchange Commission on December 9, 2020). In the framework of the Motion to Certify, Olir requested permission to file the Claim, on the Company’s behalf, against each of the Company’s five directors, as well as the Company’s chief executive officer (the “CEO”), Mr. Guy Bernstein, and chief financial officer, Mr. Asaf Berenstin (the “CFO”), as defendants. The Company and the named defendants are all listed as respondents to the Motion to Certify. The Claim challenges the legality, under the Israeli Companies Law, 5759-1999 (the “Companies Law”), of compensation awarded to the Company’s CEO and CFO, including past engagements with the CEO and the recent re-approval by the Company’s compensation committee and board of directors (as reported in the Company’s Report of Foreign Private Issuer on Form 6-K furnished to the Securities and Exchange Commission on November 4, 2020), of the eight-year equity-based award of compensation—in the form of 611,771 restricted share units— to the Company’s CEO. The Claim includes allegations of breaches of fiduciary duties (duty of care and duty of loyalty) and the oppression of minority shareholders and unjust enrichment. The Claim seeks an accounting from the defendants as to the alleged harm caused to the Company, as well as compensation to the Company for such harm. The Claim also seeks a declaratory order preventing the board of directors from using voting powers allegedly granted to it under agreements related to the Company’s ADSs. The Company rejects all claims made by Olir and believe that all actions taken by its board of directors and its committees were taken in accordance with the Companies Law and based upon advice of legal counsel. All respondents intend to vigorously defend against the Motion to Certify and on May 13, 2021 all respondents filed their responses to the Motion to Certify. On January 24, 2023, the Company submitted a request for dismissal in limine of the motion to certify due to a change in the factual grounds of the motion including, among other things, the reapproval of the compensation given to the CEO by a new and independent board of directors made on January 15, 2023. The court asked the other parties to respond to the request for dismissal by March 1,2023. A cross examinations hearing was held on January 31, 2023. On March 1, 2023, the other respondents to the motion to certify submitted their responses to the request for dismissal in which they supported the request. On March 8, 2023, Olir filed its objection to the dismissal in limine. On April 13,2023 the Company submitted its response to Olir’s response. On September 18, 2023 Olir filed its briefs. On December 3, 2023, the Company filed a motion to render a decision in the motion to dismiss in limine. On December 5, 2023 the court granted the Company with a motion to dismiss in limine, and ordered the Company to pay Olir’s costs in the amount of NIS 45 thousand. On January 25, 2024 Olir filed and appeal against the District Court’s decision, with the Supreme Court. Olir failed to attach to its appeal the pleadings regarding the motion to dismiss. On March 26, 2024 the Company and all other respondents notified the Supreme Court that they believe that Olir acted in bad faith and contrary to the rules of law, when it did not attach essential documents to the notice of appeal and drafted a misleading notice of appeal. The respondents argued that those actions had real implications on the pre-appeal hearing, as the court lacked the respondents’ position and claims. Therefore, the respondents requested that their position be heard at a bench hearing of the court. A bench hearing is now scheduled for February 5, 2025. The respondents are required to file their response to Olir’s appeal by June 10, 2024. At this stage of the proceedings, we believe that the chances for the approval of Olir’s Motion to Certify are low. 2) On December 24, 2019, a motion for the approval of a class action (#60508-02-20), in an amount of NIS 793,800 thousands (approximately $225,600), was filed against our subsidiary Zap Group with the Israeli district court (central district), claiming that Zap Group had allegedly generated income illegally from paying customers through the ‘ZAP’s price comparison’ website. At the pre-trial hearing, it was decided that the plaintiffs would file an explanation to the court as to why they believed they were fit to serve as class action plaintiffs and why they had performed prohibited clicks on their competitor’s websites through Zap Group’s website. In addition, the plaintiffs were requested to update whether they were willing to reduce the amount of the claim. On July 15, 2021, the plaintiffs filed a motion to reduce the amount of the claim to NIS 63,000 thousands (approximately $17,900). On December 15, 2021, a pre-trial hearing took place, in which the court clarified that it does not intend to interfere with Zap Group’s business considerations regarding the click filtering mechanisms that it operates. The court recommended that the plaintiffs reach an agreed solution with Zap Group on the issue of the necessary disclosure that Zap Group should include in its contracts with customers (as available on its website). The parties were requested to file a joint notice in accordance with the court’s recommendation by January 15, 2022. The plaintiffs submitted a request for an extension to file the notice. On April 5, 2022, the plaintiffs filed a notice 3) On December 30, 2021, Ronen Har Even, Galit Har Even and TV Center Ltd. (the “Plaintiffs”) submitted a monetary claim in the sum of NIS 24,500 thousands (approximately $7,000) and a claim for the grant of a mandamus order against Zap Group, in the District Court at Haifa. The Plaintiffs allege that Zap Group constitutes a monopoly in the provision of price comparison services in the online arena in Israel, and excluded the Plaintiffs’ business from the E-commerce arena in Israel. According to the Plaintiffs, Zap Group prevented price comparisons between the prices of the Plaintiffs’ televisions and the prices of the televisions of the official importers, by causing systemic manipulations aimed at excluding the television models sold by the Plaintiffs and blurring the fact that they are cheaper in the search results. As mentioned in the Statement of Claim, concurrent with submission of the Claim, on April 19, 2021, the Plaintiffs submitted a complaint against Zap Group to the Israel Competition Authority, and on August 18, 2021 and October 21, 2021, submitted supplements to the aforesaid complaint. On June 1, 2022, Zap Group submitted a statement of defense, denying the Plaintiffs’ allegations and in particular the Plaintiffs’ argument that Zap Group has a monopoly in the provision of price comparison services in the online arena in Israel. On July 19, 2022, a pre-trial hearing took place, at the end of which it was held that the Parties must conclude the discovery proceedings by September 10, 2022, and that should any of the Parties wish to submit a motion following receipt of the answers, they must do so by November 15, 2022. On November 15, 2022 the Plaintiffs submitted a motion for the grant of an order of discovery of documents and answer to interrogatories. On December 20, 2022, Zap Group submitted its response to the motion, in which it rejected all of the Plaintiffs’ demands. The Plaintiffs provided Zap Group with the documents that had been disclosed by them in the case, without a suitable legend. On January 3, 2023, Zap Group submitted a motion to obligate the Plaintiff’s to deposit a bond to cover Zap Group’s expense in the event the claim was dismissed. On January 13, 2023, the Plaintiffs submitted a response to the motion. On January 16, 2023, a pre-trial hearing took place, in which Zap Group insisted on the receipt of a suitable legend for the documents that had been disclosed to it by the Plaintiffs. The Court held that the Plaintiffs would deliver a suitable legend within 45 days, after which Zap Group would be entitled to submit a suitable motion in this regard within 30 days, should the need to do so arise. On March 5, 2023, the Plaintiffs submitted a new document file in the context of the discovery proceedings, and an updated legend that was almost identical to the previous one. For that reason, on April 3, 2023, Zap Group submitted a motion petitioning the Court to dismiss the Statement of Claim due to breach of the Court’s decision to provide the discovery materials in a proper manner or, alternatively, to issue an order mandating the Plaintiffs provide a suitable legend, per the Court’s prior decision. On July 19, 2023, the Court instructed the Plaintiffs to submit updated disclosure documents with a suitable legend and organized as requested by the Court. The Court also charged the Plaintiffs with expenses in an amount of NIS 10,000 in connection with this motion. On September 20, 2023, the Plaintiffs submitted updated disclosure documents that did not meet the Court’s instructions. As a result, on October 30, 2023 Zap Group submitted an additional motion to dismiss as a result of ignoring the Court’s order on the matter. On November 28, 2023, the Plaintiffs submitted their response to the motion, resulting in the Court allowing Zap Group to raise claims regarding this matter in the next hearing. On March 5, 2024 the Court rejected the Plaintiffs’ motion petitioning the Court to order additional discovery as well as most of the Plaintiffs’ motion requesting the Court order Zap Group to provide answers to certain questions. Zap Group provided the Plaintiffs with answers to the remaining questions on April 2, 2024. The Plaintiffs must submit affidavits of primary testimony by June 3, 2024 and Zap Group must submit affidavits of primary testimony 90 days afterward. In light of the early stage of the proceedings, it is not possible to estimate the likelihood of success of the lawsuit. 4) In November 2023, “Safra”, a subsidiary of Zap Group, was added as defendant to a lawsuit filed by the estate of the deceased Klil Kimchi, who died in an accident in a swimming pool in a private house during a social event organized by Safra and another company. The deceased was invited as a guest of the other company. The total claim is NIS 9,645 thousands. The other company has filed a third-party notice against Safra. As of May 7, 2024, Safra submitted a statement of defense as well as a third-party notice on its behalf, and no statements of defense have yet been submitted to the third-party notice submitted by the company. The lawsuit is at a very early stage and preliminary proceedings are currently taking place between the parties and in light of the early stage, it is not possible to estimate the likelihood of success of the lawsuit. The subject incident (in which the deceased died) took place before Zap Group acquired Safra; therefore, any potential liability of Zap Group resulting from the proceedings is covered by the indemnification obligations of the former shareholders of Safra to Formula. 5) On December 3, 2023, our subsidiary Matrix received a request for disclosure of materials pursuant to Section 198a of the Companies Law, which was submitted to the District Court (Economic Division) of Tel Aviv-Jaffa by an individual who claimed to be a shareholder of Matrix. The request related to a potential derivative claim that could be filed by the individual, on Matrix’s behalf, against Matrix’s chief executive officer and each of its directors related to the procedure for the approval of compensation awarded to Matrix’s chief executive officer following the rejection of such compensation by Matrix’s general meeting of shareholders and the re-approval of that compensation by Matrix’s compensation committee and board of directors, respectively, acting in accordance with the Companies Law. Matrix filed a response to the disclosure request in which Matrix requested that the court deny, on various grounds, the request made by the potential plaintiff. At this early stage of this legal proceeding we cannot predict its outcome. 6) In addition to the above-described legal proceedings, from time to time, Formula and/or its subsidiaries and affiliates are subject to legal, administrative and regulatory proceedings, claims, demands and investigations in the ordinary course of business, including claims with respect to intellectual property, contracts, employment and other matters. The Group accrues a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in the determination of both the probability and as to whether a loss is reasonably estimable. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. The Group intends to defend itself vigorously against the above claims, and it generally intends to vigorously defend any other legal claims to which it is subject. While for most litigations, the outcome is difficult to determine, to the extent that there is a reasonable possibility that the losses to which the Group may be subject could exceed the amounts (if any) that it has already accrued, the Group attempts to estimate such additional loss, if reasonably possible, and disclose it (or, if it is an immaterial amount, indicate accordingly). The aggregate provision that the Group has recorded for all other legal proceedings (other than the particular material proceedings described above) is not material. e) Royalty commitments: Sapiens Technologies (1982) Ltd. (“Sapiens Technologies”), a wholly owned subsidiary of Sapiens incorporated in Israel, was partially financed under programs sponsored by the IIA, formerly the Office of the Chief Scientist (“OCS”) for the support of certain research and development activities conducted in Israel. In exchange for participation in the programs by the IIA, Sapiens Technologies agreed to pay 3.5% of total net consolidated license and maintenance revenue and 0.35% of the net consolidated consulting services revenue related to the software developed within the framework of these programs based on an understanding with IIA reached in January 2012. The royalties will be paid up to a maximum amount equaling 100%-150% of the grants provided by the IIA, linked to the dollar, and for grants received after January 1, 1999, bear annual interest at a rate based on LIBOR. As of December 31, 2023, the total remaining unpaid royalties to the IIA amounted to $5,021, out of which, an amount of $2,098 was recorded as a liability in accordance with IAS 20. f) Insurance: The Company and its subsidiaries and affiliates insure themselves in bodily injury and property damage insurance policies, including third party, professional liability and employer’s liability insurance policies. Formula, Sapiens, Magic Software, Zap Group, Insync, Michpal, Shamrad and Ofek directors and officers (D&O) are insured under an “umbrella” policy for insurance of directors and officers including D&O side A DIC policy (another layer of protection for officers) acquired by the Company for itself and its subsidiaries, for a period of 12 months from February 14, 2023. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
EQUITY | Note 22:- equity The composition of the Company’s share capital is as follows: December 31, 2023 December 31, 2022 Authorized Issued Outstanding Authorized Issued Outstanding Ordinary shares, NIS 1 par value each 25,000,000 15,901,287 15,332,667 25,000,000 15,886,287 15,317,667 a. Formula’s ordinary shares, par value NIS 1 per share, are traded on the TASE, and Formula’s ADSs, each representing one ordinary share, are traded on the NASDAQ. b. Formula holds 568,620 of its own ordinary shares. c. In February 2021, Formula declared a cash dividend of approximately NIS 33,036 thousand (approximately $10,155) or NIS 2.16 per share (approximately $0.66 per share) to shareholders of record on February 18, 2021 that was paid on March 4, 2021. d. In August 2021, Formula declared a cash dividend of approximately NIS 38,694 thousand (approximately $11,932) or NIS 2.53 per share (approximately $0.78 per share) to shareholders of record on September 1, 2021 that was paid on September 19, 2021. e. In March 2022, Formula declared a cash dividend of approximately NIS 39,213 thousand (approximately $12,018) or NIS 2.56 per share (approximately $0.78 per share) to shareholders of record on April 12, 2022 that was paid on April 25, 2022. f. In November 2022, Formula declared a cash dividend of approximately NIS 33,086 thousand (approximately $9,571) or NIS 2.16 per share (approximately $0.62 per share) to shareholders of record on December 5, 2022 that was paid on December 19, 2022. g. In May 2023, Formula declared a cash dividend of approximately NIS 35,265 thousand (approximately $9,605) or NIS 2.3 per share (approximately $0.63 per share) to shareholders of record on June 5, 2023 that was paid on June 22, 2023. h. For information concerning Formula’s employees and officers share-based plans, see Note 19. i. See Note 26 about subsequent events. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax [Abstract] | |
INCOME TAX | Note 23:- INCOME TAX a. Israeli taxation: 1) Corporate tax rate in Israel Taxable income of Israeli companies was generally subject to corporate tax at the rate of 23% in 2023, 2022. Some of our Israeli subsidiaries are eligible for certain tax benefits, as described below. 2) Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (the “Law”): Amendment 73 to the Law: In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years) 2016, which includes Amendment 73 to the Law for the Encouragement of Capital Investments (the “2017 Amendment”) was published and was pending the publication of regulations, in May 2017 regulations were promulgated by the Finance Ministry to implement the “Nexus Principles” based on OECD guidelines published as part of the Base Erosion and Profit Shifting (BEPS) project. Following the publication of the regulations the 2017 Amendment became fully effective. According to the 2017 Amendment, a Preferred Technological Enterprise, as defined in the 2017 Amendment, with total consolidated revenues of the group companies is less than NIS 10 billion, shall be subject to 12% tax rate on income derived from intellectual property (in development area A—a tax rate of 7.5%). In order to qualify as a Preferred technological enterprise certain criterion must be met, such as a minimum ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual revenues derived from exports. A Preferred Technology Enterprise that acquires Benefited Intangible Assets from a foreign company for more than NIS 200 million after January 1, 2017, will be eligible for 12% reduce tax rate on capital gain upon sale of the Benefited Intangible Assets. The 2017 Amendment further provides that a technology company satisfying certain conditions will qualify as a Special Preferred Technology Enterprise (“SPTE”) (an enterprise for which, among others, total consolidated revenues of its parent company and all subsidiaries is at least NIS 10 billion) and will thereby enjoy a reduced corporate tax rate of 6% on PTI regardless of the company’s geographic location within Israel. In addition, a SPTE will enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain “Benefited Intangible Assets” to a related foreign company if the Benefited Intangible Assets were either developed by the Special Preferred Technology Enterprise or acquired from a foreign company on or after January 1, 2017. Starting from 2017 under Amendment 73 to the Investment Law, part of the Group’s taxable income in Israel is entitled to a preferred 12% tax rate. Since 2019, under SPTE the tax rate for part of the Group’s taxable income in Israel has been reduced to a 6% corporate tax rate. Amendment 74 to the Encouragement Law: On November 15, 2021, the Economic Efficiency Law (Legislative Amendments for Achieving Budget Targets for the 2021 and 2022 Budget Years), 2021 (the “Economic Efficiency Law”), was enacted. This Law establishes a temporary order allowing Israeli companies to release tax-exempt earnings (“trapped earnings” or “accumulated earnings”) accumulated until December 31, 2020, through a mechanism established for a reduced corporate income tax rate applicable to those earnings (the “Temporary Order”) . In addition to the reduced corporate income tax (CIT) rate, Article 74 to the Encouragement Law was amended whereby effective from August 15, 2021, for any dividend distribution (including a dividend as per Article 51B to the Encouragement Law) by a company which has trapped earnings, there will be a requirement to allocate a portion of that distribution to the trapped earnings . . . According to IAS 12, a deferred tax liability would generally be recorded relating to corporate taxes that would be owed on the distribution of profits if management has currently the intention to declare dividends of its tax-exempt earnings . In 2021, Sapiens elected to benefit from the Temporary Order and pay the reduced CIT as per the provisions of the Economic Efficiency Law in respect of its total accumulated tax-exempt earnings amounting to NIS 109,000 thousand (approximately $35,048), and accordingly recognized deferred tax liability of $3,531, which was subsequently realized upon the actual filing of the application in 2022 and the payment of related taxes. In November 2022, Magic Software also elected to benefit from the Temporary Order and filed its application for the Temporary Order and paid the required reduced CIT as per the provisions of the Economic Efficiency Law in respect of its total accumulated tax-exempt earnings amounting to NIS 25,022 thousand (approximately $7,100), and accordingly recognized a tax liability of NIS 2,502 thousand (approximately $711). As a result, as of December 31, 2022 all of Sapiens’ and Magic Software’s trapped earnings were released. 3) Tax benefits under the Israeli Law for the Encouragement of Industry (Taxes), 1969 It is Formula’s management’s belief that certain of its Israeli operations currently qualify as Industrial Companies within the meaning of the Law for the Encouragement of Industry (Taxes), 5729-1969 (the “Industrial Encouragement Law”). The Industrial Encouragement Law, provides several tax benefits for an “Industrial Company”. Pursuant to the Industry Encouragement Law, a company qualifies as an Industrial Company if it is an Israeli resident company which was incorporated in Israel and at least 90% of its income in any tax year (other than income from certain government loans) is generated from an “Industrial Enterprise” that it owns and located in Israel or in the “Area,” in accordance with the definition under Section 3A of the Israeli Income Tax Ordinance (New Version) 1961, or the Ordinance. An “Industrial Enterprise” is defined as an enterprise which is held by an Industrial Company whose major activity, in any given tax year, is industrial production. An Industrial Company is entitled to certain corporate tax benefits, including: i. Amortization of the cost of purchased patents, or the right to use a patent or know-how or certain other intangible property rights (other than goodwill) that were purchased in good faith and are used for the development or promotion of the Industrial Enterprise, over an eight-year period commencing on the year in which such rights were first exercised. ii. The right to elect, under certain conditions, to file a consolidated tax return together with Israeli Industrial Companies controlled by it. iii. Expenses related to a public offering are deductible in equal amounts over three years beginning from the year of the offering. Eligibility for the benefits under the Industrial Encouragement Law is not subject to receipt of prior approval from any governmental authority . 4) Foreign Exchange Regulations Under the Foreign Exchange Regulations, certain Israeli subsidiaries of the Group calculate their tax liability in dollars according to certain orders. The tax liability, as calculated in dollars is translated into NIS according to the exchange rate as of December 31 of each year for tax purposes only. 5) Structural changes in Matrix IT and Zap Group During the fourth quarter of 2022, Matrix IT made a structural change with respect to its holdings in some of its U.S. based subsidiaries. Prior to the structural change, Matrix IT held, indirectly through subsidiaries, all of the share interest in Matrix IFS and Network Infrastructure Technologies Inc. and 60% of the share interest in Matrix Global Services USA Inc. Post the structural change, which was completed without payment of cash, Matrix IT interest in such U.S. subsidiaries is held through Matrix US Holding LLC.(established for this purpose), with Matrix IT holding 95% of the share interest of Matrix US Holding LLC. In May 2022, a tax ruling was signed determining that as part of a merger process, one subsidiary of Zap Group will transfer all their assets and liabilities subject to the provisions of section 103 of the Income Tax Ordinance. b. Non-Israeli subsidiaries: Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. Deferred income taxes were provided in relation to undistributed earnings of non-Israeli subsidiaries, which the Group intends to distribute in the near future. The Group intends to permanently reinvest undistributed earnings in the foreign subsidiaries in which earnings arose, in the vast majority of its subsidiaries. If the earnings, for which deferred taxes were not provided, were distributed in the form of dividends or otherwise, the Group would be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and non-Israeli withholding taxes. The amount of undistributed earnings of foreign subsidiaries that are considered to be reinvested as of December 31, 2023 and 2022 was $218,328 and $185,636, respectively. However, a determination of the amount of the unrecognized deferred tax liability for temporary difference related to those undistributed earnings of foreign subsidiaries is not practicable due to the complexity of the structure of our group of subsidiaries for tax purposes and the difficulty of projecting the amount of future tax liability. The amount of cash and cash equivalents that were held by the Group’s subsidiaries outside of Israel and would have been subject to income taxes if distributed as dividend as of December 31, 2023 and 2022 was $84,373 and $81,756, respectively. c. Tax Reform - United States of America The U.S. Tax Cuts and Jobs Act of 2017 (“TCJA”) was approved on December 22, 2017. This legislation makes significant changes to the U.S. Internal Revenue Code. Such changes include a reduction in the corporate tax rate and limitations on certain corporate deductions and credits, among other changes. The TCJA reduces the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. In addition, the TCJA makes certain changes to the depreciation rules and implements new limits on the deductibility of certain expenses and deduction. The TCJA introduced the rules for tax on the global intangible low-taxed income (“GILTI”) on foreign income in excess of a deemed return on tangible assets of foreign corporations. One of our subsidiaries is subject to GILTI. Except for one U.S. subsidiary which has a share interest in a subsidiary in India and one U.S. subsidiary which have a share interest in several subsidiaries in Europe, all of the Group’s other subsidiaries in the United States do not have any foreign subsidiaries and, therefore, the remaining provisions of the TCJA have no material impact on the Group’s results of operations. Starting from 2022, the TCJA requires taxpayers to capitalize research and development expenses with amortization periods over five years for research activities conducted in the United States and over fifteen years for research activities conducted outside of the United States, which has increased the Group’s tax liability in the U.S. The tax provision expense has increased from prior year to account for the capitalization of research and development costs in 2022 and 2023. d. Net operating loss carried forward: As of December 31, 2023, Formula and its subsidiaries have cumulative losses for tax purposes totaling approximately $164,842, of which $114,977 was in respect of Israeli subsidiaries and approximately $49,865 of which was in respect of subsidiaries abroad. 1) Formula As of December 31, 2023, Formula stand-alone had cumulative carry forward tax losses in Israel totaling approximately NIS 258,535 thousand (approximately $71,280), which can be carried forward and offset against taxable income in the future for an indefinite period. 2) Matrix IT As of December 31, 2023, certain subsidiaries of Matrix IT had operating carry-forward tax losses totaling approximately NIS 44,655 thousand (approximately $12,312), which resulted from Israeli operations and as such can be carried forward and offset against taxable income in the future for an indefinite period. 3) Magic Software As of December 31, 2023, certain subsidiaries of Magic Software had operating carry forward tax losses totaling approximately $27,456, which can be carried forward and offset against taxable income in the future for an indefinite period. 4) Sapiens As of December 31, 2023, certain subsidiaries of Sapiens had carry-forward tax losses totaling approximately $37,947. Most of these carry-forward tax losses have no expiration date. 5) Zap As of December 31, 2023, Zap and certain of its subsidiaries had carry-forward tax losses totaling approximately NIS 26,422 thousand (approximately $7,285). These carry-forward tax losses have no expiration date. 6) Michpal As of December 31, 2023, one subsidiary of Michpal had carry-forward tax losses totaling approximately $547 which have no expiration date. 7) As of December 31, 2023 Insync, Ofek and Shamrad did not have any carry forward tax losses. e. Income tax assessments: Formula and its subsidiaries are routinely examined by various tax authorities. Below is a summary of the income tax assessments of Formula and its subsidiaries: 1) Formula Formula has received final tax assessments (or assessments that are deemed final) through the tax year 2018. 2) Matrix IT Matrix IT and part of its Israeli subsidiaries have received final tax assessments through the year 2018 (or assessments that are deemed final). 3) Magic Software Magic Software and part of its Israeli subsidiaries have received final tax assessments through the year 2018. 4) Sapiens Sapiens and part of its Israeli subsidiaries have received final tax assessments through the year 2018 (or assessments that are deemed final). 5) Zap Group Zap Group and its subsidiaries have received final tax assessments (or assessments that are deemed final) through the tax year 2020. 6) Other than those aforementioned subsidiaries, all other Formula’s subsidiaries have received final tax assessments (or assessments that are deemed final) through the tax year 2018. f. Deferred tax liabilities, net: 1) Presentation in consolidated statements of financial position December 31, 2023 2022 Deferred taxes assets $ 46,856 $ 42,027 Deferred tax liabilities (59,206 ) (59,465 ) $ (12,350 ) $ (17,438 ) 2) Composition December 31, 2023 2022 Net operating losses carried forward $ 13,744 $ 10,296 Intangibles, fixed asset and right-of-use assets (36,021 ) (39,307 ) Lease liability 767 (166 ) Differences in measurement basis (cash basis for tax purposes) 377 2,213 Other 8,783 9,526 $ (12,350 ) $ (17,438 ) g. Pre-tax income: Year ended December 31, 2023 2022 2021 Domestic (Israel) $ 126,360 $ 181,953 $ 137,213 Foreign 84,674 47,757 46,798 Total $ 211,034 $ 256,710 $ 184,011 h. Income tax (tax benefit) consist of the following: Year ended December 31, 2023 2022 2021 Current taxes $ 54,743 $ 75,407 $ 52,956 Deferred taxes (8,668 ) (20,172 ) (10,342 ) Total $ 46,075 $ 55,235 $ 42,614 i. Theoretical tax: The following table presents reconciliation between the theoretical tax expense, assuming that all income was taxed at statutory tax rates, and the actual income tax expense, as recorded in the Group’s consolidated statements of profit or loss: Year ended December 31, 2023 2022 2021 Income before income taxes, as per the statement of operations $ 211,034 $ 256,710 $ 184,011 Statutory tax rate in Israel 23 % 23 % 23 % Tax computed at the statutory tax rate 48,538 59,043 42,323 Non-deductible expenses (non-taxable income) net and tax-deductible costs not included in the accounting costs 3,705 720 3,667 Effect of different tax rates (874 ) (1,273 ) 852 Release of trapped earnings (see Note 23(a)(2) - 711 3,531 Effect of “Approved, Beneficiary or Preferred Enterprise” status (1,907 ) (5,579 ) (7,338 ) Deferred taxes on current losses (utilization of carry forward losses) and temporary differences for which a valuation allowance was provided, net (2,070 ) 448 (84 ) Undistributed earnings (260 ) (461 ) - Taxes in respect of prior years 558 890 891 Uncertain tax positions (2,293 ) 3,065 401 Other 678 (2,329 ) (1,629 ) Taxes on income $ 46,075 $ 55,235 $ 42,614 j. Uncertain tax positions: A reconciliation of the beginning and ending amount of total unrecognized tax benefits in Formula’s subsidiaries is as follows: Balance as of January 1, 2022 $ 10,540 Decrease in tax positions (1,042 ) Increase in tax positions 4,455 Statue limitation (1,012 ) Balance as of December 31, 2022 $ 12,941 Decrease in tax positions (1,556 ) Increase in tax positions 1,573 Statue limitation (2,115 ) Balance as of December 31, 2023 $ 10,843 Although the Group believes that it has adequately provided for any reasonably foreseeable outcomes related to tax audits and settlement, there is no assurance that the final tax outcome of its tax audits will not be different from that which is reflected in the Group’s income tax provisions. Such differences could have a material effect on the Group’s income tax provision, cash flow from operating activities and net income in the period in which such determination is made. The entire balance of unrecognized tax benefits, if recognized, would reduce the Group’s annual effective tax rate. |
Supplementary Financial Stateme
Supplementary Financial Statement Information | 12 Months Ended |
Dec. 31, 2023 | |
Supplementary Financial Statement Information [Abstract] | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | Note 24:- Supplementary Financial Statement Information a. Composition of non-controlling interest in material partially - December 31, 2023 2022 Matrix IT and its subsidiaries $ 176,092 $ 155,886 Sapiens and its subsidiaries 341,124 316,319 Magic Software and its subsidiaries 162,395 151,253 Other 2,812 1,291 $ 682,423 $ 625,049 b.(1) Revenue by products and services was as follows: Year ended 2023 2022 2021 Proprietary software and related services $ 693,426 $ 659,470 $ 632,986 Other products and third party 503,327 494,344 472,045 Services 1,424,150 1,418,543 1,299,345 $ 2,620,903 $ 2,572,357 $ 2,404,376 b.(2) Revenue by timing of revenue recognition was as follows: Year ended 2023 2022 2021 Products and services transferred over time $ 2,246,470 $ 2,251,416 $ 2,072,841 Products transferred at a point in time 374,433 320,941 331,535 $ 2,620,903 $ 2,572,357 $ 2,404,376 c. Selling, marketing, general and administrative expenses: Year ended December 31, 2023 2022 2021 Wages and related expenses $ 223,351 $ 214,118 $ 200,435 Depreciation and amortization 51,632 49,556 46,479 Subcontractors 11,271 11,701 10,746 Advertising 16,959 19,412 15,598 Maintenance and other expenses 23,162 23,169 16,727 Total Selling, marketing, general and $ 326,375 $ 317,956 $ 289,985 d. The following table provides detailed breakdown of the Group’s financial income and expenses: Year ended December 31, 2023 2022 2021 Financial expenses: Financial expenses related to liabilities in respect of business combinations $ 775 $ 1,081 $ 3,539 Interest expenses on loans and borrowings 18,540 9,837 6,249 Financial costs related to Debentures 3,928 3,775 6,948 Interest expenses attributed to IFRS 16 7,195 4,822 4,873 Derivatives loss 2,991 1,193 - Bank charges, negative foreign exchange differences and other financial expenses 8,705 6,508 8,385 $ 42,134 $ 27,216 $ 29,994 Year ended December 31, 2023 2022 2021 Financial income: Income from marketable securities and embedded derivative $ - $ - $ 3,338 PPP loan forgiveness - 1,465 - Interest income from deposits, positive foreign exchange differences and other financial income 13,800 5,821 2,651 13,800 7,286 5,989 Financial expenses, net $ 28,334 $ 19,930 $ 24,005 e. Geographical information: 1) The Group’s property and equipment is located as follows: December 31, 2023 2022 Israel $ 44,145 $ 45,994 United States 4,369 3,563 Europe 1,102 1,834 Japan 144 153 Other 3,171 3,427 Total $ 52,931 $ 54,971 2) Revenues: The Group’s revenues classified by geographic area (based on the location of customers) are as follows: Year ended December 31, 2023 2022 2021 Israel $ 1,600,763 $ 1,571,035 $ 1,506,566 International: United States 644,918 680,325 591,794 Europe 315,081 262,303 255,680 Africa 26,035 26,692 18,012 Japan 11,881 11,333 12,890 Other (mainly Asia pacific) 22,225 20,669 19,434 Total $ 2,620,903 $ 2,572,357 $ 2,404,376 See Note 2(10) regarding the transaction prices allocated to performance. f. Earnings per share: The following table presents the computation of basic and diluted net earnings per share for the Group: Year ended December 31, 2023 2022 2021 Numerator Basic earnings per share – net income attributable to equity holders of the Company $ 64,014 $ 81,393 $ 54,585 Diluted earnings per share – net income attributable to equity holders of the Company $ 63,878 $ 80,794 $ 53,974 Denominator: Basic earnings per share – weighted average shares outstanding 15,301 15,296 15,290 Effect of dilutive securities 197 207 114 Diluted earnings per share – adjusted weighted average shares outstanding 15,498 15,503 15,404 Basic net earnings per share 4.19 5.31 3.57 Diluted net earnings per share 4.12 5.21 3.50 |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2023 | |
Operating Segments [Abstract] | |
OPERATING SEGMENTS | Note 25: - operating segments a. General: The Group is engaged through eight directly held subsidiaries— Matrix IT; Sapiens; Magic Software; Michpal, Zap, Insync, Ofek and Shamrad; and one jointly controlled entity: TSG— in providing software services, proprietary and non-proprietary software solutions, software product marketing and support, computer infrastructure and integration solutions and training and integration. Matrix IT Matrix IT Ltd. is Israel’s leading IT services company. Matrix IT provides software solutions and services, software development projects, outsourcing, integration of software systems and services, project management services and comprehensive consulting and management services in complex infrastructure projects, urban and environment planning – all in accordance with its customers’ specific needs. Matrix IT also provides upgrading and expansion of existing software systems. Matrix IT operates through its directly and indirectly held subsidiaries in the following segments: (1) Information Technology (IT) Software solutions and services, Consulting & Management in Israel; (2) Information Technologies (IT) Software solutions and services in the U.S.; (3) Training and integration; (4) Computer and cloud infrastructure and integration solutions; and (5) Software product marketing and support. Information Technologies (IT) Software solutions and services, Consulting & Management in Israel: The software solutions and services in Israel provided by Matrix IT consist mainly of providing tailored software solutions and upgrading and expanding mainly existing large-scale software systems. These services include, among others, developing customized software, adapting software to the customer’s specific needs, implementing software and modifying it based on the customer’s needs, outsourcing, software project management, software testing and QA Information Technologies (IT) Software solutions and services in the United States: Matrix IT’s activities in this segment are performed by two lines of business – Matrix US Holdings and Xtivia. The two line of business primarily Training and integration: Matrix IT’s activities in this segment consist of operating a network of high-tech training and instruction centers which provide application courses, professional training courses and advanced professional studies in the high-tech industry, courses of soft skills and management training and provision of training and implementation of computer systems. Matrix IT also outsources IT services based on graduates of its courses. In 2023, activity in training and integration accounted for approximately 3% of Matrix IT’s revenues and for approximately 3% of its operating income. Computer and cloud infrastructure and integration solutions: Matrix IT’s activities in this segment, is primarily providing computer solutions to computer and communications infrastructures, marketing and sale of computers and peripheral equipment to business customers, providing related services, and cloud computing solutions ( Software product marketing and support: Matrix IT’s activities in this segment include marketing, distributing and support for various software products, web world content management, database and data warehouse mining, application integration, database and systems, data management and software development tools. In 2023, activity in software product marketing and support accounted for approximately 6% of Matrix IT’s revenues and approximately 9% of its operating income. Sapiens Sapiens is a leading global provider of software solutions for the insurance industry. Sapiens’ extensive expertise is reflected in its innovative software, solutions and professional services for property & casualty (P&C); reinsurance; life, pension & annuity (L&A); workers’ compensation (WC); medical professional liability (MPL); financial & compliance (F&C); and decision modelling for both insurance and financial markets. Sapiens offers an end-to-end solutions for insurers core systems, as well as complementary data & analytics and digital. Importantly its wide array of professional services ensures that Sapiens not only makes a sale but accompanies and guides its customers on their path to digital transformation and bring important insights from the field into its products roadmap. Sapiens’ offerings not only enable its customers to effectively manage their core business functions – including policy administration, claims and billing – they support insurers on their path to digital transformation. Its portfolio also provides a variety of complimentary solutions for critical requirements such as reinsurance management, underwriting management, illustration software, electronic applications and financial compliance tools. The latest versions of its platforms possess modern, modular cloud-first architecture and are digital-driven, providing full coverage for all business aspects of policy management, digital engagement and data analysis. They empower customers to respond to the rapidly changing insurance market and frequent regulatory changes, while improving the efficiency of their core operations. Magic Software Magic Software is a global provider of: (i) software services and Information Technologies (“IT”) outsourcing software services; (ii) proprietary application development and business process integration platforms; (iii) selected packaged vertical software solutions; as well as (iv) cloud based services for end to end digital transformation. Magic Software’s technology is used by customers to develop, deploy and integrate on-premise, mobile and cloud-based business applications quickly and cost effectively. In addition, Magic Software’s technology enables enterprises to accelerate the process of delivering business solutions that meet current and future needs and allow customers to dramatically improve their business performance and return on investment. With respect to software services and IT outsourcing services, Magic Software offers a vast portfolio of professional services in the areas of infrastructure design and delivery, application development, technology consulting planning and implementation services, integration projects, project management, software testing and quality assurance, engineering consulting (including supervision of engineering projects), support services, cloud computing for deployment of highly available and massively-scalable applications and API’s and supplemental outsourcing services, all according to the specific needs of the customer, and in accordance with the professional expertise required in each case. In addition, Magic Software offers a variety of proprietary comprehensive packaged software solutions through certain of its subsidiaries for (i) enterprise-wide and fully integrated medical platform (“Clicks”), specializing in the design and management of patient-file oriented software solutions for managed care and large-scale health care providers. This platform aims to allow providers to securely access an individual’s electronic health record at the point of care, and it organizes and proactively delivers information with potentially real time feedback to meet the specific needs of physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals and consumers; (ii) enterprise management systems for both hubs and traditional air cargo ground handling operations from physical handling and cargo documentation through customs, seamless electronic data interchange, or EDI communications, dangerous goods, special handling, track and trace, security to billing (“Hermes”); (iii) enterprise human capital management, or HCM, solutions, to facilitate the collection, analysis and interpretation of quality data about people, their jobs and their performance, to enhance HCM decision making (“HR Pulse”); (iv) revenue management and monetization solutions in mobile, wireline, broadband and mobile virtual network operator/enabler, or MVNO/E (“Leap”); (v) comprehensive systems for managing broadcast channels in the area of TV broadcast management through cloud-based on-demand service or on-premise solutions; (vi) comprehensive solution for sales and distribution field activities, such as order taking, route accounting, trade marketing, retail execution, proof of deliveries and B2B E-commerce (“Mobisale”); and (vii) comprehensive solution for efficient management of all types of rehabilitation centers (“Nativ”). Magic Software solutions are used by customers to develop, deploy and integrate on-premise, mobile and cloud-based business applications quickly and cost effectively. In addition, its technology enables enterprises to accelerate the process of delivering business solutions that meet current and future needs and allow customers to dramatically improve their business performance and return on investment. Its software solutions include application platforms for developing and deploying specialized and high-end large-scale business applications (Magic xpa application platform, formerly branded uniPaaS, Appbuilder and Magic SmartUX), an integration platform that allows the integration and interoperability of diverse solutions, applications and systems in a quick and efficient manner (Magic xpi business and process integration platform, formerly branded iBOLT), Magic BusinessEye – a cloud-based platform for all verticals enabling smooth end-to-end digital transformation and full organizational business intelligence and FactoryEye - a proprietary high performance, low-code, flexible, hybrid platform for manufacturers based on existing infrastructure enabling real-time virtualizations of all production data and advanced analytics (based on machine learning) for improved productivity and competitive advantage. These solutions enable Magic Software customers to improve their business performance and return on investment by supporting the affordable and rapid delivery and integration of business applications, systems and databases. Magic Software products and services are available through a global network of regional offices, independent software vendors, system integrators, distributors and value-added resellers as well as original equipment manufacturers and consulting partners in approximately 50 countries. Insync InSync is a U.S. based national supplier of employees to Vendor Management Systems (VMS) Workforce Management Program accounts. Insync specializes in providing professionals in the following areas; Accounting and Finance, Administrative, Customer Service, Clinical, Scientific and Healthcare, Engineering, Manufacturing and Operations, Human Resources, IT Technology, LI/MFG, and Marketing and Sales. InSync currently supports more than 30 VMS program customers with employees in over 40 states. Michpal Michpal, an Israeli registered company, is a developer of proprietary, on-premise payroll software solution for processing traditional payroll stubs to Israeli enterprises and payroll service providers. Michpal also developed several complementary modules such as attendance reporting, which are sold to its customers for additional fees. Together with its subsidiaries Unique Software Industries Ltd, a software development and services company, providing integrated solutions in the field of payroll for more than 30 years, including pay-stubs, pension services management, education funds management, and software solutions for managing employee attendance, and Effective Solutions Ltd Michapl also provides consulting services in the fields of operational cost savings and procurement, as well as salary control and monitoring a payroll, labor, pensions, social security and employee income tax matters. As of December 31, 2023, Michpal serves approximately 8,000 customers, most of which are long-term customers. Zap Group Zap Group, is Israel’s largest group of consumer websites which manages more than twenty leading consumer websites from diverse content worlds with a total of more than 17 million visits per month, including Zap Price Comparison website, Zap Yellow Pages (the largest business index in Israel) and Zap Rest (Israel’s restaurants index). Zap Group, an Israeli private company, provides a variety of digital advertising solutions for its customers (small and medium businesses in Israel) and an access to an E-commerce platform to allow them engage with their consumers. Zap Group serves over 400,000 listed businesses on its platforms; approximately 16,000 of them are paying customers. The websites managed and offered by Zap Group offer consumers a user-friendly search experience with a variety of advanced tools, which enable them to make educated purchase decisions in the best and most informed way. Digital Solutions Zap Group provides a variety of digital advertising solutions for its customers (small and medium businesses in Israel) and an access to an E-commerce platform that allows them to engage with their consumers. Zap Group regularly seeks to develop attractive digital solutions, which it believes to have market potential for small and medium businesses and their end user. All of Zap Group’s investments in this area have been proven, where we believe we can leverage our experience to enhance product positioning and increase market penetration. We provide our management and technical and financial expertise, marketing experience to help bring these products to market. E-commerce Solutions Zap Group provides an e-commerce platform for approximately 1,500 large, medium and small businesses, which operate stores in Israel. The platform, both website and application, allow end users to compare prices of the various stores for over 1.2 million products in 650 categories. The platform provides to more than 120 million visiting end users annually, 300,000 reviews of stores and products and 5,000 quality guides (videos and articles), which allow them to engage through the platform directly with the stores for a purchase of a certain product they looked at through the platform. Total online purchases through the platform is estimated at approximately NIS 2 billion annually, which is estimated at 14% out of total online purchase volume in Israel (not including food and beverage). In 2021, Zap Group launched a new website for car sellers and buyers, which provides a marketplace where buyers can explore on one website various options for buying a second-hand car (B2C). The platform allows the buyer to compare prices, specs, financing, peripheral services, accessories and overall packages. The Online, real-time supply availability enables transparency, and also provides the buyer an aggregated view of specific sellers and agencies and a direct contact with a large pool of sellers Digital platforms Zap Group provides digital advertising platforms and services through 18 websites for medium and small businesses in 1,600 business categories in Israel, including doctors, lawyers, and other service and product providers. The platform, both website and application allow end users to contact directly with the service provider. The platform provides to more than 50 million visiting end users annually, 200,000 reviews, 2,000 quality guides (videos and articles), 300 price lists, and 700 forums with more than 1.5 million expert explanations. Zap Group also provides its customers other digital services as Search Engine Marketing (Pay Per Click Google and Facebook campaigns) and Search Engine Optimization for their websites. Zap Group also provides website design services, creation of new websites on various tools (ZAP-X), management of social media, online business cards (GMB), and big data services. Restaurants and events Zap Group provides digital advertising platforms and services for more than 17,000 restaurants listed and provides services for social events. Approximately 2,500 of them are paying customers. The platform, both website and application allow end users to directly contact the restaurant for table ordering, ordering of delivery or take away, to post visit reviews or explore the restaurant menu, photo gallery and other content such as articles, etc. The platform provides to more than 30 million visiting end users annually, approximately two million food deliveries, 200,000 reviews, 5,000 food and culinary articles (videos and articles), and more than 0.5 million push updates annually. Other Zap Group provides digital advertising platform for domestic travel and hospitality businesses in Israel (the “Platform”). The platform, both website and application, allows end users to order directly from the provider (hotel, guesthouse or attraction service provider). The platform provides access to millions of visiting end users annually, to approximately 1,200 vacation and leisure locations. Ofek Founded in 1987, Ofek is one of the leading companies in Israel in the fields of aerial and satellite mapping, geographic data collection and processing, and provider of services in numerous geographic applications. Among Ofek’s customers are many government authorities and foreign government. Ofek employs approximately 100 employees, all situated at Ofek’s headquarter in Natanya, Israel, in multiple areas of expertise: geodetic engineers, software experts, geographers and aerial photo interpreters, GIS and surveying engineers, 3D mapping and data processing experts. The company owns three aerial photography aircrafts equipped with state-of-the-art mapping sensors. Ofek operates worldwide. It has successfully completed projects for various clients (government and private) in Asia, America, Europe, Middle East and Africa, and it constantly involved in ongoing international geographic projects. Ofek aerial photography has accumulated experience in managing and executing NSDI and GIS projects and surveys for detecting, collecting and analyzing diverse geographic cadastral and environmental information. TSG TSG is a global high - TSG operates primarily in the defense and homeland security arenas. The nature of military and homeland security actions in recent years, including low intensity conflicts and ongoing terrorist activities, as well as budgetary pressures to focus on leaner but more technically advanced forces, have caused a shift in the defense and homeland security priorities for many of TSG’s major customers. As a result, TSG believes there is a continued demand in the areas of command, control, communications, computer and intelligence (C4I) systems, intelligence, surveillance and reconnaissance (ISR) systems, intelligence gathering systems, border and perimeter security systems, cyber-defense systems. There is also a continuing demand for cost-effective logistic support and training and simulation services. TSG believes that its synergistic approach of finding solutions that combine elements of its various activities positions it to meet evolving customer requirements in many of these areas. TSG tailors and adapts its technologies, integration skills, market knowledge and operationally-proven systems to each customer’s individual requirements in both existing and new platforms. By upgrading existing platforms with advanced technologies, TSG provides customers with cost-effective solutions, and its customers are able to improve their technological and operational capabilities within limited budgets. TSG markets its systems and products either as a prime contractor or as a subcontractor to various governments and defense and homeland security contractors worldwide. In Israel, TSG sells its defense, intelligence and homeland security systems and products mainly to the IMOD, which procures all equipment for the Israeli Defense Force (IDF). Shamrad Shamrad is an Israeli private company, engaged in the supply, integration and installation of computer communication infrastructures, announcement and alarm systems and electronic security systems. Shamrad represents several companies in the field of security: ATI systems – sirens, Garrett – Metal detectors, Kopp – Ferro Magnetic detectors for MRI rooms. Shamrad holds vast experience in design, supply and installation of security systems, integrated with command and control solutions, CCTV, access control and intruder detection. Shamrad provides video solutions together with high speed networks and wireless links, allowing hundreds of camera channels to be viewed in one or many control centers. Shamrad installs IP and analog cameras in various configurations such as, Bullet, Dome, PTZ, Box, and Thermal. Shamrad offers customers complete solutions for communications and telephony infrastructure, both in the fields of passive and active equipment. Amongst the services offered are installation and maintenance of networks (local and wireless) and specific dedicated communications rooms. Shamrad has, since it’s inception, a dedicated department offering a complete and professional solution, with a system wide view tailored to exactly meet our customers’ requirements. b) Consolidated Goodwill in material partially owned subsidiaries December 31, 2023 2022 Matrix IT and its subsidiaries $ 285,596 $ 288,235 Sapiens and its subsidiaries 401,699 397,613 Magic Software and its subsidiaries 166,065 158,699 Michpal and its subsidiaries 44,108 40,603 ZAP and its subsidiaries 32,186 33,081 Other consolidated subsidiaries 6,927 7,930 $ 936,581 $ 926,161 c) Reporting on operating segments The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated and assesses its performance. The CODM has been identified as Formula’s CEO. The CODM assess the performance of the Group based on each of the Group’s directly held subsidiaries and company accounted for at equity operating income (or loss). Headquarters and finance expenses of Formula are allocated proportionally among the investees. Matrix IT Sapiens Magic Michpal ZAP Other Adjustments Total Year ended December 31, 2023: Revenues from external customers $ 1,416,283 $ 514,584 $ 531,415 $ 36,912 $ 45,286 $ 156,662 $ (80,239 ) $ 2,620,903 Inter-segment revenues 3,579 - 3,637 - - 525 (7,741 ) - Total revenues $ 1,419,862 $ 514,584 $ 535,052 $ 36,912 $ 45,286 $ 157,187 $ (87,980 ) $ 2,620,903 Depreciation and amortization $ 55,230 $ 30,147 $ 20,553 $ 4,801 $ 8,090 $ 7,950 (5,582 ) 121,189 Segment operating income $ 106,831 $ 80,070 $ 57,108 $ 6,366 $ (3,126 ) $ 9,492 $ (6,896 ) $ 249,845 Unallocated corporate expenses (10,477 ) Total operating income $ 239,368 Financial expenses, net (28,334 ) Group’s share of profits of companies accounted for at equity, net 773 Taxes on income (46,075 ) Net income $ 165,732 Matrix IT Sapiens Magic Michpal ZAP Other Adjustments Total Year ended December 31, 2022: Revenues from external customers $ 1,388,508 $ 474,736 $ 561,682 $ 37,714 $ 49,893 $ 133,526 $ (73,702 ) $ 2,572,357 Inter-segment revenues 4,310 - 5,110 309 - 360 (10,089 ) - Total revenues $ 1,392,818 $ 474,736 $ 566,792 $ 38,023 $ 49,893 $ 133,886 $ (83,791 ) $ 2,572,357 Depreciation and amortization $ 48,288 $ 33,050 $ 19,804 $ 4,770 $ 7,976 $ 6,214 (4,794 ) 115,308 Segment operating income $ 149,298 $ 66,164 $ 61,762 $ 8,117 $ (1,042 ) $ 8,311 $ (5,345 ) $ 287,265 Unallocated corporate expenses (10,625 ) Total operating income $ 276,640 Financial expenses, net (19,930 ) Group’s share of profits of companies accounted for at equity, net (1,808 ) Taxes on income (55,235 ) Net income $ 199,667 Matrix IT Sapiens Magic Michpal ZAP Other Adjustments Total Year ended December 31, 2021: Revenues from external customers $ 1,344,088 $ 461,035 $ 477,643 $ 32,087 $ 51,640 $ 127,641 $ (89,758 ) $ 2,404,376 Inter-segment revenues 6,529 - 2,682 - - - (9,211 ) - Total revenues $ 1,350,617 $ 461,035 $ 480,325 $ 32,087 $ 51,640 $ 127,641 $ (98,969 ) $ 2,404,376 Depreciation and amortization $ 45,736 $ 45,732 $ 19,837 $ 4,023 $ 7,486 $ 3,776 $ (4,406 ) $ 122,184 Segment operating income $ 102,054 $ 44,210 $ 59,785 $ 6,838 $ 5,962 $ 3,841 $ (3,519 ) $ 219,171 Unallocated corporate expenses (11,155 ) Total operating income $ 208,016 Financial expenses, net (24,005 ) Group’s share of profits of companies accounted for at equity, net 505 Taxes on income (42,614 ) Net income $ 141,902 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 26: - SUBSEQUENT EVENTS a) In March 2024, Formula declared a cash dividend of approximately NIS 35.3 million (approximately $10.0 million) or NIS 2.3 per share (approximately $0.63 per share) to shareholders of record on April 4, 2024 that was paid on April 18, 2024. b) On April 4, 2024, Magic Software acquired Theoris, Inc. (“Theoris”), a U.S. based full-services company, specializes in IT staffing and recruiting, for a total consideration of $12,500, of which $10,000 was paid upon closing and the remaining $2,500 was payable in two equal installments following the first- and second-year anniversaries. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation of the financial statements | 1) Basis of presentation of the financial statements These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The Company’s financial statements have been prepared on a cost basis, except for certain assets and liabilities such as: financial assets measured at fair value through other comprehensive income; liabilities with respect to business combination; and other financial assets and liabilities (including derivatives) which are presented at fair value through profit or loss, provisions, employee benefit assets and liabilities, investments in associates and joint ventures. The Company has elected to present the profit or loss items using the function of expense method. |
Use of estimates, judgments and assumptions | 2) Use of estimates, judgments and assumptions: The preparation of the consolidated financial statements requires management to make estimates, judgments, and assumptions, that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, revenues and expenses in the financial statements. Such judgments, estimates and assumptions are related, but not limited to, effective control, liabilities with respect to business combination, goodwill and identifiable intangible assets and their subsequent impairment analysis, determination of fair value of put options of non-controlling interests, legal contingencies, research and development capitalization, classification of leases, income tax uncertainties, deferred taxes, share-based compensation, as well as the determination of revenue recognition from contracts accounted for based on the estimate of percentage of completion. The Company’s management believes that the estimates, judgments, and assumptions used, are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Changes in accounting estimates are reported in the period of the change in estimate. |
Consolidated financial statements | 3) Consolidated financial statements: The consolidated financial statements comprise the financial statements of companies that are controlled by the Company (subsidiaries). Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to unilaterally affect those returns through its power over the investee. Potential voting rights are considered when assessing whether an entity has control. The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases. The financial statements of the Company and of the investees, after being adjusted to comply with IFRS, are prepared for the same reporting period and using consistent accounting treatment of similar transactions and economic activities. Any discrepancies in the applied accounting policies are eliminated by making appropriate adjustments. Significant intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements. Effective control: In a situation where the Company holds less than a majority of voting power in a given entity, but that power is sufficient to enable the Company to unilaterally direct the relevant activities of such entity, then control is exercised. When assessing whether voting rights held by the Company are sufficient to give it power, the Company considers all facts and circumstances, including: the amount of those voting rights relative to the amount and dispersion of other vote holders; potential voting rights held by the Company and other shareholders or parties; rights arising from other contractual arrangements; significant personal ties; and any additional facts and circumstances that may indicate that the Company has, or does not have, the ability to direct the relevant activities when decisions need to be made, inclusive of voting patterns observed at previous meetings of shareholders. The Company’s management has concluded that despite the lack of absolute majority of voting power at the general meetings of shareholders of Matrix IT, Sapiens and Magic Software, in accordance with IFRS 10, these investees are controlled by the Company. The conclusion regarding the existence of control during the years ended December 31, 2023, 2022 and 2021 with respect to Matrix, Sapiens and Magic Software, in accordance with IFRS 10, was made in accordance with the following factors: Matrix IT As of December 31, 2023, the Company held 48.21% of the outstanding ordinary shares of Matrix. The conclusion regarding the existence of control in Matrix, in line with IFRS 10, was made considering the following additional factors: i) Governing bodies of Matrix: Decisions of Matrix’s shareholders general meeting are taken by a simple majority of votes represented at the general meeting; the annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Matrix’s independent auditors for the next year, as well as approve Matrix’s financial statements and management’s report on operations; in accordance with Matrix’s articles of association, the board of directors of Matrix is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Matrix’s shareholders by its articles of association, including the decision to pay out dividends; Matrix’s board of directors is composed of 5 members, 2 of whom are external directors as required by the Israeli Companies Law, 5759-1999, another one of whom is an independent director, while the remaining two directors are associated with Formula, including Formula’s chief executive officer who serves as the chairman of Matrix’s board of directors. ii) Shareholders structure of Matrix IT: Matrix’s shareholders’ structure may be considered dispersed because, apart from the Company, only two shareholders (both Israeli institutional investors) held more than 5% of Matrix’s voting power during the reporting period (one holding approximately 10.3% and the second one holding approximately 5%); there is no evidence that any of the shareholders has or had granted to any other shareholder a voting proxy at the general meeting; over the last three years (i.e., 2021-2023), Matrix’s general meetings were attended by shareholders representing in aggregate between 79% -83% of total voting rights. This means that the level of activity of the company’s shareholders is relatively moderate. Bearing in mind that the company presently holds approx. 48.21% of total voting rights, the attendance from shareholders would have to be higher than 96.42% in order to deprive Formula of an absolute majority of votes at the general meeting. The Company believes that achieving such high attendance seems unlikely. In addition, Israeli law provides that institutional investors should not hold the ability to direct the company’s business and as such should not exceed 20% each. An institutional investor cannot also hold more than 20% seats in board of directors. Looking at entire Israeli market the practice is that institutional investors are not taking positions on boards of directors – as having such position would impact institutional investors’ ability to have certain transactions on the market (e.g. insider trading threat). If institutional investors cooperate between themselves, they may be considered violating this rule – moreover if they vote in the same way however, contrary to the major shareholder they might be accused of cooperation and violation of the rule. Hence, there is both legal and practical limitation of these investors to coordinate approaches. With regard to the above, the Group has determined that the company, despite the lack of an absolute majority of shares in Matrix IT, is still able to influence the appointment of directors at Matrix IT, and therefore may affect the directions of development as well as current business operations of that company. Sapiens As of December 31, 2023, the Company held 43.63% of the outstanding common shares of Sapiens. The conclusion regarding the existence of control in Sapiens, in line with IFRS 10, was made considering the following factors: i) Governing bodies of Sapiens: Decisions of Sapiens’ shareholders general meeting are taken by a simple majority of votes represented at the general meeting; the annual (ordinary) general meeting adopts resolutions to appoint individual directors, choose Sapiens’ independent auditors for the next year, as well as approve the company’s financial statements and management’s report on operations; in accordance with Sapiens’ articles of association, the board of directors of Sapiens is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Sapiens’ shareholders by its articles of association, including the decision to pay out dividends. Sapiens’ board of directors is composed of 6 members, 3 of whom are independent directors, and one being Formula’s chief executive officer who serves as the chairman of Sapiens’ board of directors. ii) Shareholders structure of Sapiens: Sapiens’ shareholders structure is dispersed because no other shareholder except for the Company’s controlling shareholder, held as of December 31, 2023 more than 5% of the voting rights. There is no evidence that any shareholder has or had granted to any other shareholder a voting proxy at the general meeting; and, over the last three years (i.e., 2021-2023), Sapiens’ general meetings were attended by shareholders representing in total between 81%-84% the total voting power, including the Company’s voting power. This fact indicates that public shareholder participation is not considerably high and in order to have a majority against the company potential 43.63% voting rights there will be needed at least 87.26% of all shareholder votes that participating in each of the annual shareholders’ meeting. Therefore it is management’s opinion that despite the lack of an absolute majority of shares in Sapiens, the Company is still able to influence the appointment of directors at Sapiens and therefore may affect Sapiens’ directions of development as well as its current business operations. Magic Software As of December 31, 2023, the Company held 46.71% of the outstanding ordinary shares of Magic Software. The conclusion regarding the existence of control in Magic Software, in line with IFRS 10, was made considering the following factors: i) Governing bodies of Magic Software: Decisions of Magic Software’s shareholders general meeting are taken by a simple majority of votes represented at the general meeting; the annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Magic Software’s independent auditors for the next year, as well as to approve Magic Software’s financial statements and the management’s report on operations; in accordance with Magic Software’s articles of association, the board of directors of Magic Software is responsible for managing Magic Software’s current business operations and is authorized to take substantially all decisions which are not specifically reserved to Magic Software’s shareholders by its articles of association, including the decision to pay out dividends; and, Magic Software’s board of directors is composed of 6 members, 3 of whom are external directors, the other three internal directors are affiliated (currently and in the past) with the company. One of whom is Formula’s chief executive officer, who also serves as Magic Software’s chief executive officer. ii) Shareholders structure of Magic Software: Magic Software’s shareholders structure is dispersed because, apart from the Company, as of December 31, 2023, there were two financial Israeli institutional shareholders holding more than 5% of Magic Software’s voting rights, holding 6.97% and 10.7% as of 31 December, 2023; there is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting; and, over the last three years from (i.e., 2021-2023), Magic Software’s general meetings were attended by shareholders representing between 84.7%-86.7%. of the total voting rights. This fact indicates that public shareholder participation is not considerably high and in order to have a majority against the company potential 46.71% there will be needed at least 93.43% of all shareholder votes that participating in each of the annual shareholders’ meeting. Therefore, it is management’s opinion that despite the lack of an absolute majority of shares in Magic Software, the Company is still able to influence the appointment of directors at Magic Software and therefore may affect Magic Software’s directions of development as well as its current business operations. |
Non-controlling interests | 4) Non-controlling interests Non-controlling interests in subsidiaries, represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as a change in equity by adjusting the carrying amount of the non-controlling interests with a corresponding adjustment of the equity attributable to equity holders of the Company less / plus the consideration paid or received. For more information regarding put options to the Non-controlling interests please see Note 2(16)(E) below. |
Business combinations and goodwill | 5) Business combinations and goodwill: Business combinations are accounted for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company determines whether to measure the non-controlling interests in the acquiree based on their fair value on the acquisition date or at their proportionate share in the fair value of the acquiree’s net identifiable assets. Direct acquisition costs are carried to the statement of profit or loss as incurred. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset or liability in accordance with IFRS 9, “Financial Instruments”. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. If the contingent consideration is classified as an equity instrument, it is measured at fair value on the acquisition date without subsequent remeasurement. Goodwill is initially measured at cost which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable assets acquired and liabilities assumed. If the resulting amount is negative, the acquirer recognizes the resulting gain on the acquisition date. |
Investment in joint arrangements | 6) Investment in joint arrangements: Joint arrangements are arrangements in which the Company has joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. i. Joint ventures: In joint ventures the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint venture is accounted for by using the equity method. |
Functional currency, presentation currency and foreign currency | 7) Functional currency, presentation currency and foreign currency: i. Functional currency and presentation currency: The presentation currency of these consolidated financial statements of the Group is the U.S. dollar (the “dollar”), since the Company believes that financial statements in U.S. dollars provide more relevant information to its investors and users of the financial statements. The functional currency applied by Formula, on a stand-alone basis, Since January 1, 2019 is the NIS. The functional currencies applied by Formula’s subsidiaries and associates are the currencies of the primary economic environment in which each one of them operates. Assets and liabilities of an investee which is a foreign operation, including fair value adjustments upon acquisition, are translated at the closing rate at each reporting date. Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized in other comprehensive income (loss). Intragroup loans for which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of the investment in the foreign operation and, accordingly, the exchange rate differences from these loans (net of the tax effect) are recorded in other comprehensive income (loss). Upon the full or partial disposal of a foreign operation resulting in loss of control in the foreign operation, the cumulative gain (loss) from the foreign operation which had been recognized in other comprehensive income is transferred to profit or loss. Upon the partial disposal of a foreign operation which results in the retention of control in the subsidiary, the relative portion of the amount recognized in other comprehensive income is reattributed to non-controlling interests. ii. Transactions, assets and liabilities in foreign currency: Transactions denominated in foreign currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at each reporting date into the functional currency at the exchange rate at that date. Exchange rate differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currency and measured at cost are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value was determined. |
Short-term deposits | 8) Short-term deposits: Short-term deposits are deposits with an original maturity of more than three months from the date of investment and which do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit. Restricted deposits include deposits used to secure certain subsidiaries’ ongoing projects, as well as security deposits with respect to leases, and are classified under other short-term and long-term receivables. As of December 31, 2023, the group have dollar deposits in the amount of approximately 76 million dollars, for a period not exceeding three months that carry a monthly interest rate of approximately 1.78%. |
Inventories | 9) Inventories: Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises costs of purchase and costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. Inventories are mainly comprised of purchased merchandise and products which consist of educational software kits, computers, peripheral equipment and spare parts. Cost is determined on the “first in – first out” basis. The Group periodically evaluates the condition and aging of its inventories and makes provisions for slow-moving inventories accordingly. No such impairments have been recognized in any period presented. |
Revenue recognition | 10) Revenue recognition: Revenue from contracts with customers is recognized when the control over the goods or services is transferred to the customer. The transaction price is the amount of the consideration that is expected to be received based on the contract terms, excluding amounts collected on behalf of third parties (such as taxes). In determining the amount of revenue from contracts with customers, the Group evaluates whether it is a principal or an agent in the arrangement. The Group is a principal when the Group controls the promised goods or services before transferring them to the customer. In these circumstances, the Group recognizes revenue for the gross amount of the consideration. When the Group is an agent, it recognizes revenue for the net amount of the consideration, after deducting the amount due to the principal. Sale of software licensing, maintenance services and post implementation consulting services A software licensing transaction that does not require significant implementation services is considered a distinct performance obligation, as the customer can benefit solely from the software on its own or together with other readily available resources. The Group recognizes revenue from software licensing transactions at a point in time when the Group provides the customer a right to use the Group’s intellectual property as it exists at the point in time at which the license is granted to the customer. The Group recognizes revenue from software licensing transactions over time when the Group provides the customer a right to access the Group’s intellectual property throughout the license term. The Group may generate revenue from sale of software licensing which includes significant implementation and customization services. In such contracts the Group is normally committed to provide the customer with a functional IT system and the customer can only benefit from such functional system, being the final product that would normally be comprised of proprietary licenses and significant related services. Revenues from these contracts are based on either fixed price or time and material. Software licensing transactions which involve significant implementation, customization, or integration of the Group’s software license to customer-specific requirements, are considered as one performance obligation satisfied over-time. The underlying deliverable is owned and controlled by the customer and does not create an asset with an alternative use to the Group. In addition, the Group has an enforceable right to payment for performance completed throughout the duration of the contract. Accordingly, the Group recognizes revenue from such contracts over time, using the percentage of completion accounting method. The Group recognizes revenue and gross profit as the work is performed based on a ratio between actual costs incurred compared to the total estimated costs for the contract. Provisions for estimated losses on uncompleted contracts are made during the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. When post implementation and consulting services do not involve significant customization, the Group accounts for such services as performance obligations satisfied over time and revenues are recognized as the services are provided. Revenue from maintenance is recognized over time, during the period the customer simultaneously receives and consumes the benefits provided by the Group’s performance. When payments from customers are made before or after the service is performed, the Group recognizes the resulting contract asset or liability. Sale of hardware and infrastructure Revenue from the sale of hardware and infrastructure is recognized in profit or loss at the point in time when the control of the goods is transferred to the customer, generally upon delivery of the goods to the customer. Sale of training and implementation services Revenues from training and implementation services are recognized when the service is provided. Revenue from training services in respect of public courses whose operating range is up to 3 months is recognized at the end of the course period. Revenues from training services in respect of long-term courses will be recognized over the term of the course. Revenues from implementation projects ordered by organizations is recognized according to actual inputs (actually worked hours). Revenue of contracts according to actual inputs Revenue from framework agreements for the performance of work according to actual inputs is recognized according to the hours invested. Revenue of fixed price contracts Revenue from fixed price contracts is recognized according to the completion rate method when all the following conditions are met: the revenue is known or can be estimated reliably, the collection of income is expected, the costs involved in performing the work are known or can be estimated, there is no material uncertainty about the Group’s ability to complete the work, and the customer and the completion rate can be reliably estimated. The Group applies a cost-based input method for measuring the progress of performance obligations that are satisfied over time. In applying this cost-based input method, the Group estimates the costs to complete contract performance in order to determine the amount of the revenue to be recognized. These estimated costs include the direct costs and the indirect costs that are directly attributable to a contract based on a reasonable allocation method. In certain circumstances, the Group is unable to measure the outcome of a contract, but the Group expects to recover the costs incurred in fulfilling the contract as of the reporting date. In such circumstances, the Group recognizes revenue to the extent of the costs incurred as of the reporting date until such time the outcome of the contract can be reasonably measured. If a loss is anticipated from a contract, the loss is recognized in full regardless of the percentage of completion. When appropriate, the Group also applies a practical expedient permitted under IFRS 15 whereby if the Group has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Group’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided), the Group may recognize revenue in the amount it is entitled to invoice. Deferred revenues, which represent a contract liability, include unearned amounts received under maintenance and support (mainly) and amounts received from customers for which revenues have not yet been recognized. Allocating the transaction price For contracts that consist of more than one performance obligation, at contract inception the Group allocates the contract transaction price to each performance obligation identified in the contract on a relative stand-alone selling price basis. The stand-alone selling price is the price at which the Group would sell the promised goods or services separately to a customer. The Group determines the stand-alone selling price for the purposes of allocating the transaction price to each performance obligation by considering several external and internal factors including, but not limited to, transactions where the specific performance obligation is sold separately, historical actual pricing practices and geographies in which the Group offers its products and services. If a specific performance obligation, such as the software license, is sold for a broad range of amounts (that is, the selling price is highly variable) or if the Group has not yet established a price for that good or service, and the good or service has not previously been sold on a stand-alone basis (that is, the selling price is uncertain), the Group applies the residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective stand-alone selling prices, with any residual amount of transaction price allocated to the remaining specific performance obligation. Variable consideration The Group determines the transaction price separately for each contract with a customer. When exercising this judgment, the Group evaluates the effect of each variable amount in the contract, taking into consideration discounts, penalties, variations, claims, and non-cash consideration. In determining the effect of the variable consideration, the Group normally uses the “most likely amount” method described in the Standard. Pursuant to this method, the amount of the consideration is determined as the single most likely amount in the range of possible consideration amounts in the contract. According to the Standard, variable consideration is included in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Costs of obtaining a contract In order to obtain certain contracts with customers, the Group incurs incremental costs in obtaining the contract (such as sales commissions which are contingent on making binding sales). Costs incurred in obtaining the contract with the customer which would not have been incurred if the contract had not been obtained and which the Group expects to recover are recognized as an asset and amortized on a systematic basis that is consistent with the provision of the services under the specific contract. An impairment loss in respect of capitalized costs of obtaining a contract is recognized in profit or loss when the carrying amount of the asset exceeds the remaining amount of consideration that the Group expects to receive for the goods or services to which the asset relates, less the costs that relate directly to providing those goods or services and that have not been recognized as expenses. The Group has elected to apply the practical expedient allowed by IFRS 15 according to which incremental costs of obtaining a contract are recognized as an expense when incurred if the amortization period of the asset is one year or less. Revenues that include warranty services In certain cases, the Group also provides a warranty for goods and services sold (i.e., extended warranties when the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when the scope of which is broader than just an assurance to the customer that the product/service complies with agreed-upon specifications). The Group has ascertained that such warranties granted by the Group meet the definition of service. The conclusion regarding the extended nature of a warranty is made whenever the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when such warranty is more extensive than the minimum required by law. Under IFRS 15, the fact of granting an extended warranty indicates that the Group provides an additional service. As such, the Group recognizes an extended warranty as a separate performance obligation and allocates a portion of the transaction price to such service. In all cases where an extended warranty is accompanied by a maintenance service, which is even a broader category than the extended warranty itself, revenues are recognized over time because the customer consumes the benefits of such service as it is performed by the provider. If this is the case, the Group continues to allocate a portion of the transaction price to such maintenance service. Likewise, in cases where a warranty service is provided after the project completion and is not accompanied by any maintenance service, then a portion of the transaction price and analogically recognition of a portion of contract revenues will have to be deferred until the warranty service is actually fulfilled. Disaggregation of revenue Service revenue includes contracts primarily for the provision of supplies and services other than design, development, customization, implementation, software maintenance and support and software updates associated with delivery of products or proprietary software. It may be a stand-alone service contract or a service performance obligation which is distinct from a contract or performance obligation for design, development, customization, support and upgrade or delivery of product. The Group’s service contracts include contracts in which the customer simultaneously receives and consumes the benefits provided as the performance obligations are satisfied. The Group’s service contracts primarily include operation-type contracts, outsourcing, consulting, remote development services, digital advertising management, training and similar activities. Transaction prices allocated to performance obligation Remaining performance obligations represent contract revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. The aggregate amount of consideration allocated to performance obligations either not satisfied or partially unsatisfied was approximately $2,319,937 as of December 31, 2023 respectively. Remaining performance obligations include the remaining non-cancelable, committed and fixed portion of these contracts for their entire duration. The remaining performance obligations related to professional services contracts that are on a time and materials basis were excluded, as the Company elected to apply the practical expedient in accordance with IFRS 15. The Company expected to recognize approximately 66.2% in 2024 from remaining performance obligations as of December 31, 2023, and the remainder thereafter. |
Income tax | 11) Income tax: Current or deferred taxes are recognized in profit or loss, except to the extent that they relate to items which are recognized in other comprehensive income or equity. ● Current taxes: The current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments required in connection with the tax liability in respect of previous years. ● Deferred taxes: Deferred taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes. Deferred taxes are measured at the tax rate that is expected to apply when the asset is realized or the liability is settled, based on tax laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is not probable that they will be utilized. Deductible carryforward losses and temporary differences for which deferred tax assets had not been recognized are reviewed at each reporting date and a respective deferred tax asset is recognized to the extent that their utilization is probable. Taxes that would apply in the event of the disposal of investments in investees have not been considered in computing deferred taxes, as long as the disposal of the investments in investees is not probable in the foreseeable future. Also, deferred taxes that would apply in the event of distribution of earnings by investees as dividends have not been considered in computing deferred taxes, since the distribution of dividends does not involve an additional tax liability or since it is the Group’s policy not to initiate distribution of dividends from a subsidiary that would trigger an additional tax liability. Taxes on income that relate to distributions of an equity instrument and to transaction costs of an equity transaction are accounted for pursuant to IAS 12. Deferred taxes are offset if there is a legally enforceable right to offset a current tax asset against a current tax liability and the deferred taxes relate to the same taxpayer and the same taxation authority. |
Leases | 12) Leases: The Group accounts for a contract as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration. i) The Group as lessee For leases in which the Group is the lessee, the Group recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases whose term is up to twelve months and leases for which the underlying asset is of low value. For these excluded leases, the Group has elected to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Group has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract. Leases which entitle employees to a company car as part of their employment terms are accounted for as employee benefits in accordance with the provisions of IAS 19 and not as subleases. On the commencement date, the lease liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined, or otherwise using the Group’s incremental borrowing rate. After the commencement date, the Group measures the lease liability using the effective interest rate method. On the commencement date, the right-of-use asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful life and the lease term. Following are the amortization periods of the right-of-use assets by class of underlying asset: Years Mainly Land and Buildings 2-23 3 Motor vehicles 2-3 3 The Group tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36. ii) Lease extension and termination options A non-cancelable lease term includes both the periods covered by an option to extend the lease when it is reasonably certain that the extension option will be exercised and the periods covered by a lease termination option when it is reasonably certain that the termination option will not be exercised. In the event of any change in the expected exercise of the lease extension option or in the expected non-exercise of the lease termination option, the Group remeasures the lease liability based on the revised lease term using a revised discount rate as of the date of the change in expectations. The total change is recognized in the carrying amount of the right-of-use asset until it is reduced to zero, and any further reductions are recognized in profit or loss. iii) Lease modifications: If a lease modification does not reduce the scope of the lease and does not result in a separate lease, the Group remeasures the lease liability based on the modified lease terms using a revised discount rate as of the modification date and records the change in the lease liability as an adjustment to the right-of-use asset. If a lease modification reduces the scope of the lease, the Group recognizes a gain or loss arising from the partial or full reduction of the carrying amount of the right-of-use asset and the lease liability. The Group subsequently remeasures the carrying amount of the lease liability according to the revised lease terms, at the revised discount rate as of the modification date and records the change in the lease liability as an adjustment to the right-of-use asset. |
Property, plant and equipment, net | 13) Property, plant and equipment, net: Property, plant and equipment are measured at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and any related investment grants and excluding day-to-day servicing expenses. Cost includes spare parts and auxiliary equipment that are used in connection with plant and equipment. The cost of an item of property, plant and equipment comprises the initial estimate of the costs of dismantling and removing the item and restoring the site on which the item is located. Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows: % Computers, software, and peripheral equipment 20 – 33 Office furniture and equipment 6 – 33 (mainly 7) Motor vehicles 13 – 15 (mainly 15) Leasehold improvements are amortized using the straight-line method over the term of the lease (including option terms that are deemed to be reasonably assured) or the estimated useful life of the improvements, whichever is shorter. The useful life, the depreciation method and the residual value of an asset are reviewed at least each year-end (at the end of the year) and any changes are accounted for prospectively as a change in accounting estimate. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognized. For impairment testing of property, plant and equipment, see Note 2(15) below. |
Intangible assets | 14) Intangible assets, net: Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Expenditures relating to internally generated intangible assets, excluding capitalized development costs, are recognized in profit or loss when incurred. Intangible assets with a finite useful life are amortized over their useful life and reviewed for impairment whenever there is an indication that the asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least at each year end. Other intangible assets Intangible assets excluding capitalized development costs are comprised mainly of customer-related intangible assets, backlogs, acquired technology and patent, and are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. The useful life of intangible assets is as follows: Years Customer relationship, backlog and distribution rights 1 – 15 Acquired technology 2 – 8 Patents 10 Gains or losses arising from the derecognition of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss. The useful life of these assets is reviewed annually to determine whether their indefinite life assessment continues to be supportable. If the events and circumstances do not continue to support the assessment, the change in the useful life assessment from indefinite to finite is accounted for prospectively as a change in accounting estimate, and on that date the asset is tested for impairment. Commencing from that date, the asset is amortized systematically over its useful life. |
Impairment of non-financial assets | 15) Impairment of non-financial assets: The Group evaluates the need to record an impairment of non-financial assets (property, plant and equipment, capitalized software costs and other intangible assets, goodwill, investments in joint venture) whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in profit or loss. An impairment loss of an asset, other than goodwill, is reversed only if there have been changes in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years and its recoverable amount. The reversal of impairment loss of an asset presented at cost is recognized in profit or loss. The following criteria are applied in assessing impairment of these specific assets: i. Goodwill in respect of subsidiaries: For the purpose of impairment testing, goodwill acquired in a business combination is allocated, at the acquisition date, to each of our cash-generating units that are expected to benefit from the synergies of the combination. The Group reviews goodwill for impairment once a year, on December 31, or more frequently if events or changes in circumstances indicate that there is an impairment. Goodwill is tested for impairment by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units) to which the goodwill has been allocated. An impairment loss is recognized if the recoverable amount of the cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is less than the carrying amount of the cash-generating unit (or group of cash-generating units). Any impairment loss is allocated first to goodwill. Impairment losses recognized for goodwill cannot be reversed in subsequent periods. The discounted cash flow method is used to determine the recoverable amount of a cash-generating unit or the group of cash-generating units to which goodwill is allocated. The projected cash flows are derived from the budget for the next five years and do not include restructuring activities to which the Company is not yet committed or significant future investments that will enhance the performance of the assets of the cash-generating unit being tested. The recoverable amount is sensitive to key assumptions used by the Company’s management to determine the recoverable amount, including discount rates and future growth rate. The discount rates are calculated based on a risk-free rate of interest and a market risk premium. The discount rates reflect the current market assessment of the risks specific to each group of cash-generating units by taking into account specific group information on beta factors, leverage and cost of debt. The Company performed annual impairment tests as of December 31, 2023, 2022 and 2021 and did not identify any impairment losses. ii. Investment in associate or joint venture using the equity method: After application of the equity method, the Group determines whether it is necessary to recognize any additional impairment loss with respect to the investment in associates or joint ventures. The Group determines at each reporting date whether there is objective evidence that the carrying amount of the investment in the associate or the joint venture is impaired. The test of impairment is carried out with reference to the entire investment, including the goodwill attributed to the associate or the joint venture. iii. Intangible assets with an indefinite useful life / capitalized development costs that have not yet been systematically amortized: The impairment test is performed annually, on December 31, or more frequently if events or changes in circumstances indicate that there is an impairment. During the years ended December 31, 2023, 2022 and 2021, no impairment indicators were identified. |
Financial instruments | 16) Financial instruments: A. Financial assets: Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss. B. Financial liabilities: i. Financial liabilities measured at amortized cost: Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability. After initial recognition, the Group measures all financial liabilities at amortized cost using the effective interest rate method, except for: ● Financial liabilities at fair value through profit or loss, such as derivatives; ● Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies; ● Financial guarantee contracts; and ● Contingent consideration recognized by an acquirer in a business combination as to which IFRS 3 applies. ii. Financial liabilities measured at fair value through profit or loss: At initial recognition, the Group measures financial liabilities that are not measured at amortized cost at fair value. Transaction costs are recognized in profit or loss. After initial recognition, changes in fair value are recognized in profit or loss. C. Derecognition of financial liabilities: A financial liability is derecognized when it is extinguished, that is, when the obligation is discharged or cancelled or expires. A financial liability is extinguished when the debtor discharges the liability by paying in cash, other financial assets, goods or services or is legally released from the liability. When there is a modification to the terms of an existing financial liability, the Group evaluates whether the modification is substantial. If the terms of an existing financial liability are substantially modified, such modification is accounted for as an extinguishment of the original liability and the recognition of a new liability. The difference between the carrying amounts of the above liabilities is recognized in profit or loss. If the modification is not substantial, the Group recalculates the carrying amount of the liability by discounting the revised cash flows at the original effective interest rate and any resulting difference is recognized in profit or loss. D. Compound financial instruments: i) Convertible debentures which contain both an equity component and a liability component are separated into two components. This separation is performed by first determining the liability component based on the fair value of an equivalent non-convertible liability. The value of the conversion component is determined to be the residual amount. Directly attributable transaction costs are apportioned between the equity component and the liability component based on the allocation of proceeds to the equity and liability components. ii) Convertible debentures that are denominated in foreign currency contain two components: the conversion component and the debt component. The liability conversion component is initially recognized as a financial derivative at fair value. The balance is attributed to the debt component. Directly attributable transaction costs are allocated between the liability conversion component and the liability debt component based on the allocation of the proceeds to each component. E. Put option granted to non-controlling interests: When the Group grants to non-controlling interests a put option to sell part or all of their interests in a subsidiary, during a certain period, even if such purchase obligation is conditional on the counterparty’s exercise of its contractual right to cause such redemption, if the put option agreement does not transfer to the Group any benefits incidental to ownership of the equity instrument (i.e. the Group does not have a present ownership in the shares concerned) then at the end of each reporting period the non-controlling interests (to which a portion of net profit attributable to non-controlling interests is allocated) are classified as a financial liability, as if such put-able equity instrument was redeemed on that date. The difference between the non-controlling interests carrying amount at the end of the reporting period and the present value of the liability is recognized directly in equity of the Group, under “Additional paid-in capital”. The Group remeasures the financial liability at the end of each reporting period based on the estimated present value of the consideration to be transferred upon the exercise of the put option. If the option is exercised in subsequent periods, the consideration paid upon exercise is treated as settlement of the liability. If the put option expires, the liability is settled and a portion of the investment in the subsidiary disposed of, without loss of control therein. If the Group has present ownership of the non-controlling interests, these non-controlling interests are accounted for as if they are held by the Group, and changes in the amount of the liability are carried to profit or loss. |
Fair value measurement | 17) Fair value measurement: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement is based on the assumption that the transaction will take place in the asset’s or the liability’s principal market, or in the absence of a principal market, in the most advantageous market. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - inputs other than quoted prices included within Level 1 that are observable directly or indirectly. Level 3 - inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data). |
Provisions | 18) Provisions: A provision in accordance with IAS 37 is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are measured according to the estimated future cash flows discounted using a pre-tax interest rate that reflects the market assessments of the time value of money and, where appropriate, those risks specific to the liability. When the Group expects part or all of the expense to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense is recognized in the statement of profit or loss net of any reimbursement. Following are the types of provisions included in the financial statements: i. Legal claims: A provision for claims is recognized when the Group has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources embodying economic benefits will be required by the Group to settle the obligation and a reliable estimate can be made of the amount of the obligation. ii. Contingent liability recognized in a business combination: A contingent liability in a business combination is measured at fair value upon initial recognition. In subsequent periods, it is measured at the higher of the amount initially recognized less, when appropriate, cumulative amortization, and the amount that would be recognized at the end of the reporting period in accordance with IAS 37. |
Employee benefit liabilities | 19) Employee benefit liabilities: The Group maintains several employee benefit plans: i. Short-term employee benefits: Short-term employee benefits are benefits that are expected to be settled wholly before twelve (12) months after the end of the annual reporting period in which the employees render the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized when the Group has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made. The short-term employee benefit liability in the statement of financial position is measured on an undiscounted basis. ii. Post-employment benefits: The plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans. Formula’s and its Israeli subsidiaries and associates accounted for at equity (as defined with respect to their Israeli employee contribution plans pursuant to section 14 of Israel’s Severance Pay Law, 1963 (the “Severance Pay Law”)) pay fixed contributions to those plans and will have no legal or constructive obligation to pay further contributions if the fund into which those contributions are paid does not hold sufficient amounts to pay all employee benefits relating to employee service in the current and prior periods. Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed concurrently with performance of the employee’s services. Formula and its Israeli subsidiaries and companies accounted for at equity also operate a defined benefit plan in respect of severance or retirement pay to their Israeli employees pursuant to the Severance Pay Law. According to the Severance Pay Law, employees are entitled to severance pay upon dismissal or retirement. The liability for termination of employment is measured using the projected unit credit method. The actuarial assumptions include rates of employee turnover and future salary increases based on the estimated timing of payment. The amounts are presented based on discounted expected future cash flows using a discount rate determined by reference to market yields at the reporting date on high quality corporate bonds that are linked to Israel’s Consumer Price Index with a term that is consistent with the estimated term of the severance pay obligation. In respect of its severance pay obligation to certain of its employees, the Group makes current deposits in pension funds and insurance companies (the “plan assets”). Plan assets comprise assets held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the Group’s own creditors and cannot be returned directly to the Group. The liability for employee benefits shown in the statement of financial position reflects the present value of the defined benefit obligation, less the fair value of the plan assets. Remeasurements of the net liability are recognized in other comprehensive income in the period in which they occur. Severance expenses for the years 2023, 2022 and 2021 were $47,076, $51,897 and $48,331, respectively. iii. Other long-term employee benefits: Certain employees of the Group are entitled to benefits in respect of adaptation grants. These benefits are accounted for as other long-term benefits since the Group estimates that these benefits will be utilized and the Group’s respective obligation will be settled during the employment period and more than twelve months after the end of the annual reporting period in which the employees rendered the related service. The Group’s net obligation for other long-term employee benefits, which is computed based on actuarial assumptions, is for the future benefit due to employees for services rendered in the current period and in prior periods and considering expected salary increases. The amount of these benefits is discounted to its present value. The discount rate is determined by reference at the reporting date to market yields on high quality corporate bonds that are linked to the Consumer Price Index and whose term is consistent with the term of the Group’s obligation. Remeasurement of the net obligation is recognized in the statement of comprehensive income in the incurred period. |
Share-based payment transactions | 20) Share-based payment transactions: The Group’s employees and certain service providers are entitled to remuneration in the form of equity-settled share-based payment transactions. The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. The fair value is determined using an acceptable option pricing model. The cost of equity-settled transactions is recognized in profit or loss together with a corresponding increase in equity during the period which the performance and/or service conditions are to be satisfied ending on the date on which the relevant employees become entitled to the award (the “vesting period”). The cumulative expense recognized for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether the market condition is satisfied, provided that all other vesting conditions (service and/or performance) are satisfied. If the Group modifies the conditions on which equity-instruments were granted, an additional expense is recognized for any modification that increases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee/other service provider at the modification date. If a grant of an equity instrument is canceled, it is accounted for as if it had vested on the cancelation date and any expense not yet recognized for the grant is recognized immediately. However, if a new grant replaces the canceled grant and is identified as a replacement grant on the grant date, the canceled and new grants are accounted for as a modification of the original grant, as described above. |
Concentration of credit risk | 21) Concentration of credit risk: Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, short-term deposits, restricted cash, trade receivables. The majority of the Group’s cash and cash equivalents, deposits, and other financial instruments are invested with major banks in Israel, the United States and across Europe. Management believes that these financial instruments are held in financial institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. Cash and cash equivalents and short-term deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally, these banks deposits may be redeemed upon demand and therefore bear minimal risk. The Group’s trade receivables are generally derived from sales to large organizations located mainly in Israel, North America, Europe and Asia Pacific. The Group performs ongoing credit evaluations of its customers using a reliable outside source to determine payment terms and credit limits which are approved based on the size of the customer and to date has not experienced any material losses. In certain circumstances, Formula and its subsidiaries and companies accounted for at equity may require letters of credit, other collateral or additional guarantees. From time to time, the Group’s subsidiaries sell certain of their accounts receivable to financial institutions, within the normal course of business. The Group maintains an allowance for credit losses based upon management’s experience and estimate of collectability of each outstanding invoice. The allowance for credit losses is determined with respect to specific debts or which collection is doubtful. The risk of collection associated with accounts receivable is mitigated by the diversity and number of customers. |
Liquidity risk | 22) Liquidity risk: Liquidity risk arises from managing the Group’s working capital as well as from financial expenses and principal payments of the Group’s debt instruments. Liquidity risk consists of the risk that the Group will have difficulty in fulfilling obligations relating to financial liabilities. The Group’s policy is to ascertain constant cash adequacy needed for settling its liabilities when due. For this purpose, the Group aims to hold cash balances (or adequate credit lines) that will meet anticipated demands. Formula and its subsidiaries and companies accounted for at equity examine cash flow forecasts on a monthly basis as well as information regarding cash balances. As of the reporting date, these forecasts indicate that the Group can expect sufficient liquid sources for covering its entire liabilities under reasonable assumptions. |
Changes in accounting policies – initial adoption of new financial reporting and accounting standards | 23) Changes in accounting policies – initial adoption of new financial reporting and accounting standards: 1. Amendment to IAS 1, “Presentation of Financial Statements”: In January 2020, the IASB issued an amendment to IAS 1, “Presentation of Financial Statements” regarding the criteria for determining the classification of liabilities as current or non-current (“the Original Amendment”). In October 2022, the IASB issued a subsequent amendment (“the Subsequent Amendment”). According to the Subsequent Amendment: ● Only financial covenants with which an entity must comply on or before the reporting date will affect a liability’s classification as current or non-current. ● In respect of a liability for which compliance with financial covenants is to be evaluated within twelve months from the reporting date, disclosure is required to enable users of the financial statements to assess the risks related to that liability. The Subsequent Amendment requires disclosure of the carrying amount of the liability, information about the financial covenants, and the facts and circumstances at the end of the reporting period that could result in the conclusion that the entity may have difficulty in complying with the financial covenants. According to the Original Amendment, the conversion option of a liability affects the classification of the entire liability as current or non-current unless the conversion component is an equity instrument. The Original Amendment and Subsequent Amendment are both effective for annual periods beginning on or after January 1, 2024 and must be applied retrospectively. Early adoption is permitted. The company apply amendments on this consolidated financial statements. 2. Amendments to IAS 7, “Statement of Cash Flows”, and IFRS 7, “Financial Instruments: Disclosures”: In May 2023, the IASB issued amendments to IAS 7, “Statement of Cash Flows”, and IFRS 7, “Financial Instruments: Disclosures” (“the Amendments”) to address the presentation of liabilities and the associated cash flows arising out of supplier finance arrangements, as well as disclosures required for such arrangements. The disclosure requirements in the Amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. The Amendments are effective for annual reporting periods beginning on or after January 1, 2024. Early adoption is permitted but will need to be disclosed. The Company believes that the Amendments are not expected to have a material impact on its consolidated financial statements. |
Financial statements have been reclassified | 24) Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. |
Significant accounting judgments, estimates and assumptions used in the preparation of the financial statements | 25) Significant accounting judgments, estimates and assumptions used in the preparation of the financial statements: In the process of applying the accounting policies, the Group has made the following judgments which have the most significant effect on the amounts recognized in the financial statements: a. Judgments: - Effective control: The Company evaluates whether it controls a company in which it holds less than the majority of the voting rights by, among others, reference to the size of its share of voting rights relative to the size and dispersion of voting rights held by the other shareholders, and by voting patterns at previous shareholders’ meetings. - Determining the fair value of share-based payment transactions: The fair value of share-based payment transactions is determined upon initial recognition by an acceptable option pricing model. The inputs to the model include share price, exercise price and assumptions regarding expected volatility, expected life of share option and expected dividend yield. - Discount rate for a lease liability: When the Company is unable to readily determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing rate. That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. When there are no financing transactions that can serve as a basis, the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving from the lease contract’s conditions and restrictions. In certain situations, the Company is assisted by an external valuation expert in determining the incremental borrowing rate. - Impairment of goodwill: The Group reviews goodwill for impairment at least once a year. This requires management to make an estimate of the projected future cash flows from the continuing use of the cash-generating unit (or a group of cash-generating units) to which the goodwill is allocated and also to choose a suitable discount rate for those cash flows. The possible effects on the financial statements are the recording of impairment losses in profit or loss. |
General (Tables)
General (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
General [Abstract] | |
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated | The following table presents the ownership of the Company’s eight directly held subsidiaries and one jointly controlled entity directly held as of the dates indicated (the list consists only of active companies): Percentage of ownership December 31, 2023 2022 Matrix IT 48.21 48.69 Sapiens 43.63 44.10 Magic Software 46.71 46.26 Insync 90.09 90.09 Michpal 100.00 100.00 TSG (1) 50.00 50.00 Ofek 80.00 80.00 ZAP Group 100.00 100.00 Shamrad 100.00 100.00 (1) TSG’s results of operations are reflected in the Company’s results of operations using the equity method of accounting. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Of Summary Of Significant Accounting Policy Explanatory Abstract | |
Schedule of Amortization Periods of the Right-of-Use Assets | Following are the amortization periods of the right-of-use assets by class of underlying asset: Years Mainly Land and Buildings 2-23 3 Motor vehicles 2-3 3 |
Schedule of Useful Life of the Assets at Annual Rates | Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows: % Computers, software, and peripheral equipment 20 – 33 Office furniture and equipment 6 – 33 (mainly 7) Motor vehicles 13 – 15 (mainly 15) |
Schedule of Useful Life of Intangible Assets | The useful life of intangible assets is as follows: Years Customer relationship, backlog and distribution rights 1 – 15 Acquired technology 2 – 8 Patents 10 |
Business Combination, Signifi_2
Business Combination, Significant Transaction and Sale of Business (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Acquisition of NCDC S.A [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition | The following table summarizes the estimated fair values allocated to NCDC assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Current assets (including cash acquired of $2,119) $ 3,786 Customer relations 4,359 Deferred tax liabilities, net (828 ) Other long-term assets 2,439 Current liabilities (918 ) Other long-term liabilities (324 ) Goodwill 3,153 Total assets acquired net of acquired cash $ 11,667 |
Acquisition of K.M.T. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition | The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net assets excluding $632 cash acquired $ 197 Intangible assets 9,410 Deferred tax liabilities (1,129 ) Non-controlling interests (3,644 ) Goodwill 9,410 Total assets acquired, net of acquired cash $ 14,244 |
Acquisition of Zebra Technologies Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition | The following table summarizes the provisional estimated fair values (1) Net assets excluding cash acquired $ 3,163 Inventories 4,359 Property, plant and equipment 82 Intangible assets 5,973 Deferred taxes (1,284 ) Other long-term liabilities (37 ) Liabilities in respect of business combinations (7,418 ) Goodwill 5,930 Total assets acquired net of acquired cash $ 10,768 |
Acquisition of Emalogic Software Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition | The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net liabilities excluding cash acquired $ (1,695 ) Property, plant and equipment 161 Intangible assets 3,006 Deferred taxes (692 ) Other long-term liabilities (313 ) Liabilities in respect of business combinations (443 ) Non-controlling interests (749 ) Goodwill 4,619 Total assets acquired net of acquired cash $ 3,894 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | December 31, 2023 2022 Balance nominated in USD $ 217,948 $ 190,457 Balance nominated in NIS 157,725 282,050 Balance nominated in other currencies 76,273 71,835 $ 451,946 $ 544,342 |
Trade Receivables, Net (Tables)
Trade Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Trade Receivables, Net [Abstract] | |
Schedule of Trade Receivables, Net | Trade receivables, net: December 31, 2023 2022 Open accounts $ 574,425 $ 536,534 Checks receivable 14,695 15,260 Current maturities of long-term receivables 146,139 163,175 735,259 714,969 Less - allowance for doubtful accounts (*) 14,251 12,242 Trade receivables, net $ 721,008 $ 702,727 (*) Bad debt expense, net for the years ended December 31, 2023, 2022 and 2021 was $4,532, $3,022 and $1,333 respectively. |
Prepaid Expesnes and Other Ac_2
Prepaid Expesnes and Other Accounts Receivavable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expesnes and Other Accounts Receivavable [Abstract] | |
Schedule of Prepaid Expenses and Other Accounts | The following table summarizes the composition of the Group’s prepaid expenses and other accounts receivable: December 31, 2023 2022 Prepaid expenses and advances to suppliers $ 40,679 $ 42,190 Government authorities 34,687 17,908 Employees 443 430 Related Parties (see Note 17) 256 281 Others 8,605 3,726 $ 84,670 $ 64,535 |
Long-Term Investments and Rec_2
Long-Term Investments and Receivables (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Investments and Receivables [Abstract] | |
Schedule of Long-Term Investments and Receivables | December 31, 2023 2022 Prepaid expenses and deposits $ 14,004 $ 15,173 Investments in financial assets designated at fair value through other comprehensive income 19,737 9,870 Trade receivables and unbilled receivables 7,829 5,379 Financial assets designated at fair value through profit or loss 4,694 4,856 Dividend preference derivative in TSG (see Note 9) 3,000 3,000 Others 2,738 707 $ 52,002 $ 38,985 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurement [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The Group’s financial assets and liabilities measured at fair value on a recurring basis, including accrued interest components, consisted of the following types of instruments as of December 31, 2023 and 2022: Fair value measurements December 31, 2023 Level 1 Level 3 Total Assets: Financial assets at fair value through the other comprehensive income $ 19,450 $ 287 $ 19,737 Financial assets measured at fair value through profit or loss - 4,620 4,620 Dividend preference derivative in TSG (1) - 3,000 3,000 Assets in respect of business combinations - 1,368 1,368 $ 19,450 $ 9,275 $ 28,725 Fair value measurements December 31, 2023 Level 3 Total Liabilities: Put options of non-controlling interests $ 57,867 $ 57,867 Contingent consideration in respect of business combination $ 10,576 $ 10,576 $ 68,443 $ 68,443 Fair value measurements December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Financial assets at fair value through the other comprehensive income $ 9,408 $ - $ 462 $ 9,870 Financial assets measured at fair value through profit or loss 738 - 4,762 5,500 Dividend preference derivative in TSG (1) - - 3,000 3,000 Foreign currency derivative contracts - 109 - 109 $ 10,146 $ 109 $ 8,224 $ 18,479 Fair value measurements December 31, 2022 Level 3 Total Liabilities: Put options of non-controlling interests $ 72,188 $ 72,188 Contingent consideration in respect of business combination 30,635 30,635 $ 102,823 $ 102,823 (1) The fair value of dividend preference derivative in TSG was estimated using the Monte-Carlo simulation technique. |
Schedule of Changes in Financial Assets and Liabilities | Changes in financial assets and liabilities classified in Level 3: Financial assets measured at fair value Financial Liabilities fair value Balance as of January 1, 2022: $ 2,023 $ 95,773 Increase due to acquisitions 462 19,791 Fair value measured for the first time 4,762 7,086 Change in fair value measurements 977 629 Deduction of the contingent consideration - (17,171 ) Other - (3,285 ) Balance as of December 31, 2022 $ 8,224 $ 102,823 Increase due to acquisitions 1,368 8,039 Fair value measured for the first time - 1,594 Change in fair value measurements (175 ) (893 ) Deduction of the contingent consideration - (39,837 ) Other (142 ) (3,283 ) Balance as of December 31, 2023 $ 9,275 $ 68,443 |
Investments in Companies Acco_2
Investments in Companies Accounted for at Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments in Companies Accounted for at Equity Method [Abstract] | |
Schedule of Changes in the Carrying Amount of the Company’s Investment in TSG | The following table summarizes the Group’s investments in companies accounted for at equity: December 31, 2023 2022 TSG (Joint venture) $ 18,998 $ 19,459 Other 1,798 1,287 $ 20,796 $ 20,746 |
Schedule of Investment in TSG Equity Method | The following table summarizes the balances related to the Company’s investment in TSG in the consolidated statements of financial position: December 31, 2023 2022 Investment in companies accounted for at equity method Shares $ 11,073 $ 11,291 Capital note 7,925 8,168 $ 18,998 $ 19,459 Long-term investments and receivables Dividend preference derivative at fair value through profit or loss $ 3,000 $ 3,000 |
Schedule of Fair Value of TSG's Dividend Preference Derivative | The following table summarizes the changes in the fair value of TSG’s dividend preference derivative: December 31, 2023 2022 Opening balance $ 3,000 $ 2,023 Increase in fair value recognized in profit or loss 85 1,221 Currency exchange rate in other comprehensive income (loss) (85 ) (244 ) Closing balance $ 3,000 $ 3,000 |
Schedule of the Following Table Summarizes the Changes in the Carrying Amount of the Company’s Investment in TSG | The following table summarizes the changes in the carrying amount of the Company’s investment in TSG: January 1, 202 1 $ 27,165 Company’s share of profit 340 Company’s share of other comprehensive income 128 December 31, 2021 $ 27,633 Company’s share of profit (2,027 ) Company’s share of other comprehensive income (loss) (3,053 ) Adjustments arising from translating financial statements from functional currency to presentation currency (3,094 ) December 31, 2022 $ 19,459 Company’s share of profit 686 Company’s share of other comprehensive income (loss) (575 ) Adjustments arising from translating financial statements from functional currency to presentation currency (572 ) December 31, 2023 $ 18,998 |
Schedule of Statements of Financial Position of TSG | Summarized statements of financial position of TSG as of December 31, 2023 and 2022: December 31, 2023 2022 Current assets $ 52,354 $ 67,254 Non-current assets 70,385 65,627 Current liabilities (27,394 ) (33,527 ) Non-current liabilities (64,789 ) (69,534 ) Net assets $ 30,556 $ 29,820 Accumulated cost of share-based payment (1,795 ) (1,705 ) Total equity attributed to shareholders $ 28,761 $ 28,115 50 % 50 % Share of equity in TSG 14,381 14,058 Excess of fair value over carrying amount 4,617 5,401 Total investment carrying amount $ 18,998 $ 19,459 |
Schedule of Operating Results of TSG | Summarized operating results of TSG for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, 2023 2022 2021 Revenues $ 79,449 $ 69,714 $ 77,035 Net income (loss) 2,587 (2,780 ) 2,104 Other comprehensive income (loss) 1,236 (6,107 ) 255 Total comprehensive income (loss) $ 3,823 $ (8,887 ) $ 2,359 Company’s share in TSG 50 % 50 % 50 % 1,912 (4,444 ) 1,180 Amortization of excess cost of intangible assets net of tax (608 ) (637 ) (712 ) Company’s share of total comprehensive income (loss) $ 1,305 $ (5,081 ) $ 468 Company’s share of other comprehensive income (loss) 678 (3,053 ) 128 Company’s share of profit (loss) 686 (2,027 ) 340 $ 1,364 $ (5,081 ) $ 468 |
Property, Plants and Equipmen_2
Property, Plants and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plants and Equipment, Net [Abstract] | |
Schedule of Property, Plants and Equipment | Property, plants and equipment, net, are comprised of the following as of the below dates: Computers, Leasehold Motor Software Total Cost Balance at January 1, 2023 $ 139,977 $ 42,816 $ 7,497 $ 2,419 $ 192,709 Initially consolidated company 3,215 2,051 12 25 5,303 Purchases 12,402 3,160 278 463 16,303 Disposals (15,564 ) (3,746 ) (1,990 ) (110 ) (21,410 ) Exchange rate differences from translation of foreign operations (2,970 ) (1,149 ) (235 ) (47 ) (4,401 ) Balance at December 31, 2023 $ 137,060 $ 43,132 $ 5,562 $ 2,750 $ 188,504 Accumulated depreciation: Balance at January 1, 2023 $ 105,874 $ 24,762 $ 4,844 $ 2,258 $ 137,738 Initially consolidated company 2,002 709 3 21 2,735 Depreciation 13,500 4,223 693 97 18,513 Disposals (15,224 ) (3,490 ) (1,488 ) (110 ) (20,312 ) Loss of Control Exchange rate differences from translation of foreign operations (2,201 ) (669 ) (172 ) (59 ) (3,101 ) Balance at December 31,2023 $ 103,951 $ 25,535 $ 3,880 $ 2,207 $ 135,573 Depreciated cost at December 31, 2023 $ 33,109 $ 17,597 $ 1,682 $ 543 $ 52,931 Computers, Leasehold Motor vehicles Software Total Cost Balance at January 1, 2022 $ 145,333 $ 41,911 $ 8,305 $ 2,546 $ 198,095 Entrance to consolidation 4,024 453 351 111 4,939 Purchases 17,298 4,675 368 114 22,455 Disposals (10,735 ) (418 ) (560 ) (25 ) (11,738 ) Loss of Control (684 ) (1,337 ) - - (2,021 ) Exchange rate differences from translation of foreign operations (15,259 ) (2,468 ) (967 ) (327 ) (19,021 ) Balance at December 31, 2022 $ 139,977 $ 42,816 $ 7,497 $ 2,419 $ 192,709 Accumulated depreciation: Balance at January 1, 2022 $ 108,762 $ 25,444 $ 4,673 $ 2,330 $ 141,209 Entrance to consolidation 2,803 388 219 107 3,517 Depreciation 14,709 2,834 909 75 18,527 Disposals (10,287 ) (242 ) (384 ) (23 ) (10,936 ) Loss of Control (308 ) (971 ) - - (1,279 ) Exchange rate differences from translation of foreign operations (9,805 ) (2,691 ) (573 ) (231 ) (13,300 ) Balance at December 31,2022 $ 105,874 $ 24,762 $ 4,844 $ 2,258 $ 137,738 Depreciated cost at December 31, 2022 $ 34,103 $ 18,054 $ 2,653 $ 161 $ 54,971 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets, Net [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net, are comprised of the following as of the below dates: Customer Capitalized Acquired Other Total Cost Balance at January 1, 2023 $ 309,979 $ 283,038 $ 100,337 $ 12,270 $ 705,624 Entrance to consolidation 20,902 - - 1,706 22,608 Purchases - 14,550 962 - 15,512 Disposals - (21 ) - - (21 ) Exchange rate differences from translation of foreign operations (3,779 ) (4,699 ) (324 ) (361 ) (9,163 ) Balance at December 31, 2023 $ 327,102 $ 292,868 $ 100,975 $ 13,615 $ 734,560 Accumulated depreciation: Balance at January 1, 2023 $ 169,567 $ 237,253 $ 71,843 $ 4,235 $ 482,898 Depreciation 27,747 11,634 10,227 1,657 51,265 Disposals - (21 ) - - (21 ) Exchange rate differences from translation of foreign operations (2,400 ) (3,892 ) (123 ) (95 ) (6,510 ) Balance at December 31,2023 $ 194,914 $ 244,974 $ 81,947 $ 5,797 $ 527,632 Depreciated cost at December 31, 2023 $ 132,188 $ 47,894 $ 19,028 $ 7,818 $ 206,928 Customer relationship Capitalized Software costs Acquired technology Other Total Cost Balance at January 1, 2022 $ 307,256 $ 289,506 $ 97,395 $ 12,906 $ 707,063 Entrance to consolidation 26,643 - 6,152 843 33,638 Purchases - 14,732 1,181 - 15,913 Disposals - (415 ) (1,204 ) - (1,619 ) Exchange rate differences from translation of foreign operations (23,920 ) (20,785 ) (3,187 ) (1,479 ) (49,371 ) Balance at December 31, 2022 $ 309,979 $ 283,038 $ 100,337 $ 12,270 $ 705,624 Accumulated depreciation: Balance at January 1, 2022 $ 154,112 $ 243,264 $ 64,381 $ 3,370 $ 465,127 Depreciation 26,668 11,562 9,986 1,285 49,501 Disposals - (416 ) (1,205 ) - (1,621 ) Exchange rate differences from translation of foreign operations (11,213 ) (17,157 ) (1,319 ) (420 ) (30,109 ) Balance at December 31,2022 $ 169,567 $ 237,253 $ 71,843 $ 4,235 $ 482,898 Depreciated cost at December 31, 2022 $ 140,412 $ 45,785 $ 28,494 $ 8,035 $ 222,726 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill [Abstract] | |
Schedule of Carrying Amount of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022: December 31, 2023 2022 Opening balance $ 926,161 $ 932,854 Acquisition of subsidiaries 23,112 52,651 Classifications (2,672 ) (1,502 ) Foreign currency translation adjustments (10,020 ) (57,842 ) Closing balance $ 936,581 $ 926,161 |
Schedule of Perpetual Growth Rates and Discount Rates | The perpetual growth rates and discount rates (corresponding to the weighted average cost of capital – “WACC”) applied for impairment testing purposes in 2023 and 2022 were as follows: 2023 2022 Pre-tax Growth rate Pre-tax Growth rate Matrix IT (1) 10.4%-10.7 % 3 % 9.2%-10.1 % 3 % Sapiens (2) 11 % 3 % 11 % 3 % Magic Software (3) 11.5 % 3 % 11 % 3 % Other consolidated subsidiaries (4) (1) The goodwill allocated to the operating segment Matrix IT is mainly related to two groups of cash-generating units. Cash flows are discounted using weighted pre-tax discount rates that range between 10.4% to 10.7% and a fixed growth rate of 3% in 2023 (2022 - weighted pre-tax discount rates that range between 9.2% to 10.1% and fixed growth rates of 3%). The carrying amount of goodwill allocated to the other groups of cash-generating units included in Matrix IT is immaterial. (2) The goodwill allocated to the operating segment Sapiens is mainly related to two groups of cash-generating units. Cash flows are discounted using a weighted pre-tax discount rate of 11% and a fixed growth rate of 3% in 2023 and 2022. The carrying amount of goodwill allocated to the other groups of cash-generating units included in Sapiens is immaterial. (3) The goodwill allocated to the operating segment Magic Software is related to four groups of cash-generating units. Cash flows are discounted using weighted pre-tax discount rates of 11.5% and a fixed growth rate of 3% in 2023 (2022 - weighted pre-tax discount rates of 11% and fixed growth rates of 3%). (4) Goodwill is allocated across multiple groups of cash-generating units. The carrying amount of goodwill allocated to each group of cash-generating units is immaterial. The Group performed sensitivity analyses regarding the main assumptions in the impairment tests. No impairment of the goodwill tested would be recognized in the event of a reasonably possible change in the assumptions used in 2023 (the same was true for 2022). The Group performed annual impairment tests as of December 31, 2023, 2022 and 2021 and did not identify any impairment losses |
Short Term Loans From Banks a_2
Short Term Loans From Banks and Others (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Short Term Liabilities to Banks and Others [Abstract] | |
Schedule of Short Term Liabilities to Banks and Others | December 31, 2023 Interest rate December 31, (%) Currency 2023 2022 Current maturities of long-term loans from banks and other financial institutions 1.4 - Prime + 1.5 NIS $ 66,356 $ 78,883 Commercial securities not listed Prime -1 NIS 55,142 56,834 Short-term bank loans and credit line 3.4 - 6.8 NIS and USD 9,533 13,168 Current maturities of long-term loans from banks 7.5 – 8.1 NIS Linked to USD 13,208 8,908 Short-term interest on long-term loans from banks and other financial institutions 3.4 – 8.1 NIS and USD 1,734 89 $ 145,973 $ 157,882 |
Other Accounts Payable (Tables)
Other Accounts Payable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Accounts Payable [Abstract] | |
Schedule of Other Accounts Payable | Other accounts payable are comprised of the following as of the below dates: December 31, 202 3 2022 Government institutions $ 42,102 $ 43,955 Accrued expenses and other current liabilities 31,022 42,385 $ 73,124 $ 86,340 |
Long Term Loans From Banks an_2
Long Term Loans From Banks and Others (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long Term Liabilities to Banks and Others [Abstract] | |
Schedule of Long Term Loans From Banks and Others | Long term liabilities to banks and others are comprised of the following as of the below dates: Long-term Current Long-term long-term Interest rate % Currency December 31, 2023 December 31, 2022 1.4 - Prime + 1.5 NIS (Unlinked) $ 122,951 $ 66,356 $ 56,595 $ 88,532 7.5-8.1 USD (Unlinked) 47,500 13,208 34,292 27,342 $ 170,451 $ 79,564 $ 90,887 $ 115,874 |
Schedule of Long Term Liabilities to Banks and Others Maturity Dates | Maturity dates: December 31, 202 3 2022 First year (current maturities) $ 79,564 $ 87,791 Second year 47,859 67,956 Third year 21,864 32,430 Fourth year 17,281 9,998 Fifth year and thereafter 3,883 5,490 $ 170,451 $ 203,665 |
Debentures (Tables)
Debentures (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debentures [Abstract] | |
Schedule of Debentures | Debentures are comprised of the following as of the below dates: Effective Par value in Par Value Unamortized Current Total Short-term Total short- % Currency (thousand) December 31, 2023 Formula’s Series A Secured Debentures (2.8%) 2.4 NIS (Unlinked) NIS 34,211 $ 9,432 $ 22 $ 9,432 $ - $ 154 $ 9,586 Formula’s Series C Secured Debentures (2.3%) 2.7 NIS (Unlinked) NIS 412,264 $ 113,665 (932 ) 22,327 90,405 213 112,945 Sapiens’ Series B Debentures (3.37%) 3.3 NIS (Linked to fix rate of USD) NIS 210,000 $ 59,389 (50 ) 19,796 39,543 - 59,339 Matrix IT’ Series B Debentures (4.1%) 4.5 NIS (Unlinked) NIS 441,656 $ 121,769 (1,450 ) 18,726 101,593 2,237 122,556 $ 304,255 $ (2,410 ) $ 70,281 $ 231,541 $ 2,604 $ 304,426 Effective Par value in Par Value Unamortized and costs, net Current Total Short-term Total % Currency (thousand) December 31, 2022 Formula’s Series A Secured Debentures (2.8%) 2.4 NIS (Unlinked) NIS 68,422 $ 19,444 $ 85 $ 9,722 $ 9,807 $ - $ 19,529 Formula’s Series C Secured Debentures (2.3%) 2.7 NIS (Unlinked) NIS 493,244 $ 140,166 (1,477 ) 23,012 115,677 265 138,954 Sapiens’ Series B Debentures (3.37%) 3.3 NIS (Linked to fix rate of USD) NIS 280,000 $ 79,186 (114 ) 19,796 59,276 1,337 80,409 Matrix IT’ Series B Debentures (4.1%) 4.5 NIS (Unlinked) NIS 475,615 $ 135,156 (1,343 ) 9,650 124,163 1,220 135,033 $ 373,952 $ (2,849 ) $ 62,180 $ 308,923 $ 2,822 $ 373,925 |
Schedule of Aggregate Principal Annual Payments of Debentures | Scheduled aggregate principal annual payments of the debentures: Repayment amount 2024 $ 70,281 2025 84,191 2026 84,192 2027 18,726 2028 46,865 $ 304,255 |
Related Parties Transactions (T
Related Parties Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure of related party [Abstract] | |
Schedule of Recognized as an Expense During the Reporting Period Related to Officers and Directors | The following amounts disclosed in the table are recognized as an expense during the reporting period related to officers and directors of the Company: Year ended December 31, 2023 2022 Short-term employee benefits $ 4,204 $ 4,665 Share-based compensation 7,197 8,104 $ 11,401 $ 12,769 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure of leases [Abstract] | |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases | Maturity analysis of undiscounted future lease payments receivable for operating leases: 2024 $ 45,871 2025 36,524 2026 13,448 2027 12,477 2028 12,419 2029 and thereafter 25,601 Total undiscounted cash flows $ 146,340 Less imputed interest (17,637 ) Present value of lease liabilities $ 128,703 |
Schedule of Information on Leases | Information on leases: Year ended December 31, 2023 2022 Interest expense on lease liabilities $ 7,195 $ 4,822 Total cash outflow for leases $ 55 ,064 $ 49,702 |
Schedule of Right-of-Use Assets | Disclosures in respect of right-of-use assets: Land and buildings Motor vehicles Total Cost: Balance as of January 1, 2023 $ 179,617 $ 50,252 $ 229,869 Additions during the year: New leases 38,376 23,092 61,468 Adjustments for indexation 1,573 418 1,991 Adjustments arising from translating financial statements of foreign operations (2,111 ) (814 ) (2,925 ) Modification of leases (3,590 ) 66 (3,524 ) Acquisition of subsidiaries 265 - 265 Disposals during the year: Termination of leases (18,323 ) (11,182 ) (29,505 ) Balance as of December 31, 2023 $ 195,807 $ 61,832 $ 257,639 Accumulated depreciation: Balance as of January 1, 2023 $ 88,429 $ 24,600 $ 113,029 Additions during the year: Depreciation 34,135 17,919 52,054 Adjustments arising from translating financial statements of foreign operations 24 (7 ) 17 Disposals during the year: Termination of leases (17,874 ) (10,238 ) (28,112 ) Balance as of December 31, 2023 104,714 32,274 136,988 Depreciated cost at December 31, 2023 $ 91,093 $ 29,558 $ 120,651 Land and buildings Motor vehicles Total Cost: Balance as of January 1, 2022 $ 173,450 $ 54,036 $ 227,486 Additions during the year: New leases 30,711 22,483 53,194 Adjustments for indexation 2,438 1,017 3,455 Adjustments arising from translating financial statements of foreign operations (15,571 ) (5,471 ) (21,042 ) Modification of leases 589 89 678 Acquisition of subsidiaries 2,714 40 2,754 Disposals during the year: Termination of leases (14,714 ) (21,942 ) (36,656 ) Balance as of December 31, 2022 $ 179,617 $ 50,252 $ 229,869 Accumulated depreciation: Balance as of January 1, 2022 $ 77,669 $ 33,984 $ 111,653 Additions during the year: Depreciation 31,387 15,893 47,280 Adjustments arising from translating financial statements of foreign operations (6,902 ) (3,416 ) (10,318 ) Disposals during the year: Termination of leases (13,725 ) (21,861 ) (35,586 ) Balance as of December 31, 2022 88,429 24,600 113,029 Depreciated cost at December 31, 2022 $ 91,188 $ 25,652 $ 116,840 |
Employee Option Plans (Tables)
Employee Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of Share-Based Compensation Expense Resulting from Stock Options Grants | The following table sets forth the breakdown of share-based compensation expense resulting from such grants, as included in the consolidated statements of profit or loss: Year ended December 31, 2023 2022 2021 General and administrative expenses $ 18,622 $ 14,953 $ 14,767 $ 18,622 $ 14,953 $ 14,767 |
Schedule of Options Outstanding Separated into Ranges of Exercise Price and Exercise Price Categories | The options outstanding as of December 31, 2023, have been separated into exercise price categories, as follows: Ranges of Exercise Options Weighted Options Weighted average of exercisable options $ (Years) $ 0.28 3,238 6.92 1,736 0.28 455 297 6.99 111 455 1,822 493 6.99 - - 4,028 6.94 1,847 $ 27.72 |
Schedule of the RSU Activities | A summary of the RSU activities in Sapiens in the year ended on December 31, 2023, is as follows: Weighted Average Amount of Grant-Date Fair options value Unvested at January 1, 2023 139,144 $ 26.56 Granted 7,500 19.96 Vested (34,329 ) 24.47 Expired and forfeiture (39,492 ) 24.56 Unvested at December 31, 2023 72,823 $ 27.95 |
Matrix [Member] | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of Matrix IT's Employee Stock-Based Compensation Activity | The following table summarizes Matrix IT’s employee stock-based compensation activity during the year ended December 31, 2023: Number of options, RSU and RS Weighted average exercise Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2023 398,878 7.66 0.9 5,144 Granted 1,340,000 14.17 5 8,363 Expired and forfeited (45,000 ) 19.68 Exercised (398,878 ) 7.66 5,135 Outstanding at December 31, 2023 1,295,000 13.6 4.16 7,336 Exercisable at December 31, 2023 - - - - |
Sapiens [Member] | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of Sapiens' Stock-Based Compensation Activity | The following table summarizes Sapiens’ stock-based compensation activity during the year ended December 31, 2023: Amount of Weighted average exercise price Weighted average Aggregate Outstanding at January 1, 2023 2,132,763 21.51 3.30 5,531 Granted 429,500 21.09 Exercised (558,695 ) 9.54 Expired and forfeited (58,068 ) 14.59 Outstanding at December 31, 2023 1,945,500 24.52 3.71 9,118 Exercisable at December 31, 2023 796,425 24.78 3.13 3,604 |
Schedule of Options Outstanding Separated into Ranges of Exercise Price and Exercise Price Categories | The options outstanding under Sapiens’ stock option plans as of December 31, 2023 have been separated into ranges of exercise price as follows: Ranges of exercise Options Weighted Average Weighted Options Weighted Average $ (Years) $ $ 8.49 15,000 0.60 8.49 15,000 8.49 9.49-13.88 52,000 1.36 11.49 52,000 11.49 18.26-22.03 816,500 4.86 20.00 188,425 20.93 22.71-27.28 271,250 2.77 23.43 182,500 22.69 28.6-31.06 723,750 3.29 28.95 325,000 29.12 33.48 67,000 3.92 33.48 33,500 33.48 1,945,500 3.71 24.52 796,425 24.78 |
Magic Software [Member] | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of the RSU Activities | Number of options Weighted Weighted average (in years) Aggregate Outstanding at January 1, 2023 26,250 $ 0.91 5.95 $ 397 Granted - - Forfeited (20,000 ) 3.51 Exercised (6,250 ) - Outstanding at December 31, 2023 - $ - - $ - Exercisable at December 31, 2023 - $ - - $ - Number of options Weighted Weighted (in years) Aggregate Outstanding at January 1, 2023 4,028 $ 264.67 7.94 $ 7,499 Granted - Outstanding at December 31, 2023 4,028 256.79 6.94 7,276 Exercisable at December 31, 2023 1,847 $ 27.72 6.93 $ 3,760 |
Employee Benefit Liabilities (T
Employee Benefit Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Matrix [Member] | |
Employee Benefit Liabilities (Tables) [Line Items] | |
Schedule of Defined Benefit Plans | Composition of defined benefit plans is as follows: December 31, 2023 2022 Defined benefit obligation $ 85,743 $ 91,973 Fair value of plan assets (75,316 ) (82,857 ) Net defined benefit liability $ 10,427 $ 9,116 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | |
Schedule of Composition of Pledged Shares | Composition of pledged shares of Matrix IT, Magic Software and Sapiens owned by Formula as of December 31, 2023: December 31, 2023 Formula’s Series A Secured Debentures Formula’s Series C Secured Debentures Matrix IT ordinary shares, par value NIS 1.0 per share 4,128,865 6,169,761 Magic Software ordinary shares, par value NIS 0.1 per share 5,825,681 3,141,474 Sapiens common shares, par value €0.01 per share 1,260,266 2,957,590 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination, Significant Transaction and Sale of Business [Abstract] | |
Schedule of Share Capital | The composition of the Company’s share capital is as follows: December 31, 2023 December 31, 2022 Authorized Issued Outstanding Authorized Issued Outstanding Ordinary shares, NIS 1 par value each 25,000,000 15,901,287 15,332,667 25,000,000 15,886,287 15,317,667 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax [Abstract] | |
Schedule of Consolidated Statements of Financial Position | Presentation in consolidated statements of financial position December 31, 2023 2022 Deferred taxes assets $ 46,856 $ 42,027 Deferred tax liabilities (59,206 ) (59,465 ) $ (12,350 ) $ (17,438 ) |
Schedule of Composition | Composition December 31, 2023 2022 Net operating losses carried forward $ 13,744 $ 10,296 Intangibles, fixed asset and right-of-use assets (36,021 ) (39,307 ) Lease liability 767 (166 ) Differences in measurement basis (cash basis for tax purposes) 377 2,213 Other 8,783 9,526 $ (12,350 ) $ (17,438 ) |
Schedule of Pre-Tax Income | Pre-tax income: Year ended December 31, 2023 2022 2021 Domestic (Israel) $ 126,360 $ 181,953 $ 137,213 Foreign 84,674 47,757 46,798 Total $ 211,034 $ 256,710 $ 184,011 |
Schedule of income tax (tax benefit) | Income tax (tax benefit) consist of the following: Year ended December 31, 2023 2022 2021 Current taxes $ 54,743 $ 75,407 $ 52,956 Deferred taxes (8,668 ) (20,172 ) (10,342 ) Total $ 46,075 $ 55,235 $ 42,614 |
Schedule of Consolidated Statements of Profit or Loss | The following table presents reconciliation between the theoretical tax expense, assuming that all income was taxed at statutory tax rates, and the actual income tax expense, as recorded in the Group’s consolidated statements of profit or loss: Year ended December 31, 2023 2022 2021 Income before income taxes, as per the statement of operations $ 211,034 $ 256,710 $ 184,011 Statutory tax rate in Israel 23 % 23 % 23 % Tax computed at the statutory tax rate 48,538 59,043 42,323 Non-deductible expenses (non-taxable income) net and tax-deductible costs not included in the accounting costs 3,705 720 3,667 Effect of different tax rates (874 ) (1,273 ) 852 Release of trapped earnings (see Note 23(a)(2) - 711 3,531 Effect of “Approved, Beneficiary or Preferred Enterprise” status (1,907 ) (5,579 ) (7,338 ) Deferred taxes on current losses (utilization of carry forward losses) and temporary differences for which a valuation allowance was provided, net (2,070 ) 448 (84 ) Undistributed earnings (260 ) (461 ) - Taxes in respect of prior years 558 890 891 Uncertain tax positions (2,293 ) 3,065 401 Other 678 (2,329 ) (1,629 ) Taxes on income $ 46,075 $ 55,235 $ 42,614 |
Schedule of Total Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of total unrecognized tax benefits in Formula’s subsidiaries is as follows: Balance as of January 1, 2022 $ 10,540 Decrease in tax positions (1,042 ) Increase in tax positions 4,455 Statue limitation (1,012 ) Balance as of December 31, 2022 $ 12,941 Decrease in tax positions (1,556 ) Increase in tax positions 1,573 Statue limitation (2,115 ) Balance as of December 31, 2023 $ 10,843 |
Supplementary Financial State_2
Supplementary Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Supplementary Financial Statement Information [Abstract] | |
Schedule of Non-Controlling Interest in Material Partially-Owned Subsidiaries | Composition of non-controlling interest in material partially - December 31, 2023 2022 Matrix IT and its subsidiaries $ 176,092 $ 155,886 Sapiens and its subsidiaries 341,124 316,319 Magic Software and its subsidiaries 162,395 151,253 Other 2,812 1,291 $ 682,423 $ 625,049 |
Schedule of Revenue by Products and Services | (1) Revenue by products and services was as follows: Year ended 2023 2022 2021 Proprietary software and related services $ 693,426 $ 659,470 $ 632,986 Other products and third party 503,327 494,344 472,045 Services 1,424,150 1,418,543 1,299,345 $ 2,620,903 $ 2,572,357 $ 2,404,376 |
Schedule of Revenue by Timing of Revenue Recognition | b.(2) Revenue by timing of revenue recognition was as follows: Year ended 2023 2022 2021 Products and services transferred over time $ 2,246,470 $ 2,251,416 $ 2,072,841 Products transferred at a point in time 374,433 320,941 331,535 $ 2,620,903 $ 2,572,357 $ 2,404,376 |
Schedule of Selling, Marketing, General and Administrative Expenses | Selling, marketing, general and administrative expenses: Year ended December 31, 2023 2022 2021 Wages and related expenses $ 223,351 $ 214,118 $ 200,435 Depreciation and amortization 51,632 49,556 46,479 Subcontractors 11,271 11,701 10,746 Advertising 16,959 19,412 15,598 Maintenance and other expenses 23,162 23,169 16,727 Total Selling, marketing, general and $ 326,375 $ 317,956 $ 289,985 |
Schedule of Financial Income and Expenses | The following table provides detailed breakdown of the Group’s financial income and expenses: Year ended December 31, 2023 2022 2021 Financial expenses: Financial expenses related to liabilities in respect of business combinations $ 775 $ 1,081 $ 3,539 Interest expenses on loans and borrowings 18,540 9,837 6,249 Financial costs related to Debentures 3,928 3,775 6,948 Interest expenses attributed to IFRS 16 7,195 4,822 4,873 Derivatives loss 2,991 1,193 - Bank charges, negative foreign exchange differences and other financial expenses 8,705 6,508 8,385 $ 42,134 $ 27,216 $ 29,994 Year ended December 31, 2023 2022 2021 Financial income: Income from marketable securities and embedded derivative $ - $ - $ 3,338 PPP loan forgiveness - 1,465 - Interest income from deposits, positive foreign exchange differences and other financial income 13,800 5,821 2,651 13,800 7,286 5,989 Financial expenses, net $ 28,334 $ 19,930 $ 24,005 |
Schedule of Property and Equipment Located | The Group’s property and equipment is located as follows: December 31, 2023 2022 Israel $ 44,145 $ 45,994 United States 4,369 3,563 Europe 1,102 1,834 Japan 144 153 Other 3,171 3,427 Total $ 52,931 $ 54,971 |
Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) | The Group’s revenues classified by geographic area (based on the location of customers) are as follows: Year ended December 31, 2023 2022 2021 Israel $ 1,600,763 $ 1,571,035 $ 1,506,566 International: United States 644,918 680,325 591,794 Europe 315,081 262,303 255,680 Africa 26,035 26,692 18,012 Japan 11,881 11,333 12,890 Other (mainly Asia pacific) 22,225 20,669 19,434 Total $ 2,620,903 $ 2,572,357 $ 2,404,376 |
Schedule of Computation of Basic and Diluted Net Earnings Per Share | The following table presents the computation of basic and diluted net earnings per share for the Group: Year ended December 31, 2023 2022 2021 Numerator Basic earnings per share – net income attributable to equity holders of the Company $ 64,014 $ 81,393 $ 54,585 Diluted earnings per share – net income attributable to equity holders of the Company $ 63,878 $ 80,794 $ 53,974 Denominator: Basic earnings per share – weighted average shares outstanding 15,301 15,296 15,290 Effect of dilutive securities 197 207 114 Diluted earnings per share – adjusted weighted average shares outstanding 15,498 15,503 15,404 Basic net earnings per share 4.19 5.31 3.57 Diluted net earnings per share 4.12 5.21 3.50 |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Operating Segments [Abstract] | |
Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries | Consolidated Goodwill in material partially owned subsidiaries December 31, 2023 2022 Matrix IT and its subsidiaries $ 285,596 $ 288,235 Sapiens and its subsidiaries 401,699 397,613 Magic Software and its subsidiaries 166,065 158,699 Michpal and its subsidiaries 44,108 40,603 ZAP and its subsidiaries 32,186 33,081 Other consolidated subsidiaries 6,927 7,930 $ 936,581 $ 926,161 |
Schedule of Reporting on Operating Segments | Matrix IT Sapiens Magic Michpal ZAP Other Adjustments Total Year ended December 31, 2023: Revenues from external customers $ 1,416,283 $ 514,584 $ 531,415 $ 36,912 $ 45,286 $ 156,662 $ (80,239 ) $ 2,620,903 Inter-segment revenues 3,579 - 3,637 - - 525 (7,741 ) - Total revenues $ 1,419,862 $ 514,584 $ 535,052 $ 36,912 $ 45,286 $ 157,187 $ (87,980 ) $ 2,620,903 Depreciation and amortization $ 55,230 $ 30,147 $ 20,553 $ 4,801 $ 8,090 $ 7,950 (5,582 ) 121,189 Segment operating income $ 106,831 $ 80,070 $ 57,108 $ 6,366 $ (3,126 ) $ 9,492 $ (6,896 ) $ 249,845 Unallocated corporate expenses (10,477 ) Total operating income $ 239,368 Financial expenses, net (28,334 ) Group’s share of profits of companies accounted for at equity, net 773 Taxes on income (46,075 ) Net income $ 165,732 Matrix IT Sapiens Magic Michpal ZAP Other Adjustments Total Year ended December 31, 2022: Revenues from external customers $ 1,388,508 $ 474,736 $ 561,682 $ 37,714 $ 49,893 $ 133,526 $ (73,702 ) $ 2,572,357 Inter-segment revenues 4,310 - 5,110 309 - 360 (10,089 ) - Total revenues $ 1,392,818 $ 474,736 $ 566,792 $ 38,023 $ 49,893 $ 133,886 $ (83,791 ) $ 2,572,357 Depreciation and amortization $ 48,288 $ 33,050 $ 19,804 $ 4,770 $ 7,976 $ 6,214 (4,794 ) 115,308 Segment operating income $ 149,298 $ 66,164 $ 61,762 $ 8,117 $ (1,042 ) $ 8,311 $ (5,345 ) $ 287,265 Unallocated corporate expenses (10,625 ) Total operating income $ 276,640 Financial expenses, net (19,930 ) Group’s share of profits of companies accounted for at equity, net (1,808 ) Taxes on income (55,235 ) Net income $ 199,667 Matrix IT Sapiens Magic Michpal ZAP Other Adjustments Total Year ended December 31, 2021: Revenues from external customers $ 1,344,088 $ 461,035 $ 477,643 $ 32,087 $ 51,640 $ 127,641 $ (89,758 ) $ 2,404,376 Inter-segment revenues 6,529 - 2,682 - - - (9,211 ) - Total revenues $ 1,350,617 $ 461,035 $ 480,325 $ 32,087 $ 51,640 $ 127,641 $ (98,969 ) $ 2,404,376 Depreciation and amortization $ 45,736 $ 45,732 $ 19,837 $ 4,023 $ 7,486 $ 3,776 $ (4,406 ) $ 122,184 Segment operating income $ 102,054 $ 44,210 $ 59,785 $ 6,838 $ 5,962 $ 3,841 $ (3,519 ) $ 219,171 Unallocated corporate expenses (11,155 ) Total operating income $ 208,016 Financial expenses, net (24,005 ) Group’s share of profits of companies accounted for at equity, net 505 Taxes on income (42,614 ) Net income $ 141,902 |
General (Details)
General (Details) | Dec. 31, 2023 ₪ / shares |
Formula Systems (1985) Ltd [Member] | |
General [Line Items] | |
Ordinary shares, par value | ₪ 1 |
General (Details) - Schedule of
General (Details) - Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated | Dec. 31, 2023 | Dec. 31, 2022 | |
Matrix IT [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 48.21% | 48.69% | |
Sapiens [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 43.63% | 44.10% | |
Magic Software [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 46.71% | 46.26% | |
Insync [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 90.09% | 90.09% | |
Michpal [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 100% | 100% | |
TSG [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | [1] | 50% | 50% |
Ofek [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 80% | 80% | |
ZAP Group [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 100% | 100% | |
Shamrad [Member] | |||
Schedule of Ownership of the Company’s Eight Directly Held Subsidiaries and One Jointly Controlled Entity Directly Held as of the Dates Indicated [Line Items] | |||
Percentage of ownership | 100% | 100% | |
[1]TSG’s results of operations are reflected in the Company’s results of operations using the equity method of accounting. |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies (Details) [Line Items] | |||
Deposits amount | $ 76,000 | ||
Aggregate amount | $ 2,319,937 | ||
Percentage of performance obligations | 66.20% | ||
Severance expenses | $ 47,076 | $ 51,897 | $ 48,331 |
Short-Term Deposits [Member] | |||
Accounting Policies (Details) [Line Items] | |||
Interest rate | 1.78% | ||
Matrix [Member] | |||
Accounting Policies (Details) [Line Items] | |||
Ordinary shares percentage | 48.21% | ||
Description of governing bodies | Matrix’s board of directors is composed of 5 members, 2 of whom are external directors as required by the Israeli Companies Law, 5759-1999, another one of whom is an independent director, while the remaining two directors are associated with Formula, including Formula’s chief executive officer who serves as the chairman of Matrix’s board of directors. | ||
Description of voting rights | the Company, only two shareholders (both Israeli institutional investors) held more than 5% of Matrix’s voting power during the reporting period (one holding approximately 10.3% and the second one holding approximately 5%); there is no evidence that any of the shareholders has or had granted to any other shareholder a voting proxy at the general meeting; over the last three years (i.e., 2021-2023), Matrix’s general meetings were attended by shareholders representing in aggregate between 79% -83% of total voting rights. This means that the level of activity of the company’s shareholders is relatively moderate. Bearing in mind that the company presently holds approx. 48.21% of total voting rights, the attendance from shareholders would have to be higher than 96.42% in order to deprive Formula of an absolute majority of votes at the general meeting. | ||
Magic [Member] | |||
Accounting Policies (Details) [Line Items] | |||
Ordinary shares percentage | 46.71% | ||
Description of voting rights | the Company’s controlling shareholder, held as of December 31, 2023 more than 5% of the voting rights. There is no evidence that any shareholder has or had granted to any other shareholder a voting proxy at the general meeting; and, over the last three years (i.e., 2021-2023), Sapiens’ general meetings were attended by shareholders representing in total between 81%-84% the total voting power, including the Company’s voting power. This fact indicates that public shareholder participation is not considerably high and in order to have a majority against the company potential 43.63% voting rights there will be needed at least 87.26% of all shareholder votes that participating in each of the annual shareholders’ meeting. | ||
Sapiens [Member] | |||
Accounting Policies (Details) [Line Items] | |||
Description of voting rights | there were two financial Israeli institutional shareholders holding more than 5% of Magic Software’s voting rights, holding 6.97% and 10.7% as of 31 December, 2023; there is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting; and, over the last three years from (i.e., 2021-2023), Magic Software’s general meetings were attended by shareholders representing between 84.7%-86.7%. of the total voting rights. This fact indicates that public shareholder participation is not considerably high and in order to have a majority against the company potential 46.71% there will be needed at least 93.43% of all shareholder votes that participating in each of the annual shareholders’ meeting. Therefore, it is management’s opinion that despite the lack of an absolute majority of shares in Magic Software |
Accounting Policies (Details) -
Accounting Policies (Details) - Schedule of Amortization Periods of the Right-of-Use Assets | 12 Months Ended |
Dec. 31, 2023 | |
Land and buildings [member] | |
Schedule of Amortization Periods of the Right-of-Use Assets [Line Items] | |
Amortization periods of the right-of-use assets | 3 years |
Land and buildings [member] | Minimum [Member] | |
Schedule of Amortization Periods of the Right-of-Use Assets [Line Items] | |
Amortization periods of the right-of-use assets | 2 years |
Land and buildings [member] | Maximum [Member] | |
Schedule of Amortization Periods of the Right-of-Use Assets [Line Items] | |
Amortization periods of the right-of-use assets | 23 years |
Motor vehicles [member] | |
Schedule of Amortization Periods of the Right-of-Use Assets [Line Items] | |
Amortization periods of the right-of-use assets | 3 years |
Motor vehicles [member] | Minimum [Member] | |
Schedule of Amortization Periods of the Right-of-Use Assets [Line Items] | |
Amortization periods of the right-of-use assets | 2 years |
Motor vehicles [member] | Maximum [Member] | |
Schedule of Amortization Periods of the Right-of-Use Assets [Line Items] | |
Amortization periods of the right-of-use assets | 3 years |
Accounting Policies (Details)_2
Accounting Policies (Details) - Schedule of Useful Life of the Assets at Annual Rates | 12 Months Ended |
Dec. 31, 2023 | |
Computers, software, and peripheral equipment [Member] | Bottom of range [member] | |
Schedule of Useful Life of the Assets at Annual Rates [Line Items] | |
Useful life of the assets at annual rates | 20% |
Computers, software, and peripheral equipment [Member] | Top of range [member] | |
Schedule of Useful Life of the Assets at Annual Rates [Line Items] | |
Useful life of the assets at annual rates | 33% |
Office furniture and equipment [Member] | |
Schedule of Useful Life of the Assets at Annual Rates [Line Items] | |
Useful life of the assets at annual rates, description | 6 – 33 (mainly 7) |
Motor vehicles [member] | |
Schedule of Useful Life of the Assets at Annual Rates [Line Items] | |
Useful life of the assets at annual rates, description | 13 – 15 (mainly 15) |
Accounting Policies (Details)_3
Accounting Policies (Details) - Schedule of Useful Life of Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Patents [Member] | |
Schedule of Useful Life of Intangible Assets [Line Items] | |
Useful life of intangible assets | 10 years |
Bottom of range [member] | Customer relationship, backlog and distribution rights [Member] | |
Schedule of Useful Life of Intangible Assets [Line Items] | |
Useful life of intangible assets | 1 year |
Bottom of range [member] | Acquired technology [Member] | |
Schedule of Useful Life of Intangible Assets [Line Items] | |
Useful life of intangible assets | 2 years |
Top of range [member] | Customer relationship, backlog and distribution rights [Member] | |
Schedule of Useful Life of Intangible Assets [Line Items] | |
Useful life of intangible assets | 15 years |
Top of range [member] | Acquired technology [Member] | |
Schedule of Useful Life of Intangible Assets [Line Items] | |
Useful life of intangible assets | 8 years |
Business Combination, Signifi_3
Business Combination, Significant Transaction and Sale of Business (Details) ₪ in Thousands, $ in Thousands | 12 Months Ended | ||||||||||
Jun. 22, 2023 USD ($) | Jun. 22, 2023 ILS (₪) | Jun. 08, 2023 USD ($) | Jun. 08, 2023 ILS (₪) | Jan. 01, 2023 USD ($) | Jan. 01, 2023 ILS (₪) | Dec. 31, 2023 USD ($) | Dec. 04, 2023 | Jun. 22, 2023 ILS (₪) | Jun. 08, 2023 ILS (₪) | Jan. 01, 2023 ILS (₪) | |
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | |||||||||||
Acquired cash | $ 3,894 | ₪ 14,409 | ₪ 38,034 | ||||||||
Paid in cash | $ 1,063 | ||||||||||
Closing acquired cash | 638 | ||||||||||
Payment | 523 | ||||||||||
Acquisition related costs | 81 | ||||||||||
Percentage of share capital | 75% | 75% | 60% | 60% | |||||||
Total consideration paid | $ 6,422 | ₪ 23,762 | $ 14,875 | ₪ 55,039 | |||||||
Contingent consideration recognized of acquisition date | ₪ | ₪ 60,000 | ||||||||||
Fair value consideration | 1,400 | ||||||||||
Share capital (in New Shekels) | ₪ | ₪ 53,086 | ||||||||||
Purchase cost | $ 10,557 | ||||||||||
Net of deferred tax | 4,627 | 16,200 | |||||||||
Goodwill | $ 5,930 | ₪ 20,900 | |||||||||
Percentage of interest | 25% | 25% | |||||||||
Fair value of measured on the acquisition date | $ 1,658 | ₪ 6,133 | |||||||||
Acquisition of NCDC S.A [Member] | |||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | |||||||||||
Percentage of subsidiary outstanding shares | 100% | ||||||||||
Purchase price amount in cash | 11,667 | ||||||||||
Acquired cash | 10,179 | ||||||||||
Acquisition related costs | $ 325 | ||||||||||
Technologies Communication Computer Ltd [Member] | |||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | |||||||||||
Contingent consideration recognized of acquisition date | $ 15,000 | ||||||||||
Fair value consideration | ₪ | ₪ 5,000 | ||||||||||
Acquisition of Zebra Technologies Ltd. [Member] | |||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | |||||||||||
Percentage of share capital | 70% | 70% | |||||||||
Purchase cost | ₪ | ₪ 37,100 | ||||||||||
Zap Group acquisition [Member] | |||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | |||||||||||
Acquired cash | $ 10,768 | ||||||||||
Share capital | $ 15,085 |
Business Combination, Signifi_4
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition - Acquisition of NCDC S.A [Member] $ in Thousands | Dec. 31, 2023 USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition [Line Items] | |
Current assets (including cash acquired of $2,119) | $ 3,786 |
Customer relations | 4,359 |
Deferred tax liabilities, net | (828) |
Other long-term assets | 2,439 |
Current liabilities | (918) |
Other long-term liabilities | (324) |
Goodwill | 3,153 |
Total assets acquired net of acquired cash | $ 11,667 |
Business Combination, Signifi_5
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition (Parentheticals) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Acquisition of NCDC S.A [Member] | |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition (Parentheticals) [Line Items] | |
Cash acquired | $ 2,119 |
Business Combination, Signifi_6
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition $ in Thousands | Dec. 31, 2023 USD ($) |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition [Abstract] | |
Net assets excluding $632 cash acquired | $ 197 |
Intangible assets | 9,410 |
Deferred tax liabilities | (1,129) |
Non-controlling interests | (3,644) |
Goodwill | 9,410 |
Total assets acquired, net of acquired cash | $ 14,244 |
Business Combination, Signifi_7
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition (Parentheticals) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition [Abstract] | |
Cash acquired | $ 632 |
Business Combination, Signifi_8
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition - Acquisition of RDT Equipment and Systems (1993) Ltd [Member] $ in Thousands | Dec. 31, 2023 USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition [Line Items] | |
Net assets excluding cash acquired | $ 3,163 |
Inventories | 4,359 |
Property, plant and equipment | 82 |
Intangible assets | 5,973 |
Deferred taxes | (1,284) |
Other long-term liabilities | (37) |
Liabilities in respect of business combinations | (7,418) |
Goodwill | 5,930 |
Total assets acquired net of acquired cash | $ 10,768 |
Business Combination, Signifi_9
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition - Acquisition of I.T.D. Group Ltd. [Member] $ in Thousands | Dec. 31, 2023 USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities at the Date of Acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (1,695) |
Property, plant and equipment | 161 |
Intangible assets | 3,006 |
Deferred taxes | (692) |
Other long-term liabilities | (313) |
Liabilities in respect of business combinations | (443) |
Non-controlling interests | (749) |
Goodwill | 4,619 |
Total assets acquired net of acquired cash | $ 3,894 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - Schedule of Cash and Cash Equivalents - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents (Details) - Schedule of Cash and Cash Equivalents [Line Items] | ||
Balance nominated in currencies | $ 451,946 | $ 544,342 |
USD [Member] | ||
Cash and Cash Equivalents (Details) - Schedule of Cash and Cash Equivalents [Line Items] | ||
Balance nominated in currencies | 217,948 | 190,457 |
NIS [Member] | ||
Cash and Cash Equivalents (Details) - Schedule of Cash and Cash Equivalents [Line Items] | ||
Balance nominated in currencies | 157,725 | 282,050 |
Other currencies [Member] | ||
Cash and Cash Equivalents (Details) - Schedule of Cash and Cash Equivalents [Line Items] | ||
Balance nominated in currencies | $ 76,273 | $ 71,835 |
Trade Receivables, Net (Details
Trade Receivables, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Trade Receivables, Net [Abstract] | |||
Bad debt expense, net | $ 4,532 | $ 3,022 | $ 1,333 |
Trade Receivables, Net (Detai_2
Trade Receivables, Net (Details) - Schedule of Trade Receivables, Net ₪ in Thousands, $ in Thousands | Dec. 31, 2023 USD ($) | Dec. 31, 2023 ILS (₪) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 ILS (₪) | |
Schedule of Trade Receivables, Net [Abstract] | |||||
Open accounts | ₪ 574,425 | ₪ 536,534 | |||
Checks receivable | $ 12,350 | 14,695 | $ 17,438 | 15,260 | |
Current maturities of long-term receivables | 146,139 | 163,175 | |||
Total | 735,259 | 714,969 | |||
Less - allowance for doubtful accounts | [1] | 14,251 | 12,242 | ||
Trade receivables, net | ₪ 721,008 | ₪ 702,727 | |||
[1] Bad debt expense, net for the years ended December 31, 2023, 2022 and 2021 was $4,532, $3,022 and $1,333 respectively. |
Prepaid Expesnes and Other Ac_3
Prepaid Expesnes and Other Accounts Receivavable (Details) - Schedule of Prepaid Expenses and Other Accounts - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Prepaid Expenses and Other Accounts [Abstract] | ||
Prepaid expenses and advances to suppliers | $ 40,679 | $ 42,190 |
Government authorities | 34,687 | 17,908 |
Employees | 443 | 430 |
Related Parties (see Note 17) | 256 | 281 |
Others | 8,605 | 3,726 |
Total prepaid expenses and other accounts receivable | $ 84,670 | $ 64,535 |
Long-Term Investments and Rec_3
Long-Term Investments and Receivables (Details) - Schedule of Long-Term Investments and Receivables - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Long-Term Investments and Receivables [Abstract] | ||
Prepaid expenses and deposits | $ 14,004 | $ 15,173 |
Investments in financial assets designated at fair value through other comprehensive income | 19,737 | 9,870 |
Trade receivables and unbilled receivables | 7,829 | 5,379 |
Financial assets designated at fair value through profit or loss | 4,694 | 4,856 |
Dividend preference derivative in TSG (see Note 9) | 3,000 | 3,000 |
Others | 2,738 | 707 |
Total long term investments and receivables | $ 52,002 | $ 38,985 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Assets: | |||
Financial assets at fair value through the other comprehensive income | $ 19,737 | $ 9,870 | |
Financial assets measured at fair value through profit or loss | 4,620 | 5,500 | |
Dividend preference derivative in TSG | [1] | 3,000 | 3,000 |
Foreign currency derivative contracts | 109 | ||
Assets in respect of business combinations | 1,368 | ||
Total Assets | 28,725 | 18,479 | |
Liabilities: | |||
Put options of non-controlling interests | 57,867 | 72,188 | |
Contingent consideration in respect of business combination | 10,576 | 30,635 | |
Total Liabilities | 68,443 | 102,823 | |
Level 1 [Member] | |||
Assets: | |||
Financial assets at fair value through the other comprehensive income | 19,450 | 9,408 | |
Financial assets measured at fair value through profit or loss | 738 | ||
Dividend preference derivative in TSG | [1] | ||
Foreign currency derivative contracts | |||
Assets in respect of business combinations | |||
Total Assets | 19,450 | 10,146 | |
Level 3 [Member] | |||
Assets: | |||
Financial assets at fair value through the other comprehensive income | 287 | 462 | |
Financial assets measured at fair value through profit or loss | 4,620 | 4,762 | |
Dividend preference derivative in TSG | [1] | 3,000 | 3,000 |
Foreign currency derivative contracts | |||
Assets in respect of business combinations | 1,368 | ||
Total Assets | 9,275 | 8,224 | |
Liabilities: | |||
Put options of non-controlling interests | 57,867 | 72,188 | |
Contingent consideration in respect of business combination | 10,576 | 30,635 | |
Total Liabilities | $ 68,443 | 102,823 | |
Level 2 [Member] | |||
Assets: | |||
Financial assets at fair value through the other comprehensive income | |||
Financial assets measured at fair value through profit or loss | |||
Dividend preference derivative in TSG | [1] | ||
Foreign currency derivative contracts | 109 | ||
Total Assets | $ 109 | ||
[1] The fair value of dividend preference derivative in TSG was estimated using the Monte-Carlo simulation technique. |
Fair Value Measurement (Detai_2
Fair Value Measurement (Details) - Schedule of Changes in Financial Assets and Liabilities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Financial Liabilities measured at fair value [Member] | ||
Fair Value Measurement (Details) - Schedule of Changes in Financial Assets and Liabilities [Line Items] | ||
Balance | $ 102,823 | $ 95,773 |
Increase due to acquisitions | 8,039 | 19,791 |
Fair value measured for the first time | 1,594 | 7,086 |
Change in fair value measurements | (893) | 629 |
Deduction of the contingent consideration | (39,837) | (17,171) |
Other | (3,283) | (3,285) |
Balance | 68,443 | 102,823 |
Financial assets measured at fair value [Member] | ||
Fair Value Measurement (Details) - Schedule of Changes in Financial Assets and Liabilities [Line Items] | ||
Balance | 8,224 | 2,023 |
Increase due to acquisitions | 1,368 | 462 |
Fair value measured for the first time | 4,762 | |
Change in fair value measurements | (175) | 977 |
Deduction of the contingent consideration | ||
Other | (142) | |
Balance | $ 9,275 | $ 8,224 |
Investments in Companies Acco_3
Investments in Companies Accounted for at Equity (Details) - TSG [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Investments in Companies Accounted for at Equity (Details) [Line Items] | |
Percentage of share interest | 50% |
Acquisition amount | $ 2,140 |
Investments in Companies Acco_4
Investments in Companies Accounted for at Equity (Details) - Schedule of Changes in the Carrying Amount of the Company’s Investment in TSG - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Changes in the Carrying Amount of the Company’s Investment in TSG [Abstract] | ||
TSG (Joint venture) | $ 18,998 | $ 19,459 |
Other | 1,798 | 1,287 |
Total | $ 20,796 | $ 20,746 |
Investments in Companies Acco_5
Investments in Companies Accounted for at Equity (Details) - Schedule of Investment in TSG Equity Method - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Investment in companies accounted for at equity method | ||
Shares | $ 11,073 | $ 11,291 |
Capital note | 7,925 | 8,168 |
Total | 18,998 | 19,459 |
Long-term investments and receivables | ||
Dividend preference derivative at fair value through profit or loss | $ 3,000 | $ 3,000 |
Investments in Companies Acco_6
Investments in Companies Accounted for at Equity (Details) - Schedule of Fair Value of TSG's Dividend Preference Derivative - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Fair Value of TSG's Dividend Preference Derivative [Abstract] | ||
Opening balance | $ 3,000 | $ 2,023 |
Increase in fair value recognized in profit or loss | 85 | 1,221 |
Currency exchange rate in other comprehensive income (loss) | (85) | (244) |
Closing balance | $ 3,000 | $ 3,000 |
Investments in Companies Acco_7
Investments in Companies Accounted for at Equity (Details) - Schedule of the Following Table Summarizes the Changes in the Carrying Amount of the Company’s Investment in TSG - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of the Following Table Summarizes the Changes in the Carrying Amount of the Company’s Investment in TSG [Abstract] | |||
Beginning balance | $ 19,459 | $ 27,633 | $ 27,165 |
Company’s share of profit | 686 | (2,027) | 340 |
Company’s share of other comprehensive income (loss) | (575) | (3,053) | 128 |
Adjustments arising from translating financial statements from functional currency to presentation currency | (572) | (3,094) | |
Ending balance | $ 18,998 | $ 19,459 | $ 27,633 |
Investments in Companies Acco_8
Investments in Companies Accounted for at Equity (Details) - Schedule of Statements of Financial Position of TSG - TSG [Member] - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Statement of Financial Position [Abstract] | ||
Current assets | $ 52,354 | $ 67,254 |
Non-current assets | 70,385 | 65,627 |
Current liabilities | (27,394) | (33,527) |
Non-current liabilities | (64,789) | (69,534) |
Net assets | 30,556 | 29,820 |
Accumulated cost of share-based payment | (1,795) | (1,705) |
Total equity attributed to shareholders | $ 28,761 | $ 28,115 |
Working capital | 50% | 50% |
Share of equity in TSG | $ 14,381 | $ 14,058 |
Excess of fair value over carrying amount | 4,617 | 5,401 |
Total investment carrying amount | $ 18,998 | $ 19,459 |
Investments in Companies Acco_9
Investments in Companies Accounted for at Equity (Details) - Schedule of Operating Results of TSG - TSG [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investments in Companies Accounted for at Equity (Details) - Schedule of Operating Results of TSG [Line Items] | |||
Revenues | $ 79,449 | $ 69,714 | $ 77,035 |
Net income (loss) | 2,587 | (2,780) | 2,104 |
Other comprehensive income (loss) | 1,236 | (6,107) | 255 |
Total comprehensive income (loss) | $ 3,823 | $ (8,887) | $ 2,359 |
Company’s share in TSG | 50% | 50% | 50% |
Company's share of total comprehensive income before amortization of excess cost of intangible assets net of tax | $ 1,912 | $ (4,444) | $ 1,180 |
Amortization of excess cost of intangible assets net of tax | (608) | (637) | (712) |
Company’s share of total comprehensive income (loss) | 1,305 | (5,081) | 468 |
Company’s share of other comprehensive income (loss) | 678 | (3,053) | 128 |
Company’s share of profit (loss) | 686 | (2,027) | 340 |
Operating results total | $ 1,364 | $ (5,081) | $ 468 |
Property, Plants and Equipmen_3
Property, Plants and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of property, plant and equipment [Abstract] | |||
Depreciation expenses | $ 18,513 | $ 18,527 | $ 20,468 |
Property, Plants and Equipmen_4
Property, Plants and Equipment, Net (Details) - Schedule of Property, Plants and Equipment - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plants and Equipment, Net (Details) - Schedule of Property, Plants and Equipment [Line Items] | ||
Cost, Balance of beginning | $ 192,709 | $ 198,095 |
Accumulated depreciation: | ||
Accumulated depreciation, Beginning | 137,738 | 141,209 |
Entrance to consolidation | 5,303 | 4,939 |
Purchases | 16,303 | 22,455 |
Disposals | (21,410) | (11,738) |
Loss of Control | (2,021) | |
Exchange rate differences from translation of foreign operations | (4,401) | (19,021) |
Cost, Balance of ending | 188,504 | 192,709 |
Entrance to consolidation | 2,735 | 3,517 |
Depreciation | 18,513 | 18,527 |
Disposals | (20,312) | (10,936) |
Loss of Control | (1,279) | |
Exchange rate differences from translation of foreign operations | (3,101) | (13,300) |
Accumulated depreciation, Ending | 135,573 | 137,738 |
Depreciated cost | 52,931 | 54,971 |
Computers, furniture and equipment [Member] | ||
Property, Plants and Equipment, Net (Details) - Schedule of Property, Plants and Equipment [Line Items] | ||
Cost, Balance of beginning | 139,977 | 145,333 |
Accumulated depreciation: | ||
Accumulated depreciation, Beginning | 105,874 | 108,762 |
Entrance to consolidation | 3,215 | 4,024 |
Purchases | 12,402 | 17,298 |
Disposals | (15,564) | (10,735) |
Loss of Control | (684) | |
Exchange rate differences from translation of foreign operations | (2,970) | (15,259) |
Cost, Balance of ending | 137,060 | 139,977 |
Entrance to consolidation | 2,002 | 2,803 |
Depreciation | 13,500 | 14,709 |
Disposals | (15,224) | (10,287) |
Loss of Control | (308) | |
Exchange rate differences from translation of foreign operations | (2,201) | (9,805) |
Accumulated depreciation, Ending | 103,951 | 105,874 |
Depreciated cost | 33,109 | 34,103 |
Leasehold improvements [Member] | ||
Property, Plants and Equipment, Net (Details) - Schedule of Property, Plants and Equipment [Line Items] | ||
Cost, Balance of beginning | 42,816 | 41,911 |
Accumulated depreciation: | ||
Accumulated depreciation, Beginning | 24,762 | 25,444 |
Entrance to consolidation | 2,051 | 453 |
Purchases | 3,160 | 4,675 |
Disposals | (3,746) | (418) |
Loss of Control | (1,337) | |
Exchange rate differences from translation of foreign operations | (1,149) | (2,468) |
Cost, Balance of ending | 43,132 | 42,816 |
Entrance to consolidation | 709 | 388 |
Depreciation | 4,223 | 2,834 |
Disposals | (3,490) | (242) |
Loss of Control | (971) | |
Exchange rate differences from translation of foreign operations | (669) | (2,691) |
Accumulated depreciation, Ending | 25,535 | 24,762 |
Depreciated cost | 17,597 | 18,054 |
Motor vehicles [Member] | ||
Property, Plants and Equipment, Net (Details) - Schedule of Property, Plants and Equipment [Line Items] | ||
Cost, Balance of beginning | 7,497 | 8,305 |
Accumulated depreciation: | ||
Accumulated depreciation, Beginning | 4,844 | 4,673 |
Entrance to consolidation | 12 | 351 |
Purchases | 278 | 368 |
Disposals | (1,990) | (560) |
Loss of Control | ||
Exchange rate differences from translation of foreign operations | (235) | (967) |
Cost, Balance of ending | 5,562 | 7,497 |
Entrance to consolidation | 3 | 219 |
Depreciation | 693 | 909 |
Disposals | (1,488) | (384) |
Loss of Control | ||
Exchange rate differences from translation of foreign operations | (172) | (573) |
Accumulated depreciation, Ending | 3,880 | 4,844 |
Depreciated cost | 1,682 | 2,653 |
Software [Member] | ||
Property, Plants and Equipment, Net (Details) - Schedule of Property, Plants and Equipment [Line Items] | ||
Cost, Balance of beginning | 2,419 | 2,546 |
Accumulated depreciation: | ||
Accumulated depreciation, Beginning | 2,258 | 2,330 |
Entrance to consolidation | 25 | 111 |
Purchases | 463 | 114 |
Disposals | (110) | (25) |
Loss of Control | ||
Exchange rate differences from translation of foreign operations | (47) | (327) |
Cost, Balance of ending | 2,750 | 2,419 |
Entrance to consolidation | 21 | 107 |
Depreciation | 97 | 75 |
Disposals | (110) | (23) |
Loss of Control | ||
Exchange rate differences from translation of foreign operations | (59) | (231) |
Accumulated depreciation, Ending | 2,207 | 2,258 |
Depreciated cost | $ 543 | $ 161 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets, Net [Abstract] | |||
Amortized expenses | $ 51,265 | $ 49,501 | $ 58,611 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of Intangible Assets, Net - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Intangible Assets, Net [Line Items] | ||
Cost, beginning balance | $ 705,624 | $ 707,063 |
Cost, Entrance to consolidation | 22,608 | 33,638 |
Cost, Purchases | 15,512 | 15,913 |
Cost, Disposals | (21) | (1,619) |
Cost, Exchange rate differences from translation of foreign operations | (9,163) | (49,371) |
Cost, ending balance | 734,560 | 705,624 |
Accumulated depreciation, beginning balance | 482,898 | 465,127 |
Depreciation, accumulated depreciation | 51,265 | 49,501 |
Disposals, accumulated depreciation | (21) | (1,621) |
Exchange rate differences from translation of foreign operations, accumulated depreciation | (6,510) | (30,109) |
Accumulated depreciation, ending balance | 527,632 | 482,898 |
Depreciated cost, ending balance | 206,928 | 222,726 |
Customer relationship [Member] | ||
Schedule of Intangible Assets, Net [Line Items] | ||
Cost, beginning balance | 309,979 | 307,256 |
Cost, Entrance to consolidation | 20,902 | 26,643 |
Cost, Purchases | ||
Cost, Disposals | ||
Cost, Exchange rate differences from translation of foreign operations | (3,779) | (23,920) |
Cost, ending balance | 327,102 | 309,979 |
Accumulated depreciation, beginning balance | 169,567 | 154,112 |
Depreciation, accumulated depreciation | 27,747 | 26,668 |
Disposals, accumulated depreciation | ||
Exchange rate differences from translation of foreign operations, accumulated depreciation | (2,400) | (11,213) |
Accumulated depreciation, ending balance | 194,914 | 169,567 |
Depreciated cost, ending balance | 132,188 | 140,412 |
Capitalized Software costs [Member] | ||
Schedule of Intangible Assets, Net [Line Items] | ||
Cost, beginning balance | 283,038 | 289,506 |
Cost, Entrance to consolidation | ||
Cost, Purchases | 14,550 | 14,732 |
Cost, Disposals | (21) | (415) |
Cost, Exchange rate differences from translation of foreign operations | (4,699) | (20,785) |
Cost, ending balance | 292,868 | 283,038 |
Accumulated depreciation, beginning balance | 237,253 | 243,264 |
Depreciation, accumulated depreciation | 11,634 | 11,562 |
Disposals, accumulated depreciation | (21) | (416) |
Exchange rate differences from translation of foreign operations, accumulated depreciation | (3,892) | (17,157) |
Accumulated depreciation, ending balance | 244,974 | 237,253 |
Depreciated cost, ending balance | 47,894 | 45,785 |
Acquired technology [Member] | ||
Schedule of Intangible Assets, Net [Line Items] | ||
Cost, beginning balance | 100,337 | 97,395 |
Cost, Entrance to consolidation | 6,152 | |
Cost, Purchases | 962 | 1,181 |
Cost, Disposals | (1,204) | |
Cost, Exchange rate differences from translation of foreign operations | (324) | (3,187) |
Cost, ending balance | 100,975 | 100,337 |
Accumulated depreciation, beginning balance | 71,843 | 64,381 |
Depreciation, accumulated depreciation | 10,227 | 9,986 |
Disposals, accumulated depreciation | (1,205) | |
Exchange rate differences from translation of foreign operations, accumulated depreciation | (123) | (1,319) |
Accumulated depreciation, ending balance | 81,947 | 71,843 |
Depreciated cost, ending balance | 19,028 | 28,494 |
Other [Member] | ||
Schedule of Intangible Assets, Net [Line Items] | ||
Cost, beginning balance | 12,270 | 12,906 |
Cost, Entrance to consolidation | 1,706 | 843 |
Cost, Purchases | ||
Cost, Disposals | ||
Cost, Exchange rate differences from translation of foreign operations | (361) | (1,479) |
Cost, ending balance | 13,615 | 12,270 |
Accumulated depreciation, beginning balance | 4,235 | 3,370 |
Depreciation, accumulated depreciation | 1,657 | 1,285 |
Disposals, accumulated depreciation | ||
Exchange rate differences from translation of foreign operations, accumulated depreciation | (95) | (420) |
Accumulated depreciation, ending balance | 5,797 | 4,235 |
Depreciated cost, ending balance | $ 7,818 | $ 8,035 |
Goodwill (Details)
Goodwill (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill (Details) [Line Items] | ||
Fixed growth rate | 3% | 3% |
Sapiens [Member] | ||
Goodwill (Details) [Line Items] | ||
Weighted pre-tax discount rates | 11% | 11% |
Fixed growth rate | 3% | 3% |
Magic Software [Member] | ||
Goodwill (Details) [Line Items] | ||
Weighted pre-tax discount rates | 11.50% | 11% |
Fixed growth rate | 3% | 3% |
Bottom of range [member] | ||
Goodwill (Details) [Line Items] | ||
Weighted pre-tax discount rates | 10.40% | 10.10% |
Top of range [member] | ||
Goodwill (Details) [Line Items] | ||
Weighted pre-tax discount rates | 10.70% | 9.20% |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of Carrying Amount of Goodwill - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Carrying Amount of Goodwill [Abstract] | ||
Opening balance | $ 926,161 | $ 932,854 |
Acquisition of subsidiaries | 23,112 | 52,651 |
Classifications | (2,672) | (1,502) |
Foreign currency translation adjustments | (10,020) | (57,842) |
Closing balance | $ 936,581 | $ 926,161 |
Goodwill (Details) - Schedule_2
Goodwill (Details) - Schedule of Perpetual Growth Rates and Discount Rates | Dec. 31, 2023 | Dec. 31, 2022 | |
Matrix IT [Member] | |||
Goodwill (Details) - Schedule of Perpetual Growth Rates and Discount Rates [Line Items] | |||
Pre-tax discount rate | [1] | ||
Growth rate | [1] | 3% | 3% |
Sapiens [Member] | |||
Goodwill (Details) - Schedule of Perpetual Growth Rates and Discount Rates [Line Items] | |||
Pre-tax discount rate | [2] | 11% | 11% |
Growth rate | [2] | 3% | 3% |
Magic Software [Member] | |||
Goodwill (Details) - Schedule of Perpetual Growth Rates and Discount Rates [Line Items] | |||
Pre-tax discount rate | [3] | 11.50% | 11% |
Growth rate | [3] | 3% | 3% |
Other consolidated subsidiaries [Member] | |||
Goodwill (Details) - Schedule of Perpetual Growth Rates and Discount Rates [Line Items] | |||
Pre-tax discount rate | [4] | ||
Growth rate | [4] | ||
Bottom of range [member] | Matrix IT [Member] | |||
Goodwill (Details) - Schedule of Perpetual Growth Rates and Discount Rates [Line Items] | |||
Pre-tax discount rate | [1] | 10.40% | 9.20% |
Top of range [member] | Matrix IT [Member] | |||
Goodwill (Details) - Schedule of Perpetual Growth Rates and Discount Rates [Line Items] | |||
Pre-tax discount rate | [1] | 10.70% | 10.10% |
[1] The goodwill allocated to the operating segment Matrix IT is mainly related to two groups of cash-generating units. Cash flows are discounted using weighted pre-tax discount rates that range between 10.4% to 10.7% and a fixed growth rate of 3% in 2023 (2022 - weighted pre-tax discount rates that range between 9.2% to 10.1% and fixed growth rates of 3%). The carrying amount of goodwill allocated to the other groups of cash-generating units included in Matrix IT is immaterial. The goodwill allocated to the operating segment Sapiens is mainly related to two groups of cash-generating units. Cash flows are discounted using a weighted pre-tax discount rate of 11% and a fixed growth rate of 3% in 2023 and 2022. The carrying amount of goodwill allocated to the other groups of cash-generating units included in Sapiens is immaterial. The goodwill allocated to the operating segment Magic Software is related to four groups of cash-generating units. Cash flows are discounted using weighted pre-tax discount rates of 11.5% and a fixed growth rate of 3% in 2023 (2022 - weighted pre-tax discount rates of 11% and fixed growth rates of 3%). Goodwill is allocated across multiple groups of cash-generating units. The carrying amount of goodwill allocated to each group of cash-generating units is immaterial. The Group performed sensitivity analyses regarding the main assumptions in the impairment tests. No impairment of the goodwill tested would be recognized in the event of a reasonably possible change in the assumptions used in 2023 (the same was true for 2022). The Group performed annual impairment tests as of December 31, 2023, 2022 and 2021 and did not identify any impairment losses |
Short Term Loans From Banks a_3
Short Term Loans From Banks and Others (Details) - Short Term Loans From Banks and Others - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Short Term Loans From Banks and Others [Line Items] | ||
Credit from banks and others | $ 145,973 | $ 157,882 |
Current maturities of long-term loans from banks and other financial institutions [Member] | ||
Short Term Loans From Banks and Others [Line Items] | ||
Interest rate % | 1.4 - Prime + 1.5 | |
Currency | NIS | |
Credit from banks and others | $ 66,356 | 78,883 |
Commercial securities not listed [Member] | ||
Short Term Loans From Banks and Others [Line Items] | ||
Interest rate % | Prime -1 | |
Currency | NIS | |
Credit from banks and others | $ 55,142 | 56,834 |
Short-term bank loans and credit line [Member] | ||
Short Term Loans From Banks and Others [Line Items] | ||
Interest rate % | 3.4 - 6.8 | |
Currency | NIS and USD | |
Credit from banks and others | $ 9,533 | 13,168 |
Current maturities of long-term loans from banks [Member] | ||
Short Term Loans From Banks and Others [Line Items] | ||
Interest rate % | 7.5 – 8.1 | |
Currency | NIS Linked to USD | |
Credit from banks and others | $ 13,208 | 8,908 |
Short-term interest on long-term loans from banks and other financial institutions [Member] | ||
Short Term Loans From Banks and Others [Line Items] | ||
Interest rate % | 3.4 – 8.1 | |
Currency | NIS and USD | |
Credit from banks and others | $ 1,734 | $ 89 |
Other Accounts Payable (Details
Other Accounts Payable (Details) - Schedule of Other Accounts Payable - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Other Accounts Payable Abstract | ||
Government institutions | $ 42,102 | $ 43,955 |
Accrued expenses and other current liabilities | 31,022 | 42,385 |
Total | $ 73,124 | $ 86,340 |
Long Term Loans From Banks an_3
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others [Line Items] | ||
Long-term liabilities | $ 170,451 | |
Current maturities | 79,564 | |
Long-term liabilities net of current maturities | $ 90,887 | $ 115,874 |
NIS (Unlinked) [Member] | ||
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others [Line Items] | ||
Currency | NIS (Unlinked) | |
Long-term liabilities | $ 122,951 | |
Current maturities | 66,356 | |
Long-term liabilities net of current maturities | $ 56,595 | 88,532 |
NIS (Unlinked) [Member] | Minimum [Member] | ||
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others [Line Items] | ||
Interest rate | 1.40% | |
NIS (Unlinked) [Member] | Maximum [Member] | ||
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others [Line Items] | ||
Interest rate | 1.50% | |
NIS (Linked to USD) [Member] | ||
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others [Line Items] | ||
Currency | USD (Unlinked) | |
Long-term liabilities | $ 47,500 | |
Current maturities | 13,208 | |
Long-term liabilities net of current maturities | $ 34,292 | $ 27,342 |
NIS (Linked to USD) [Member] | Minimum [Member] | ||
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others [Line Items] | ||
Interest rate | 7.50% | |
NIS (Linked to USD) [Member] | Maximum [Member] | ||
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Loans From Banks and Others [Line Items] | ||
Interest rate | 8.10% |
Long Term Loans From Banks an_4
Long Term Loans From Banks and Others (Details) - Schedule of Long Term Liabilities to Banks and Others Maturity Dates - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Long Term Liabilities to Banks and Others Maturity Dates [Abstract] | ||
First year (current maturities) | $ 79,564 | $ 87,791 |
Second year | 47,859 | 67,956 |
Third year | 21,864 | 32,430 |
Fourth year | 17,281 | 9,998 |
Fifth year and thereafter | 3,883 | 5,490 |
Total | $ 170,451 | $ 203,665 |
Debentures (Details)
Debentures (Details) ₪ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 04, 2022 USD ($) | Dec. 04, 2022 ILS (₪) | Apr. 12, 2021 USD ($) | Apr. 12, 2021 ILS (₪) | Jun. 08, 2020 USD ($) | Jun. 08, 2020 ILS (₪) | Sep. 18, 2022 USD ($) | Sep. 18, 2022 ILS (₪) | Aug. 30, 2022 USD ($) | Aug. 30, 2022 ILS (₪) | Mar. 31, 2019 USD ($) | Mar. 31, 2019 ILS (₪) | Jan. 31, 2018 USD ($) | Jan. 31, 2018 ILS (₪) | Sep. 16, 2017 USD ($) | Sep. 16, 2015 USD ($) | Sep. 16, 2015 ILS (₪) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 04, 2022 ILS (₪) | Sep. 18, 2022 ILS (₪) | Aug. 30, 2022 ILS (₪) | Apr. 12, 2021 ILS (₪) | Jun. 08, 2020 ILS (₪) | Jan. 31, 2018 ILS (₪) | Sep. 16, 2017 ILS (₪) | Sep. 16, 2015 ILS (₪) | |
Debentures [Line Items] | ||||||||||||||||||||||||||||
Interest expenses | $ 7,450 | $ 7,533 | $ 7,056 | |||||||||||||||||||||||||
Amortization of debt premium, discount and issuance costs, net | 667 | 158 | (109) | |||||||||||||||||||||||||
Issuance costs | 523 | |||||||||||||||||||||||||||
Principal amount | 199,051 | $ 50,295 | ||||||||||||||||||||||||||
Formula Systems Series A Secured Debentures [Member] | ||||||||||||||||||||||||||||
Debentures [Line Items] | ||||||||||||||||||||||||||||
Principal amount | $ 44,053 | $ 26,295 | ₪ 150,000 | ₪ 102,260 | ||||||||||||||||||||||||
Percentage of purchase price | 100% | 100% | ||||||||||||||||||||||||||
Fixed interest rate | 2.80% | 2.80% | ||||||||||||||||||||||||||
Issuance costs | 225 | ₪ 782 | $ 320 | ₪ 1,246 | ||||||||||||||||||||||||
Gross proceeds | 45,581 | 155,205 | ||||||||||||||||||||||||||
Interest payable | 99 | ₪ 336 | ||||||||||||||||||||||||||
Debt premium | $ 1,430 | ₪ 4,869 | ||||||||||||||||||||||||||
Fair value of debentures | 109,494 | 133,046 | ||||||||||||||||||||||||||
Formula Systems Series C Secured Debentures | ||||||||||||||||||||||||||||
Debentures [Line Items] | ||||||||||||||||||||||||||||
Principal amount | $ 48,617 | $ 60,514 | ₪ 200,000 | ₪ 160,000 | ||||||||||||||||||||||||
Percentage of purchase price | 100% | 100% | ||||||||||||||||||||||||||
Fixed interest rate | 2.29% | 2.29% | ||||||||||||||||||||||||||
Gross proceeds | 50,524 | ₪ 165,920 | 59,002 | ₪ 195,000 | ||||||||||||||||||||||||
Interest payable | 405 | ₪ 1,329 | 341 | ₪ 1,126 | ||||||||||||||||||||||||
Debt premium | 1,398 | 4,591 | ||||||||||||||||||||||||||
Fair value of debentures | 9,338 | 19,202 | ||||||||||||||||||||||||||
Principal amount | $ 82,600 | ₪ 300,000 | ||||||||||||||||||||||||||
Commitment commission expenses | $ 924 | ₪ 3,355 | ||||||||||||||||||||||||||
Net of issuance costs | $ 229 | 287 | 950 | ₪ 752 | ||||||||||||||||||||||||
Debt deficit | $ 2,141 | ₪ 7,076 | ||||||||||||||||||||||||||
Sapiens' Series B Debentures [Member] | ||||||||||||||||||||||||||||
Debentures [Line Items] | ||||||||||||||||||||||||||||
Principal amount | $ 60,362 | $ 79,186 | ₪ 210,000 | ₪ 280,000 | ||||||||||||||||||||||||
Fixed interest rate | 3.37% | 3.37% | ||||||||||||||||||||||||||
Issuance costs | 669 | ₪ 2,326 | $ 956 | |||||||||||||||||||||||||
Gross proceeds | 60,603 | 210,840 | ||||||||||||||||||||||||||
Interest payable | 864 | 3,006 | ||||||||||||||||||||||||||
Annual payment | $ 9,898 | |||||||||||||||||||||||||||
Debt discount | $ 623 | ₪ 2,166 | ||||||||||||||||||||||||||
Fair market price on stock exchange | 57,667 | 75,192 | ||||||||||||||||||||||||||
Matrix IT Series B Debentures [Member] | ||||||||||||||||||||||||||||
Debentures [Line Items] | ||||||||||||||||||||||||||||
Principal amount | $ 53,680 | $ 87,872 | ₪ 180,366 | ₪ 295,249 | ||||||||||||||||||||||||
Percentage of purchase price | 100% | 100% | ||||||||||||||||||||||||||
Fixed interest rate | 4.10% | 4.10% | ||||||||||||||||||||||||||
Issuance costs | 119 | ₪ 399 | $ 642 | ₪ 2,158 | ||||||||||||||||||||||||
Gross proceeds | 53,107 | 178,385 | ||||||||||||||||||||||||||
Interest payable | 471 | ₪ 1,582 | ||||||||||||||||||||||||||
Debt deficit | $ 590 | ₪ 1,981 | ||||||||||||||||||||||||||
Fair market price on stock exchange | $ 122,938 | $ 135,156 | ||||||||||||||||||||||||||
Description of debentures | The principal due under the Matrix IT Series B Debentures is payable in thirteen (13) semi-annual installments each equal to approximately 7.14% of the aggregate principal amount (or approximately NIS 21,081 thousand) on February 1 and on August 1 of each of the years 2023 through 2029 with the last payment equal to 7.18% of the aggregate principal amount (or approximately NIS 21,196 thousand) paid on February 1, 2030. | The principal due under the Matrix IT Series B Debentures is payable in thirteen (13) semi-annual installments each equal to approximately 7.14% of the aggregate principal amount (or approximately NIS 21,081 thousand) on February 1 and on August 1 of each of the years 2023 through 2029 with the last payment equal to 7.18% of the aggregate principal amount (or approximately NIS 21,196 thousand) paid on February 1, 2030. |
Debentures (Details) - Schedule
Debentures (Details) - Schedule of Debentures - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debentures (Details) - Schedule of Debentures [Line Items] | ||
Par Value | $ 304,255 | $ 373,952 |
Unamortized debt premium (discount) and issuance costs, net | (2,410) | (2,849) |
Current maturities | 70,281 | 62,180 |
Total long-term debentures, net of current maturities | 231,541 | 308,923 |
Short-term accrued interest | 2,604 | 2,822 |
Total short- term and long- term debentures | $ 304,426 | $ 373,925 |
Formula’s Series A Secured Debentures (2.8%) [Member] | ||
Debentures (Details) - Schedule of Debentures [Line Items] | ||
Effective Interest rate % | 2.40% | 2.40% |
Currency | NIS (Unlinked) | NIS (Unlinked) |
Par value in issuance currency | NIS 34,211 | NIS 68,422 |
Par Value | $ 9,432 | $ 19,444 |
Unamortized debt premium (discount) and issuance costs, net | 22 | 85 |
Current maturities | 9,432 | 9,722 |
Total long-term debentures, net of current maturities | 9,807 | |
Short-term accrued interest | 154 | |
Total short- term and long- term debentures | $ 9,586 | $ 19,529 |
Formula’s Series C Secured Debentures (2.3%) [Member] | ||
Debentures (Details) - Schedule of Debentures [Line Items] | ||
Effective Interest rate % | 2.70% | 2.70% |
Currency | NIS (Unlinked) | NIS (Unlinked) |
Par value in issuance currency | NIS 412,264 | NIS 493,244 |
Par Value | $ 113,665 | $ 140,166 |
Unamortized debt premium (discount) and issuance costs, net | (932) | (1,477) |
Current maturities | 22,327 | 23,012 |
Total long-term debentures, net of current maturities | 90,405 | 115,677 |
Short-term accrued interest | 213 | 265 |
Total short- term and long- term debentures | $ 112,945 | $ 138,954 |
Sapiens’ Series B Debentures (3.37%) [Member] | ||
Debentures (Details) - Schedule of Debentures [Line Items] | ||
Effective Interest rate % | 3.30% | 3.30% |
Currency | NIS (Linked to fix rate of USD) | NIS (Linked to fix rate of USD) |
Par value in issuance currency | NIS 210,000 | NIS 280,000 |
Par Value | $ 59,389 | $ 79,186 |
Unamortized debt premium (discount) and issuance costs, net | (50) | (114) |
Current maturities | 19,796 | 19,796 |
Total long-term debentures, net of current maturities | 39,543 | 59,276 |
Short-term accrued interest | 1,337 | |
Total short- term and long- term debentures | $ 59,339 | $ 80,409 |
Matrix IT’ Series B Debentures (4.1%) [Member] | ||
Debentures (Details) - Schedule of Debentures [Line Items] | ||
Effective Interest rate % | 4.50% | 4.50% |
Currency | NIS (Unlinked) | NIS (Unlinked) |
Par value in issuance currency | NIS 441,656 | NIS 475,615 |
Par Value | $ 121,769 | $ 135,156 |
Unamortized debt premium (discount) and issuance costs, net | (1,450) | (1,343) |
Current maturities | 18,726 | 9,650 |
Total long-term debentures, net of current maturities | 101,593 | 124,163 |
Short-term accrued interest | 2,237 | 1,220 |
Total short- term and long- term debentures | $ 122,556 | $ 135,033 |
Debentures (Details) - Schedu_2
Debentures (Details) - Schedule of Aggregate Principal Annual Payments of Debentures $ in Thousands | Dec. 31, 2023 USD ($) |
Schedule of Aggregate Principal Annual Payments of Debentures [Abstract] | |
2024 | $ 70,281 |
2025 | 84,191 |
2026 | 84,192 |
2027 | 18,726 |
2028 | 46,865 |
Total | $ 304,255 |
Related Parties Transactions (D
Related Parties Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Parties Transactions [Line Items] | |||
Performed services sub-contractor | $ 3,500 | $ 2,900 | $ 3,200 |
Due from its transactions with Asseco | 1,233 | 2,927 | |
Trade receivables balances due from related parties | 1,008 | 1,149 | |
Back office services amount | 224 | 240 | 160 |
Sapiens [Member] | |||
Related Parties Transactions [Line Items] | |||
Services obtained from Asseco | 165 | 197 | |
Amount incurred by entity for provision of key management personnel services provided by separate management entity | 181 | ||
Fees paid for board services in affiliates | 28 | 29 | 27 |
Matrix [Member] | |||
Related Parties Transactions [Line Items] | |||
Fees paid for board services in affiliates | $ 27 | $ 33 | $ 37 |
Related Parties Transactions _2
Related Parties Transactions (Details) - Schedule of Recognized as an Expense During the Reporting Period Related to Officers and Directors - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Recognized as an Expense During the Reporting Period Related to Officers and Directors [Abstract] | ||
Short-term employee benefits | $ 4,204 | $ 4,665 |
Share-based compensation | 7,197 | 8,104 |
Total | $ 11,401 | $ 12,769 |
Leases (Details)
Leases (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure of leases [Abstract] | |
Lease periods expiring term | The Group’s leases have original lease periods expiring between 2024 and 2036. |
Leases (Details) - Schedule of
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases [Line Items] | |
Total undiscounted cash flows | $ 146,340 |
Less imputed interest | (17,637) |
Present value of lease liabilities | 128,703 |
2024 [Member] | |
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases [Line Items] | |
Total undiscounted cash flows | 45,871 |
2025 [Member] | |
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases [Line Items] | |
Total undiscounted cash flows | 36,524 |
2026 [Member] | |
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases [Line Items] | |
Total undiscounted cash flows | 13,448 |
2027 [Member] | |
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases [Line Items] | |
Total undiscounted cash flows | 12,477 |
2028 [Member] | |
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases [Line Items] | |
Total undiscounted cash flows | 12,419 |
2029 and thereafter [Member] | |
Leases (Details) - Schedule of Maturity Analysis of Undiscounted Future Lease Payments Receivable for Operating Leases [Line Items] | |
Total undiscounted cash flows | $ 25,601 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of Information on Leases - Leases [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases (Details) - Schedule of Information on Leases [Line Items] | ||
Interest expense on lease liabilities | $ 7,195 | $ 4,822 |
Total cash outflow for leases | $ 55,064 | $ 49,702 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of Right-of-Use Assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cost: | ||
Beginning Balance, Cost | $ 229,869 | $ 227,486 |
Additions during the year: | ||
New leases, Cost | 61,468 | 53,194 |
Adjustments for indexation, Cost | 1,991 | 3,455 |
Adjustments arising from translating financial statements of foreign operations, Cost | (2,925) | (21,042) |
Modification of leases, Cost | (3,524) | 678 |
Acquisition of subsidiaries, Cost | 265 | 2,754 |
Disposals during the year: | ||
Termination of leases, Cost | (29,505) | (36,656) |
Ending Balance, Cost | 257,639 | 229,869 |
Accumulated depreciation: | ||
Beginning Balance, Accumulated depreciation | 113,029 | 111,653 |
Additions during the year: | ||
Depreciation, Accumulated depreciation | 52,054 | 47,280 |
Adjustments arising from translating financial statements of foreign operations, Accumulated depreciation | 17 | (10,318) |
Disposals during the year: | ||
Termination of leases, Accumulated depreciation | (28,112) | (35,586) |
Ending Balance, Accumulated depreciation | 136,988 | 113,029 |
Depreciated cost | 120,651 | 116,840 |
Land and buildings [Member] | ||
Cost: | ||
Beginning Balance, Cost | 179,617 | 173,450 |
Additions during the year: | ||
New leases, Cost | 38,376 | 30,711 |
Adjustments for indexation, Cost | 1,573 | 2,438 |
Adjustments arising from translating financial statements of foreign operations, Cost | (2,111) | (15,571) |
Modification of leases, Cost | (3,590) | 589 |
Acquisition of subsidiaries, Cost | 265 | 2,714 |
Disposals during the year: | ||
Termination of leases, Cost | (18,323) | (14,714) |
Ending Balance, Cost | 195,807 | 179,617 |
Accumulated depreciation: | ||
Beginning Balance, Accumulated depreciation | 88,429 | 77,669 |
Additions during the year: | ||
Depreciation, Accumulated depreciation | 34,135 | 31,387 |
Adjustments arising from translating financial statements of foreign operations, Accumulated depreciation | 24 | (6,902) |
Disposals during the year: | ||
Termination of leases, Accumulated depreciation | (17,874) | (13,725) |
Ending Balance, Accumulated depreciation | 104,714 | 88,429 |
Depreciated cost | 91,093 | 91,188 |
Motor vehicles [Member] | ||
Cost: | ||
Beginning Balance, Cost | 50,252 | 54,036 |
Additions during the year: | ||
New leases, Cost | 23,092 | 22,483 |
Adjustments for indexation, Cost | 418 | 1,017 |
Adjustments arising from translating financial statements of foreign operations, Cost | (814) | (5,471) |
Modification of leases, Cost | 66 | 89 |
Acquisition of subsidiaries, Cost | 40 | |
Disposals during the year: | ||
Termination of leases, Cost | (11,182) | (21,942) |
Ending Balance, Cost | 61,832 | 50,252 |
Accumulated depreciation: | ||
Beginning Balance, Accumulated depreciation | 24,600 | 33,984 |
Additions during the year: | ||
Depreciation, Accumulated depreciation | 17,919 | 15,893 |
Adjustments arising from translating financial statements of foreign operations, Accumulated depreciation | (7) | (3,416) |
Disposals during the year: | ||
Termination of leases, Accumulated depreciation | (10,238) | (21,861) |
Ending Balance, Accumulated depreciation | 32,274 | 24,600 |
Depreciated cost | $ 29,558 | $ 25,652 |
Employee Option Plans (Details)
Employee Option Plans (Details) $ / shares in Units, ₪ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Aug. 12, 2023 | Mar. 12, 2023 | Nov. 30, 2020 shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2023 ILS (₪) shares | Mar. 31, 2022 USD ($) $ / shares shares | Aug. 31, 2021 shares | |
Employee Option Plans [Line Items] | |||||||||
Aggregate restricted shares (in Shares) | shares | 350,000 | ||||||||
Number of restricted shares (in Shares) | shares | 21,000 | 48,378 | |||||||
Total fair value of grant | $ 7,914 | ₪ 27,851 | |||||||
Exercisable per share (in Dollars per share) | $ / shares | $ 81.8 | ||||||||
Ordinary shares (in Shares) | shares | 9,000 | 9,000 | |||||||
Ordinary shares fully vested (in Shares) | shares | 21,000 | 21,000 | |||||||
Compensation amount | $ 6,460 | $ 7,089 | $ 7,373 | ||||||
Unrecognized compensation costs | $ 1,465 | ||||||||
Fair value options, exercise factor | 130% | ||||||||
Fair value options, expected volatility | 31% | ||||||||
Options expire periods | 5 years | ||||||||
Compensation Cost | $ 3,601 | ||||||||
Weighted average period | 1 year 8 months 1 day | ||||||||
Options Shares (in Shares) | shares | 4,028 | ||||||||
Purchase Shares (in Shares) | shares | 4,028 | ||||||||
Preceding years | 1 year 1 month 6 days | ||||||||
Formula [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Number of restricted shares (in Shares) | shares | 2,400 | ||||||||
Unrecognized compensation costs | $ 27,703 | $ 34,972 | 45,973 | ||||||
Matrix IT [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Number of restricted shares (in Shares) | shares | 375,000 | ||||||||
Unrecognized compensation costs | 8,808 | $ 0 | 428 | ||||||
Number of vested percentage | 40% | ||||||||
2021 Plan [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Total fair value of grant | $ 1,225 | ||||||||
Exercisable per share (in Dollars per share) | $ / shares | $ 81.65 | ||||||||
Top of range [member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Total fair value of grant | ₪ | ₪ 170,684 | ||||||||
Fair value options, risk-free interest rate | (4.53%) | ||||||||
Bottom of range [member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Total fair value of grant | $ 50,054 | ||||||||
Fair value options, risk-free interest rate | 3.34% | ||||||||
2011 Plan [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Total fair value of grant | $ 232 | ||||||||
Exercisable per share (in Dollars per share) | $ / shares | $ 96.7 | ||||||||
Total equity-based compensation expense | $ 407 | $ 973 | |||||||
Description of options vest | 66.67% of the RSUs (i.e., 407,847 RSUs) are subject to time-based vesting that shall start as of the grant date and shall end at December 31, 2027, subject to the continued engagement of Formula’s chief executive officer with the Company as of that date (the “Vesting Period”); and up to 33.33% of the RSUs (i.e., 203,924 RSUs as of the date hereof) are subject to performance-based vesting, and shall vest at December 31, 2027 on a pro-rata basis with respect to each fiscal year (starting as of January 1, 2020) during the Vesting Period in which the target EBITDA (as defined in the grant) is achieved, subject to the continued engagement of Formula’s chief executive officer with the Company. At the end of the vesting period, the number of performances-based RSUs that vests shall be equal to (i) the number of fiscal years in which the target EBITDA (as defined in the grant) was achieved multiplied by (ii) 25,490.50 RSUs (rounded to the nearest whole number, up to a cap of 203,924 RSUs in total). | ||||||||
Matrix [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Description of options vest | Matrix IT’s board of directors approved, following the approval by Matrix IT’s compensation committee, the allocation of 920,000 options exercisable up to 920,000 ordinary Matrix IT’s shares of NIS 1 par value, to 18 officers and senior employees of Matrix IT or of its controlled companies. Upon termination of an officer’s employment, 45,000 options were forfeited before vesting. The exercise of the options at the date of grant is NIS 71.25. The price is subject to adjustment, including when distributing a dividend. 50% of the options will be vested on March 12, 2025, with the remaining amount vesting in equal parts on March 12, 2026 and 2027. | ||||||||
Fair value options, exercise factor | 130% | ||||||||
Fair value options, expected volatility | 31% | ||||||||
Options expire periods | 5 years | ||||||||
Matrix [Member] | Top of range [member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Fair value options, risk-free interest rate | (4.53%) | ||||||||
Matrix [Member] | Bottom of range [member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Fair value options, risk-free interest rate | 3.34% | ||||||||
Matrix [Member] | General Assembly [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Description of options vest | Matrix IT’s board of directors approved, following the approval by Matrix IT’s compensation committee, the allocation of 45,000 options exercisable up to 45,000 ordinary Matrix IT’s shares of NIS 1 par value, to a senior employee of Matrix IT. The exercise of the options at the date of grant is NIS 73.73. The price is subject to adjustment, including when distributing a dividend. 50% of the options will be vested in August, 2025, with the remaining amount vesting in equal parts on August 10, 2026 and 2027. The contractual life of the stock options is 5 years from the grant date. | ||||||||
Matrix [Member] | Mr. Moti Gutman [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Description of options vest | These restricted shares vest at certain points in time over a six-year period, commencing on March 15, 2022 and concluding on December 31, 2027. The total fair value of the grant was calculated based on the Formula share price on the grant date and equaled $2,031 ($96.7 per share).In January 2023, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded 15,000 restricted shares under the 2021 plan (the “restricted shares”). These restricted shares vest on an annual basis over a six-year period, commencing on December 31, 2023 and concluding on December 31, 2029. | ||||||||
Sapiens [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Total equity-based compensation expense | $ 3,186 | $ 4,317 | $ 5,421 | ||||||
Employees and directors to purchase shares description | In 2023, 2022 and 2021, Sapiens granted 429,500, 404,500 and 847,000 stock options, respectively, to its employees and directors to purchase its shares. | ||||||||
Weighted average grant date fair values of options (in Dollars per share) | $ / shares | $ 6.51 | $ 7.22 | $ 10.35 | ||||||
Intrinsic value of options exercised | $ 851 | $ 250 | $ 8,505 | ||||||
Magic [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Intrinsic value of options exercised | $ 61 | $ 344 | $ 628 | ||||||
Chief Financial Officers [Member] | |||||||||
Employee Option Plans [Line Items] | |||||||||
Number of restricted shares (in Shares) | shares | 611,771 |
Employee Option Plans (Detail_2
Employee Option Plans (Details) - Schedule of Share-Based Compensation Expense Resulting from Stock Options Grants - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Share-Based Compensation Expense Resulting from Stock Options Grants [Line Items] | |||
Total stock-based compensation expense | $ 18,622 | $ 14,953 | $ 14,767 |
General and administrative expenses [Member] | |||
Schedule of Share-Based Compensation Expense Resulting from Stock Options Grants [Line Items] | |||
Total stock-based compensation expense | $ 18,622 | $ 14,953 | $ 14,767 |
Employee Option Plans (Detail_3
Employee Option Plans (Details) - Schedule of Matrix IT's Employee Stock-Based Compensation Activity - Matrix [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Employee Option Plans (Details) - Schedule of Matrix IT's Employee Stock-Based Compensation Activity [Line Items] | |
Number of options, Outstanding at beginning of year | shares | 398,878 |
Weighted average exercise price, Outstanding at beginning of year | $ 7.66 |
Weighted average remaining contractual term, Outstanding at beginning of year | 10 months 24 days |
Aggregate intrinsic value, Outstanding at beginning of year | $ | $ 5,144 |
Number of options, Granted | shares | 1,340,000 |
Weighted average exercise price, Granted | $ 14.17 |
Weighted average remaining contractual term (in years), Granted | 5 years |
Aggregate intrinsic value , Granted | $ | $ 8,363 |
Number of options, Expired and forfeited | shares | (45,000) |
Weighted average exercise price, Expired and forfeited | $ 19.68 |
Weighted average remaining contractual term, Expired and forfeited | |
Aggregate intrinsic value, Expired and forfeited | $ | |
Number of options, Exercised | shares | (398,878) |
Weighted average exercise price, Exercised | $ 7.66 |
Weighted average remaining contractual term, Exercised | |
Aggregate intrinsic value, Exercised | $ | $ 5,135 |
Number of options, Outstanding at end of year | shares | 1,295,000 |
Weighted average exercise price, Outstanding at end of year | $ 13.6 |
Weighted average remaining contractual term, Outstanding at end of year | 4 years 1 month 28 days |
Aggregate intrinsic value, Outstanding at end of year | $ | $ 7,336 |
Weighted average exercise price, Exercisable | |
Weighted average remaining contractual term, Exercisable |
Employee Option Plans (Detail_4
Employee Option Plans (Details) - Schedule of Sapiens' Stock-Based Compensation Activity - Sapiens [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Employee Option Plans (Details) - Schedule of Sapiens' Stock-Based Compensation Activity [Line Items] | |
Amount of options, Outstanding at beginning of year | shares | 2,132,763 |
Weighted average exercise price, Outstanding at beginning of year | $ / shares | $ 21.51 |
Weighted average remaining contractual life, Outstanding at beginning of year | 3 years 3 months 18 days |
Aggregate intrinsic value, Outstanding at beginning of year | $ | $ 5,531 |
Amount of options, Granted | shares | 429,500 |
Weighted average exercise price, Granted | $ / shares | $ 21.09 |
Amount of options, Exercised | shares | (558,695) |
Weighted average exercise price, Exercised | $ / shares | $ 9.54 |
Amount of options, Expired and forfeited | shares | (58,068) |
Weighted average exercise price, Expired and forfeited | $ / shares | $ 14.59 |
Amount of options, Outstanding at end of year | shares | 1,945,500 |
Weighted average exercise price, Outstanding at end of year | $ / shares | $ 24.52 |
Weighted average remaining contractual life, Outstanding at end of year | 3 years 8 months 15 days |
Aggregate intrinsic value, Outstanding at end of year | $ | $ 9,118 |
Amount of options, Exercisable at end of year | shares | 796,425 |
Weighted average exercise price, Exercisable at end of year | $ / shares | $ 24.78 |
Weighted average remaining contractual life, Exercisable at end of year | 3 years 1 month 17 days |
Aggregate intrinsic value, Exercisable at end of year | $ | $ 3,604 |
Employee Option Plans (Detail_5
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price [Line Items] | |
Options outstanding (in Shares) | shares | 1,945,500 |
Weighted Average remaining contractual Term | 3 years 8 months 15 days |
Weighted average exercise price | $ 24.52 |
Options Exercisable (in Shares) | shares | 796,425 |
Weighted Average Exercise price of Options Exercisable | $ 24.78 |
Exercise Price Range 8 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price [Line Items] | |
Ranges of exercise price | $ 8.49 |
Options outstanding (in Shares) | shares | 15,000 |
Weighted Average remaining contractual Term | 7 months 6 days |
Weighted average exercise price | $ 8.49 |
Options Exercisable (in Shares) | shares | 15,000 |
Weighted Average Exercise price of Options Exercisable | $ 8.49 |
Exercise Price Range 8.37-10.02 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price [Line Items] | |
Ranges of exercise price, lower limit | 9.49 |
Ranges of exercise price, upper limit | $ 13.88 |
Options outstanding (in Shares) | shares | 52,000 |
Weighted Average remaining contractual Term | 1 year 4 months 9 days |
Weighted average exercise price | $ 11.49 |
Options Exercisable (in Shares) | shares | 52,000 |
Weighted Average Exercise price of Options Exercisable | $ 11.49 |
Exercise Price Range 10.78-18.77 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price [Line Items] | |
Ranges of exercise price, lower limit | 18.26 |
Ranges of exercise price, upper limit | $ 22.03 |
Options outstanding (in Shares) | shares | 816,500 |
Weighted Average remaining contractual Term | 4 years 10 months 9 days |
Weighted average exercise price | $ 20 |
Options Exercisable (in Shares) | shares | 188,425 |
Weighted Average Exercise price of Options Exercisable | $ 20.93 |
Exercise Price Range 22.54-24.33 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price [Line Items] | |
Ranges of exercise price, lower limit | 22.71 |
Ranges of exercise price, upper limit | $ 27.28 |
Options outstanding (in Shares) | shares | 271,250 |
Weighted Average remaining contractual Term | 2 years 9 months 7 days |
Weighted average exercise price | $ 23.43 |
Options Exercisable (in Shares) | shares | 182,500 |
Weighted Average Exercise price of Options Exercisable | $ 22.69 |
Exercise Price Range 27.79-31.57 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price [Line Items] | |
Ranges of exercise price, lower limit | 28.6 |
Ranges of exercise price, upper limit | $ 31.06 |
Options outstanding (in Shares) | shares | 723,750 |
Weighted Average remaining contractual Term | 3 years 3 months 14 days |
Weighted average exercise price | $ 28.95 |
Options Exercisable (in Shares) | shares | 325,000 |
Weighted Average Exercise price of Options Exercisable | $ 29.12 |
Exercise Price Range 33.99 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ Stock Option Plans into Ranges of Exercise Price [Line Items] | |
Ranges of exercise price | $ 33.48 |
Options outstanding (in Shares) | shares | 67,000 |
Weighted Average remaining contractual Term | 3 years 11 months 1 day |
Weighted average exercise price | $ 33.48 |
Options Exercisable (in Shares) | shares | 33,500 |
Weighted Average Exercise price of Options Exercisable | $ 33.48 |
Employee Option Plans (Detail_6
Employee Option Plans (Details) - Schedule of the RSU Activities | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Schedule of the Rsu Activities [Abstract] | |
Amount of options, Unvested beginning | shares | 139,144 |
Weighted Average Grant-Date Fair value, Unvested beginning | $ / shares | $ 26.56 |
Amount of options, Granted | shares | 7,500 |
Weighted Average Grant-Date Fair value, Granted | $ / shares | $ 19.96 |
Amount of options, Vested | shares | (34,329) |
Weighted Average Grant-Date Fair value, Vested | $ / shares | $ 24.47 |
Amount of options, Expired and forfeiture | shares | (39,492) |
Weighted Average Grant-Date Fair value, Expired and forfeiture | $ / shares | $ 24.56 |
Amount of options, Unvested ending | shares | 72,823 |
Weighted Average Grant-Date Fair value, Unvested ending | $ / shares | $ 27.95 |
Employee Option Plans (Detail_7
Employee Option Plans (Details) - Schedule of the RSU Activities $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Employee Option Plans (Details) - Schedule of the RSU Activities [Line Items] | |
Number of options, Outstanding at beginning of year | 4,028 |
Weighted average exercise price, Outstanding at beginning of year (in Dollars per share) | $ / shares | $ 264.67 |
Weighted average remaining contractual term, Outstanding at beginning of year | 7 years 11 months 8 days |
Aggregate intrinsic value, Outstanding at beginning of year (in Dollars) | $ | $ 7,499 |
Number of options, Granted | |
Number of options, Outstanding at end of year | 4,028 |
Weighted average exercise price, Outstanding at end of year (in Dollars per share) | $ / shares | $ 256.79 |
Weighted average remaining contractual term, Outstanding at end of year | 6 years 11 months 8 days |
Aggregate intrinsic value, Outstanding at end of year (in Dollars) | $ | $ 7,276 |
Number of options, Exercisable at end of year | 1,847 |
Weighted average exercise price, Exercisable at end of year (in Dollars per share) | $ / shares | $ 27.72 |
Weighted average remaining contractual term, Exercisable at end of year | 6 years 11 months 4 days |
Aggregate intrinsic value, Exercisable at end of year (in Dollars) | $ | $ 3,760 |
Magic Software [Member] | |
Employee Option Plans (Details) - Schedule of the RSU Activities [Line Items] | |
Number of options, Outstanding at beginning of year | 26,250 |
Weighted average exercise price, Outstanding at beginning of year (in Dollars per share) | $ / shares | $ 0.91 |
Weighted average remaining contractual term, Outstanding at beginning of year | 5 years 11 months 12 days |
Aggregate intrinsic value, Outstanding at beginning of year (in Dollars) | $ | $ 397 |
Number of options, Granted | |
Weighted average exercise price, Granted (in Dollars per share) | $ / shares | |
Number of options, Forfeited | (20,000) |
Weighted average exercise price, Forfeited (in Dollars per share) | $ / shares | $ 3.51 |
Number of options, Exercised | (6,250) |
Number of options, Outstanding at end of year | |
Weighted average exercise price, Outstanding at end of year (in Dollars per share) | $ / shares | |
Weighted average remaining contractual term, Outstanding at end of year | |
Aggregate intrinsic value, Outstanding at end of year (in Dollars) | $ | |
Number of options, Exercisable at end of year | |
Weighted average exercise price, Exercisable at end of year (in Dollars per share) | $ / shares | |
Weighted average remaining contractual term, Exercisable at end of year | |
Aggregate intrinsic value, Exercisable at end of year (in Dollars) | $ |
Employee Option Plans (Detail_8
Employee Option Plans (Details) - Schedule of Options Outstanding Separated into Ranges of Exercise Price and Exercise Price Categories - Stock Option [Member] | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Employee Option Plans (Details) - Schedule of Options Outstanding Separated into Ranges of Exercise Price and Exercise Price Categories [Line Items] | |
Options outstanding | 4,028 |
Weighted average remaining contractual life | 6 years 11 months 8 days |
Weighted average exercise price (in Dollars per share) | $ / shares | $ 1,847 |
Options exercisable | 27.72 |
Magic Software [Member] | |
Employee Option Plans (Details) - Schedule of Options Outstanding Separated into Ranges of Exercise Price and Exercise Price Categories [Line Items] | |
Ranges of Exercise price (in Dollars per share) | $ / shares | $ 1,822 |
Options outstanding | 493 |
Weighted average remaining contractual life | 6 years 11 months 26 days |
Weighted average exercise price (in Dollars per share) | $ / shares | |
Options exercisable | |
Magic Software [Member] | Ranges of Exercise price 0 [Member] | |
Employee Option Plans (Details) - Schedule of Options Outstanding Separated into Ranges of Exercise Price and Exercise Price Categories [Line Items] | |
Ranges of Exercise price (in Dollars per share) | $ / shares | $ 0.28 |
Options outstanding | 3,238 |
Weighted average remaining contractual life | 6 years 11 months 1 day |
Weighted average exercise price (in Dollars per share) | $ / shares | $ 1,736 |
Options exercisable | 0.28 |
Magic Software [Member] | Ranges of Exercise price 3.81 [Member] | |
Employee Option Plans (Details) - Schedule of Options Outstanding Separated into Ranges of Exercise Price and Exercise Price Categories [Line Items] | |
Ranges of Exercise price (in Dollars per share) | $ / shares | $ 455 |
Options outstanding | 297 |
Weighted average remaining contractual life | 6 years 11 months 26 days |
Weighted average exercise price (in Dollars per share) | $ / shares | $ 111 |
Options exercisable | 455 |
Employee Benefit Liabilities (D
Employee Benefit Liabilities (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefit Liabilities [Abstract] | |
Annual compensation | 100% |
Employees’ contributions | 3% |
Employee Benefit Liabilities _2
Employee Benefit Liabilities (Details) - Schedule of Defined Benefit Plans - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Defined Benefit Plans [Abstract] | ||
Defined benefit obligation | $ 85,743 | $ 91,973 |
Fair value of plan assets | (75,316) | (82,857) |
Net defined benefit liability | $ 10,427 | $ 9,116 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||
Jul. 15, 2021 USD ($) | Jul. 15, 2021 ILS (₪) | Aug. 31, 2022 ILS (₪) shares | Dec. 24, 2019 USD ($) | Dec. 24, 2019 ILS (₪) | Dec. 31, 2023 USD ($) shares | Dec. 31, 2021 USD ($) | Dec. 31, 2021 ILS (₪) | Dec. 31, 2023 ILS (₪) shares | Dec. 05, 2023 shares | Dec. 31, 2022 shares | Mar. 31, 2022 shares | Aug. 31, 2021 shares | Dec. 31, 2015 | |
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Additional shares (in Shares) | shares | 730,000 | |||||||||||||
Aggregate security amount | $ 41,900,000 | |||||||||||||
Bank guarantees amount | 9,400,000 | |||||||||||||
Restricted bank deposits | 1,400,000 | |||||||||||||
Equity attribute amount | $ 305,341 | ₪ 1,107,472,000 | ||||||||||||
Exceed percentage | 65% | |||||||||||||
Accumulated profit percentage | 75% | |||||||||||||
Net CAP percentage | 1% | |||||||||||||
Asset percentage | 7.70% | |||||||||||||
Deed of trust percentage | 0.52% | |||||||||||||
Description of magic software | Under the terms of the loans with an Israeli financial institutions, Magic Software has undertaken to comply with the following financial covenants, as they will be expressed in its consolidated financial statements: (i)Magic Software’ equity will not be lower than $150 million (one hundred and fifty million U.S. Dollars at all times) - as of December 31, 2023 Magic Software shareholders’ equity was $290,944; (ii)The ratio of Magic Software’ total financial debts less cash to total assets will not exceed 30% - as of December 31, 2023 Magic Software financial debts less cash were negative (-5%, since cash exceeds indebtedness); and (iii)The ratio of Magic Software’s total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 – as of December 31, 2023 the ratio of Magic Software’s net financial indebtedness to EBITDA was negative (-0.31) (cash exceeds indebtedness). | |||||||||||||
Restricted shares (in Shares) | shares | 21,000 | 48,378 | ||||||||||||
Cost (in Shares) | shares | 15,901,287 | 15,901,287 | 45 | 15,886,287 | ||||||||||
Claim amount | $ 17,900,000 | ₪ 63,000,000 | $ 225,600,000 | ₪ 793,800,000 | $ 7,000 | ₪ 24,500 | ||||||||
Maintenance revenue percentage | 3.50% | |||||||||||||
Service revenue percentage | 0.35% | |||||||||||||
Unpaid royalties amount | $ 5,021,000 | |||||||||||||
Liability in accordance | 2,098,000 | |||||||||||||
Bottom of range [member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Equity attribute amount | $ 215,000,000 | |||||||||||||
Royalty payment percentage | 100% | |||||||||||||
Top of range [member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Equity attribute amount | $ 625,762 | |||||||||||||
Royalty payment percentage | (150.00%) | |||||||||||||
Matrix IT [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Additional shares (in Shares) | shares | 138,000 | |||||||||||||
CEO [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Restricted shares (in Shares) | shares | 611,771 | 611,771 | ||||||||||||
Matrix [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Description of liability to financial institution | (i)The total rate of Matrix IT financial debts and liabilities to banks with the addition of debts in respect of debentures that have been and/or will be issued by Matrix IT and shareholders’ loans that have been and/or will be granted to Matrix IT (collectively, the “debts”) will not exceed 40% of its total balance sheet. As of December 31, 2023 the ratio between Matrix IT’s financial debts and liabilities to banks versus Matrix IT total assets was 7.7%. (ii)The ratio of Matrix IT net debt to the annual EBITDA will not exceed 3.5. As of December 31, 2023, Matrix IT ratio of net debt to EBITDA was 0.53. (iii)Matrix IT equity shall not be lower than NIS 275,000 thousand (approximately $75,820) at all times. As of December 31, 2023 Matrix IT’s equity was approximately NIS 1,049,000 thousand (approximately $289,220). (iv)Matrix IT cash and cash equivalents and short-term bank deposits shall not be less than NIS 50,000 thousand (approximately $13,785). In the context of Matrix IT’s issuance of Commercial Securities which are not listed, Matrix IT committed to maintain at least NIS 300,000 thousand (approximately $82,713) of liquid assets including unused approved bank credits. Such liquid assets should account for not less than NIS 200,000 thousand of cash and cash equivalent and short-term bank deposit (approximately $55,142). As of December 31, 2023, Matrix IT’s cash and cash equivalent and short-term bank deposits amounted to NIS 640,208 thousand (approximately $176,512). (v)Matrix IT has committed that the rate of ownership and control of Matrix IT-Systems shall never be below 50.1%. (vi)Matrix IT will not create any pledge on all or part of its property and assets in favor of any third party and will not provide any guarantee to secure any third party’s debts as they are today and as they will be without the banks’ consent (except for a first-rate fixed pledge on an asset which acquisition will be financed by a third party and which the pledge will be in his favor). (vii)Matrix IT will not sell and/or transfer all or part of its assets to others in any manner whatsoever without the banks’ advance written consent unless it is done in the ordinary course of business. | |||||||||||||
Matrix IT [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Equity attribute amount | $ 75,820 | ₪ 275,000 | ||||||||||||
Exceed percentage | 45% | |||||||||||||
Sapiens [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Description of financial covenants | (iii)a covenant not to distribute dividends unless (a) Sapiens equity attributable to Sapiens shareholders’ shall not be less than $160 million, (b) Sapiens net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) does not exceed 65% of net CAP (defined as financial indebtedness, net, plus total equity), (c) the amount of accumulated dividends from the issuance date and going forward shall not exceed Sapiens net income for the year ended December 31, 2016 and the first three quarters of the year ended December 31, 2017, plus 75% of Sapiens accumulated profits from September 1, 2017 and up to the date of distribution, and (d) no event of default shall have occurred. | |||||||||||||
Magic Software [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Description of liability to financial institution | of the loans with an Israeli financial institutions, Magic Software has undertaken to comply with the following financial covenants, as they will be expressed in its consolidated financial statements: (i)Magic Software’ equity will not be lower than $150 million (one hundred and fifty million U.S. Dollars at all times) - as of December 31, 2023 Magic Software shareholders’ equity was $290,944; (ii)The ratio of Magic Software’ total financial debts less cash to total assets will not exceed 30% - as of December 31, 2023 Magic Software financial debts less cash were negative (-5%, since cash exceeds indebtedness); and (iii)The ratio of Magic Software’s total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 – as of December 31, 2023 the ratio of Magic Software’s net financial indebtedness to EBITDA was negative (-0.31) (cash exceeds indebtedness). | |||||||||||||
Private Placement [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Additional units (in New Shekels) | ₪ | ₪ 200,000 | |||||||||||||
Formula Debentures [Member] | ||||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||||
Equity attribute amount | $ 290,000,000 | |||||||||||||
Exceed percentage | 50% |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares | Dec. 31, 2023 shares |
Matrix [Member] | |
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares [Line Items] | |
Formula’s series A secured Debentures | 4,128,865 |
Formula’s series C secured debentures | 6,169,761 |
Magic Software [Member] | |
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares [Line Items] | |
Formula’s series A secured Debentures | 5,825,681 |
Formula’s series C secured debentures | 3,141,474 |
Sapiens [Member] | |
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares [Line Items] | |
Formula’s series A secured Debentures | 1,260,266 |
Formula’s series C secured debentures | 2,957,590 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares (Parentheticals) - Dec. 31, 2023 | ₪ / shares | $ / shares |
Matrix [Member] | ||
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares (Parentheticals) [Line Items] | ||
Formula’s series A secured Debentures, Par value | ₪ 1 | |
Formula’s series C secured debentures, Par value | 1 | |
Magic Software [Member] | ||
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares (Parentheticals) [Line Items] | ||
Formula’s series A secured Debentures, Par value | 0.1 | |
Formula’s series C secured debentures, Par value | ₪ 0.1 | |
Sapiens [Member] | ||
Commitments and Contingencies (Details) - Schedule of Composition of Pledged Shares (Parentheticals) [Line Items] | ||
Formula’s series A secured Debentures, Par value (in Dollars per share) | $ / shares | $ 0.01 | |
Formula’s series C secured debentures, Par value (in Dollars per share) | $ / shares | $ 0.01 |
Equity (Details)
Equity (Details) ₪ / shares in Units, $ / shares in Units, ₪ in Thousands, $ in Thousands | Dec. 31, 2023 ₪ / shares shares | May 30, 2023 USD ($) $ / shares | May 30, 2023 ILS (₪) ₪ / shares | Nov. 30, 2022 USD ($) $ / shares | Nov. 30, 2022 ILS (₪) ₪ / shares | Mar. 31, 2022 USD ($) $ / shares | Mar. 31, 2022 ILS (₪) ₪ / shares | Aug. 31, 2021 USD ($) $ / shares | Aug. 31, 2021 ILS (₪) ₪ / shares | Feb. 28, 2021 USD ($) $ / shares | Feb. 28, 2021 ILS (₪) ₪ / shares |
Business Combination, Significant Transaction and Sale of Business [Abstract] | |||||||||||
Dividend per share | (per share) | ₪ 1 | $ 0.63 | ₪ 2.3 | $ 0.62 | ₪ 2.16 | $ 0.78 | ₪ 2.56 | $ 0.78 | ₪ 2.53 | $ 0.66 | ₪ 2.16 |
Ordinary shares (in Shares) | 568,620 | ||||||||||
Dividend payables | $ 9,605 | ₪ 35,265 | $ 9,571 | ₪ 33,086 | $ 12,018 | ₪ 39,213 | $ 11,932 | ₪ 38,694 | $ 10,155 | ₪ 33,036 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of Share Capital - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 05, 2023 | |
Schedule of Share Capital [Abstract] | |||
Authorized | 25,000,000 | 25,000,000 | |
Issued | 15,901,287 | 15,886,287 | 45 |
Outstanding | 15,332,667 | 15,317,667 |
Equity (Details) - Schedule o_2
Equity (Details) - Schedule of Share Capital (Parentheticals) - ₪ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Share Capital [Abstract] | ||
Authorized, par value | ₪ 1 | ₪ 1 |
Issued, par value | 1 | 1 |
Outstanding, par value | ₪ 1 | ₪ 1 |
Income Tax (Details)
Income Tax (Details) ₪ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Nov. 30, 2022 USD ($) | Nov. 30, 2022 ILS (₪) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 ILS (₪) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 ILS (₪) | Dec. 31, 2016 | Nov. 30, 2022 ILS (₪) | |
Income Tax (Details) [Line Items] | |||||||||
Statutory tax rate in Israel | 23% | 23% | 23% | ||||||
Minimum tax rate | 6% | 6% | |||||||
Accumulated tax exempt | $ 7,100 | ₪ 25,022 | $ 35,048 | ₪ 109,000 | |||||
Deferred tax liability | $ 711 | $ 3,531 | ₪ 2,502 | ||||||
Income tax percentage | 90% | 90% | |||||||
Undistributed earnings of foreign subsidiaries and affiliates | $ 218,328 | $ 185,636 | |||||||
Cash and cash equivalents held by the Group's investees outside of Israel | $ 84,373 | $ 81,756 | |||||||
Federal corporate income tax rate, description | The TCJA reduces the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. | The TCJA reduces the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. | |||||||
Cumulative losses for tax purposes | $ 164,842 | ||||||||
Israeli subsidiaries [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Cumulative losses for tax purposes | 114,977 | ||||||||
Subsidiaries Abroad [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Cumulative losses for tax purposes | 49,865 | ||||||||
Matrix Global Services USA Inc [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Interest rate | 60% | ||||||||
Matrix US Holding LLC [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Interest rate | 95% | ||||||||
Zap [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Carry-forward tax losses | 7,285 | ₪ 26,422 | |||||||
Michpal [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Carry-forward tax losses | 547 | ||||||||
Preferred Technology Enterprise [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Description of new amendment tax rate | According to the 2017 Amendment, a Preferred Technological Enterprise, as defined in the 2017 Amendment, with total consolidated revenues of the group companies is less than NIS 10 billion, shall be subject to 12% tax rate on income derived from intellectual property (in development area A—a tax rate of 7.5%). In order to qualify as a Preferred technological enterprise certain criterion must be met, such as a minimum ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual revenues derived from exports. A Preferred Technology Enterprise that acquires Benefited Intangible Assets from a foreign company for more than NIS 200 million after January 1, 2017, will be eligible for 12% reduce tax rate on capital gain upon sale of the Benefited Intangible Assets.The 2017 Amendment further provides that a technology company satisfying certain conditions will qualify as a Special Preferred Technology Enterprise (“SPTE”) (an enterprise for which, among others, total consolidated revenues of its parent company and all subsidiaries is at least NIS 10 billion) and will thereby enjoy a reduced corporate tax rate of 6% on PTI regardless of the company’s geographic location within Israel. In addition, a SPTE will enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain “Benefited Intangible Assets” to a related foreign company if the Benefited Intangible Assets were either developed by the Special Preferred Technology Enterprise or acquired from a foreign company on or after January 1, 2017.Starting from 2017 under Amendment 73 to the Investment Law, part of the Group’s taxable income in Israel is entitled to a preferred 12% tax rate. Since 2019, under SPTE the tax rate for part of the Group’s taxable income in Israel has been reduced to a 6% corporate tax rate. | ||||||||
Formula [Member] | Israeli subsidiaries [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Cumulative losses for tax purposes | $ 71,280 | ₪ 258,535 | |||||||
Matrix IT [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Income tax assessments, description | Matrix IT and part of its Israeli subsidiaries have received final tax assessments through the year 2018 (or assessments that are deemed final). | Matrix IT and part of its Israeli subsidiaries have received final tax assessments through the year 2018 (or assessments that are deemed final). | |||||||
Matrix IT [Member] | Israeli subsidiaries [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Cumulative losses for tax purposes | $ 12,312 | ₪ 44,655 | |||||||
Magic Software [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Cumulative losses for tax purposes | 27,456 | ||||||||
Sapiens [Member] | |||||||||
Income Tax (Details) [Line Items] | |||||||||
Cumulative losses for tax purposes | $ 37,947 | ||||||||
Income tax assessments, description | Sapiens and part of its Israeli subsidiaries have received final tax assessments through the year 2018 (or assessments that are deemed final). | Sapiens and part of its Israeli subsidiaries have received final tax assessments through the year 2018 (or assessments that are deemed final). |
Income Tax (Details) - Schedule
Income Tax (Details) - Schedule of Consolidated Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Consolidated Statements of Financial Position [Abstract] | ||
Deferred taxes assets | $ 46,856 | $ 42,027 |
Deferred tax liabilities | (59,206) | (59,465) |
Total | $ (12,350) | $ (17,438) |
Income Tax (Details) - Schedu_2
Income Tax (Details) - Schedule of Composition ₪ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2023 ILS (₪) | Dec. 31, 2022 ILS (₪) | |
Schedule of Composition [Abstract] | ||||
Net operating losses carried forward | $ 13,744 | $ 10,296 | ||
Intangibles, fixed asset and right-of-use assets | (36,021) | (39,307) | ||
Lease liability | 767 | (166) | ||
Differences in measurement basis (cash basis for tax purposes) | 377 | 2,213 | ||
Other | 8,783 | 9,526 | ||
Total | $ (12,350) | $ (17,438) | ₪ (14,695) | ₪ (15,260) |
Income Tax (Details) - Schedu_3
Income Tax (Details) - Schedule of Pre-Tax Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax (Details) - Schedule of Pre-Tax Income [Line Items] | |||
Total | $ 211,034 | $ 256,710 | $ 184,011 |
Domestic (Israel) [Member] | |||
Income Tax (Details) - Schedule of Pre-Tax Income [Line Items] | |||
Total | 126,360 | 181,953 | 137,213 |
Foreign [Member] | |||
Income Tax (Details) - Schedule of Pre-Tax Income [Line Items] | |||
Total | $ 84,674 | $ 47,757 | $ 46,798 |
Income Tax (Details) - Schedu_4
Income Tax (Details) - Schedule of Income Tax (Tax Benefit) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Income Tax (Tax Benefit) [Abstract] | |||
Current taxes | $ 54,743 | $ 75,407 | $ 52,956 |
Deferred taxes | (8,668) | (20,172) | (10,342) |
Total | $ 46,075 | $ 55,235 | $ 42,614 |
Income Tax (Details) - Schedu_5
Income Tax (Details) - Schedule of Consolidated Statements of Profit or Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Consolidated Statements of Profit or Loss [Abstract] | |||
Income before income taxes, as per the statement of operations | $ 211,034 | $ 256,710 | $ 184,011 |
Statutory tax rate in Israel | 23% | 23% | 23% |
Tax computed at the statutory tax rate | $ 48,538 | $ 59,043 | $ 42,323 |
Non-deductible expenses (non-taxable income) net and tax-deductible costs not included in the accounting costs | 3,705 | 720 | 3,667 |
Effect of different tax rates | (874) | (1,273) | 852 |
Release of trapped earnings (see Note 23(a)(2) | 711 | 3,531 | |
Effect of “Approved, Beneficiary or Preferred Enterprise” status | (1,907) | (5,579) | (7,338) |
Deferred taxes on current losses (utilization of carry forward losses) and temporary differences for which a valuation allowance was provided, net | (2,070) | 448 | (84) |
Undistributed earnings | (260) | (461) | |
Taxes in respect of prior years | 558 | 890 | 891 |
Uncertain tax positions | (2,293) | 3,065 | 401 |
Other | 678 | (2,329) | (1,629) |
Total | $ 46,075 | $ 55,235 | $ 42,614 |
Income Tax (Details) - Schedu_6
Income Tax (Details) - Schedule of Total Unrecognized Tax Benefits - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Total Unrecognized Tax Benefits [Abstract] | ||
Beginning Balance | $ 12,941 | $ 10,540 |
Decrease in tax positions | (1,556) | (1,042) |
Increase in tax positions | 1,573 | 4,455 |
Statue limitation | (2,115) | (1,012) |
Ending Balance | $ 10,843 | $ 12,941 |
Supplementary Financial State_3
Supplementary Financial Statement Information (Details) - Schedule of Non-Controlling Interest in Material Partially-Owned Subsidiaries - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Supplementary Financial Statement Information (Details) - Schedule of Non-Controlling Interest in Material Partially-Owned Subsidiaries [Line Items] | ||
Non-controlling interest | $ 682,423 | $ 625,049 |
Matrix IT and its subsidiaries [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Non-Controlling Interest in Material Partially-Owned Subsidiaries [Line Items] | ||
Non-controlling interest | 176,092 | 155,886 |
Sapiens and its subsidiaries [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Non-Controlling Interest in Material Partially-Owned Subsidiaries [Line Items] | ||
Non-controlling interest | 341,124 | 316,319 |
Magic Software and its subsidiaries [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Non-Controlling Interest in Material Partially-Owned Subsidiaries [Line Items] | ||
Non-controlling interest | 162,395 | 151,253 |
Other [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Non-Controlling Interest in Material Partially-Owned Subsidiaries [Line Items] | ||
Non-controlling interest | $ 2,812 | $ 1,291 |
Supplementary Financial State_4
Supplementary Financial Statement Information (Details) - Schedule of Revenue by Products and Services - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Revenue by Products and Services [Abstract] | |||
Proprietary software and related services | $ 693,426 | $ 659,470 | $ 632,986 |
Other products and third party | 503,327 | 494,344 | 472,045 |
Services | 1,424,150 | 1,418,543 | 1,299,345 |
Total | $ 2,620,903 | $ 2,572,357 | $ 2,404,376 |
Supplementary Financial State_5
Supplementary Financial Statement Information (Details) - Schedule of Revenue by Timing of Revenue Recognition - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Revenue by Timing of Revenue Recognition [Abstract] | |||
Products and services transferred over time | $ 2,246,470 | $ 2,251,416 | $ 2,072,841 |
Products transferred at a point in time | 374,433 | 320,941 | 331,535 |
Total | $ 2,620,903 | $ 2,572,357 | $ 2,404,376 |
Supplementary Financial State_6
Supplementary Financial Statement Information (Details) - Schedule of Selling, Marketing, General and Administrative Expenses - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Supplementary Financial Statement Information (Details) - Schedule of Selling, Marketing, General and Administrative Expenses [Line Items] | |||
Total Selling, marketing, general and administrative expenses | $ 326,375 | $ 317,956 | $ 289,985 |
Wages and related expenses [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Selling, Marketing, General and Administrative Expenses [Line Items] | |||
Total Selling, marketing, general and administrative expenses | 223,351 | 214,118 | 200,435 |
Depreciation and amortization [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Selling, Marketing, General and Administrative Expenses [Line Items] | |||
Total Selling, marketing, general and administrative expenses | 51,632 | 49,556 | 46,479 |
Subcontractors [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Selling, Marketing, General and Administrative Expenses [Line Items] | |||
Total Selling, marketing, general and administrative expenses | 11,271 | 11,701 | 10,746 |
Advertising [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Selling, Marketing, General and Administrative Expenses [Line Items] | |||
Total Selling, marketing, general and administrative expenses | 16,959 | 19,412 | 15,598 |
Maintenance and other expenses [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Selling, Marketing, General and Administrative Expenses [Line Items] | |||
Total Selling, marketing, general and administrative expenses | $ 23,162 | $ 23,169 | $ 16,727 |
Supplementary Financial State_7
Supplementary Financial Statement Information (Details) - Schedule of Financial Income and Expenses - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Financial expenses: | |||
Financial expenses related to liabilities in respect of business combinations | $ 775 | $ 1,081 | $ 3,539 |
Interest expenses on loans and borrowings | 18,540 | 9,837 | 6,249 |
Financial costs related to Debentures | 3,928 | 3,775 | 6,948 |
Interest expenses attributed to IFRS 16 | 7,195 | 4,822 | 4,873 |
Derivatives loss | 2,991 | 1,193 | |
Bank charges, negative foreign exchange differences and other financial expenses | 8,705 | 6,508 | 8,385 |
Financial expenses | 42,134 | 27,216 | 29,994 |
Financial income: | |||
Income from marketable securities and embedded derivative | 3,338 | ||
PPP loan forgiveness | 1,465 | ||
Interest income from deposits, positive foreign exchange differences and other financial income | 13,800 | 5,821 | 2,651 |
Financial income | 13,800 | 7,286 | 5,989 |
Financial expenses, net | $ 28,334 | $ 19,930 | $ 24,005 |
Supplementary Financial State_8
Supplementary Financial Statement Information (Details) - Schedule of Property and Equipment Located - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Supplementary Financial Statement Information (Details) - Schedule of Property and Equipment Located [Line Items] | ||
Property and equipment | $ 52,931 | $ 54,971 |
Israel [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Property and Equipment Located [Line Items] | ||
Property and equipment | 44,145 | 45,994 |
United States [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Property and Equipment Located [Line Items] | ||
Property and equipment | 4,369 | 3,563 |
Europe [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Property and Equipment Located [Line Items] | ||
Property and equipment | 1,102 | 1,834 |
Japan [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Property and Equipment Located [Line Items] | ||
Property and equipment | 144 | 153 |
Other [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of Property and Equipment Located [Line Items] | ||
Property and equipment | $ 3,171 | $ 3,427 |
Supplementary Financial State_9
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) [Line Items] | |||
Revenues | $ 2,620,903 | $ 2,572,357 | $ 2,404,376 |
Israel [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) [Line Items] | |||
Revenues | 1,600,763 | 1,571,035 | 1,506,566 |
United States [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) [Line Items] | |||
Revenues | 644,918 | 680,325 | 591,794 |
Europe [Member[ | |||
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) [Line Items] | |||
Revenues | 315,081 | 262,303 | 255,680 |
Africa [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) [Line Items] | |||
Revenues | 26,035 | 26,692 | 18,012 |
Japan [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) [Line Items] | |||
Revenues | 11,881 | 11,333 | 12,890 |
Other (mainly Asia pacific) [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of Revenues Classified by Geographic Area (Based on the Location of Customers) [Line Items] | |||
Revenues | $ 22,225 | $ 20,669 | $ 19,434 |
Supplementary Financial Stat_10
Supplementary Financial Statement Information (Details) - Schedule of Computation of Basic and Diluted Net Earnings Per Share - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Basic earnings per share – net income attributable to equity holders of the Company (in Dollars) | $ 64,014 | $ 81,393 | $ 54,585 |
Diluted earnings per share – net income attributable to equity holders of the Company (in Dollars) | $ 63,878 | $ 80,794 | $ 53,974 |
Denominator: | |||
Basic earnings per share – weighted average shares outstanding | 15,301 | 15,296 | 15,290 |
Effect of dilutive securities | 197 | 207 | 114 |
Diluted earnings per share – adjusted weighted average shares outstanding | 15,498 | 15,503 | 15,404 |
Basic net earnings per share (in Dollars per share) | $ 4.19 | $ 5.31 | $ 3.57 |
Diluted net earnings per share (in Dollars per share) | $ 4.12 | $ 5.21 | $ 3.5 |
Operating Segments (Details)
Operating Segments (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Information Technologies (IT) Software solutions and services, Consulting & Management in Israel [Member] | |
Operating Segments (Details) [Line Items] | |
Percentage of revenue | 55% |
Percentage of operating income | 48% |
Information Technologies (IT) Software solutions and services in the United States [Member] | |
Operating Segments (Details) [Line Items] | |
Percentage of revenue | 9% |
Percentage of operating income | 19% |
Training and Integration [Member] | |
Operating Segments (Details) [Line Items] | |
Percentage of revenue | 3% |
Percentage of operating income | 3% |
Computer and Cloud Infrastructure and Integration Solutions [Member] | |
Operating Segments (Details) [Line Items] | |
Percentage of revenue | 27% |
Percentage of operating income | 21% |
Software Product Marketing And Support [Member] | |
Operating Segments (Details) [Line Items] | |
Percentage of revenue | 6% |
Percentage of operating income | 9% |
Michpal [Member] | |
Operating Segments (Details) [Line Items] | |
Payroll term | 30 years |
E-commerce Solutions [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | Zap Group provides an e-commerce platform for approximately 1,500 large, medium and small businesses, which operate stores in Israel. The platform, both website and application, allow end users to compare prices of the various stores for over 1.2 million products in 650 categories. The platform provides to more than 120 million visiting end users annually, 300,000 reviews of stores and products and 5,000 quality guides (videos and articles), which allow them to engage through the platform directly with the stores for a purchase of a certain product they looked at through the platform. Total online purchases through the platform is estimated at approximately NIS 2 billion annually, which is estimated at 14% out of total online purchase volume in Israel (not including food and beverage). |
Digital platforms [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | Zap Group provides digital advertising platforms and services through 18 websites for medium and small businesses in 1,600 business categories in Israel, including doctors, lawyers, and other service and product providers. The platform, both website and application allow end users to contact directly with the service provider. The platform provides to more than 50 million visiting end users annually, 200,000 reviews, 2,000 quality guides (videos and articles), 300 price lists, and 700 forums with more than 1.5 million expert explanations. |
Restaurants and events [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | Zap Group provides digital advertising platforms and services for more than 17,000 restaurants listed and provides services for social events. Approximately 2,500 of them are paying customers. The platform, both website and application allow end users to directly contact the restaurant for table ordering, ordering of delivery or take away, to post visit reviews or explore the restaurant menu, photo gallery and other content such as articles, etc. The platform provides to more than 30 million visiting end users annually, approximately two million food deliveries, 200,000 reviews, 5,000 food and culinary articles (videos and articles), and more than 0.5 million push updates annually. |
Operating Segments (Details) -
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries [Line Items] | ||
Goodwill | $ 936,581 | $ 926,161 |
Matrix IT and its subsidiaries [Member] | ||
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries [Line Items] | ||
Goodwill | 285,596 | 288,235 |
Sapiens and its subsidiaries [Member] | ||
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries [Line Items] | ||
Goodwill | 401,699 | 397,613 |
Magic Software and its subsidiaries [Member] | ||
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries [Line Items] | ||
Goodwill | 166,065 | 158,699 |
Michpal and its subsidiaries [Member] | ||
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries [Line Items] | ||
Goodwill | 44,108 | 40,603 |
ZAP and its subsidiaries [Member] | ||
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries [Line Items] | ||
Goodwill | 32,186 | 33,081 |
Other consolidated subsidiaries [Member] | ||
Operating Segments (Details) - Schedule of Consolidated Goodwill in Material Partially Owned Subsidiaries [Line Items] | ||
Goodwill | $ 6,927 | $ 7,930 |
Operating Segments (Details) _2
Operating Segments (Details) - Schedule of Reporting on Operating Segments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | $ 2,620,903 | $ 2,572,357 | $ 2,404,376 |
Inter-segment revenues | |||
Total revenues | 2,620,903 | 2,572,357 | 2,404,376 |
Depreciation and amortization | 121,189 | 115,308 | 122,184 |
Segment operating income | 249,845 | 287,265 | 219,171 |
Unallocated corporate expenses | (10,477) | (10,625) | (11,155) |
Total operating income | 239,368 | 276,640 | 208,016 |
Financial expenses, net | (28,334) | (19,930) | (24,005) |
Group’s share of profits of companies accounted for at equity, net | 773 | (1,808) | 505 |
Taxes on income | (46,075) | (55,235) | (42,614) |
Net income | 165,732 | 199,667 | 141,902 |
Matrix IT [Member] | |||
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | 1,416,283 | 1,388,508 | 1,344,088 |
Inter-segment revenues | 3,579 | 4,310 | 6,529 |
Total revenues | 1,419,862 | 1,392,818 | 1,350,617 |
Depreciation and amortization | 55,230 | 48,288 | 45,736 |
Segment operating income | 106,831 | 149,298 | 102,054 |
Sapiens [Member] | |||
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | 514,584 | 474,736 | 461,035 |
Inter-segment revenues | |||
Total revenues | 514,584 | 474,736 | 461,035 |
Depreciation and amortization | 30,147 | 33,050 | 45,732 |
Segment operating income | 80,070 | 66,164 | 44,210 |
Magic Software [Member] | |||
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | 531,415 | 561,682 | 477,643 |
Inter-segment revenues | 3,637 | 5,110 | 2,682 |
Total revenues | 535,052 | 566,792 | 480,325 |
Depreciation and amortization | 20,553 | 19,804 | 19,837 |
Segment operating income | 57,108 | 61,762 | 59,785 |
Michpal [Member] | |||
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | 36,912 | 37,714 | 32,087 |
Inter-segment revenues | 309 | ||
Total revenues | 36,912 | 38,023 | 32,087 |
Depreciation and amortization | 4,801 | 4,770 | 4,023 |
Segment operating income | 6,366 | 8,117 | 6,838 |
ZAP Group [Member] | |||
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | 45,286 | 49,893 | 51,640 |
Inter-segment revenues | |||
Total revenues | 45,286 | 49,893 | 51,640 |
Depreciation and amortization | 8,090 | 7,976 | 7,486 |
Segment operating income | (3,126) | (1,042) | 5,962 |
Other [Member] | |||
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | 156,662 | 133,526 | 127,641 |
Inter-segment revenues | 525 | 360 | |
Total revenues | 157,187 | 133,886 | 127,641 |
Depreciation and amortization | 7,950 | 6,214 | 3,776 |
Segment operating income | 9,492 | 8,311 | 3,841 |
Adjustments [Member] | |||
Operating Segments (Details) - Schedule of Reporting on Operating Segments [Line Items] | |||
Revenues from external customers | (80,239) | (73,702) | (89,758) |
Inter-segment revenues | (7,741) | (10,089) | (9,211) |
Total revenues | (87,980) | (83,791) | (98,969) |
Depreciation and amortization | (5,582) | (4,794) | (4,406) |
Segment operating income | $ (6,896) | $ (5,345) | $ (3,519) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events [Member] ₪ / shares in Units, $ / shares in Units, $ in Thousands, ₪ in Millions | 3 Months Ended | ||
Apr. 04, 2024 USD ($) $ / shares | Mar. 31, 2024 USD ($) | Mar. 31, 2024 ILS (₪) ₪ / shares | |
Subsequent Events (Details) [Line Items] | |||
Cash dividend | $ 10,000 | ₪ 35.3 | |
Dividend per share | (per share) | $ 0.63 | ₪ 2.3 | |
Total consideration | $ 12,500 | ||
Consideration paid | 10,000 | ||
Consideration installments amount | $ 2,500 |