Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information Line Items | |
Entity Registrant Name | MAGIC SOFTWARE ENTERPRISES LTD |
Trading Symbol | MGIC |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 49,093,055 |
Amendment Flag | false |
Entity Central Index Key | 0000876779 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
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 | 0-19415 |
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 | Ordinary Shares, NIS 0.1 Par Value |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
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 (3) |
Local Phone Number | 538 9243 |
Contact Personnel Email Address | asafb@magicsoftware.com |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 83,062 | $ 88,090 | $ 88,127 |
Short-term bank deposits | 3,904 | 5,586 | 289 |
Trade receivables (net of allowance for credit losses of $3,967, $5,071 and $5,416 at January 1, 2021, December 31, 2021 and 2022, respectively) | 118,126 | 116,975 | 91,986 |
Unbilled receivables and contract assets | 30,354 | 25,096 | 19,073 |
Other accounts receivable and prepaid expenses | 13,652 | 11,027 | 11,751 |
Total current assets | 249,098 | 246,774 | 211,226 |
LONG-TERM ASSETS: | |||
Deferred tax assets | 3,618 | 7,993 | 6,235 |
Right-of-use assets | 27,536 | 23,280 | 23,363 |
Other long-term receivables | 5,795 | 5,165 | 5,507 |
Property, plants, and equipment, net | 8,338 | 5,872 | 5,988 |
Intangible assets, net | 52,057 | 51,390 | 53,404 |
Goodwill | 158,699 | 146,803 | 135,682 |
Total long-term assets | 256,043 | 240,503 | 230,179 |
Total assets | 505,141 | 487,277 | 441,405 |
CURRENT LIABILITIES: | |||
Short term debt | 20,755 | 17,108 | 11,598 |
Trade payables | 27,598 | 24,711 | 14,250 |
Accrued expenses and other accounts payable | 46,842 | 45,091 | 41,777 |
Current maturities of lease liabilities | 4,591 | 3,267 | 3,792 |
Put options of non-controlling interests | 27,172 | 23,197 | 14,611 |
Liability in respect of business combinations | 19,287 | 6,635 | 4,998 |
Deferred revenues and customer advances | 9,808 | 10,771 | 8,793 |
Total current liabilities | 156,053 | 130,780 | 99,819 |
LONG-TERM LIABILITIES: | |||
Long-term debt | 30,412 | 20,155 | 13,352 |
Long-term lease liabilities | 24,282 | 21,907 | 21,230 |
Liability in respect of business combinations | 5,376 | 13,892 | 10,926 |
Deferred tax liabilities | 10,686 | 17,945 | 17,484 |
Put options of non-controlling interests | 1,120 | 6,137 | 9,315 |
Accrued severance pay, net | 901 | 905 | 872 |
Total long-term liabilities | 72,777 | 80,941 | 73,179 |
COMMITMENTS AND CONTINGENCIES | |||
MAGIC SOFTWARE ENTERPRISES LTD shareholders’ equity: | |||
Ordinary shares of NIS 0.1 par value - Authorized: 50,000,000 shares at January 1, 2021, December 31, 2021 and 2022; Issued and Outstanding: 49,035,055, 49,073,055 and 49,093,055 shares at January 1, December 31, 2021 and 2022, respectively | 1,166 | 1,165 | 1,164 |
Additional paid-in capital | 182,031 | 184,047 | 188,415 |
Accumulated other comprehensive income (loss) | (6,559) | 9,264 | 7,437 |
Retained earnings | 86,289 | 70,660 | 62,673 |
Total equity attributable to Magic Software Enterprises shareholders | 262,927 | 265,136 | 259,689 |
Non-controlling interests | 13,384 | 10,420 | 8,718 |
Total equity | 276,311 | 275,556 | 268,407 |
Total liabilities and equity | $ 505,141 | $ 487,277 | $ 441,405 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parentheticals) $ in Thousands | Dec. 31, 2022 USD ($) shares | Dec. 31, 2022 ₪ / shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2021 ₪ / shares | Jan. 01, 2021 USD ($) shares | Jan. 01, 2021 ₪ / shares |
Statement of financial position [abstract] | ||||||
Trade receivables, net of allowance (in Dollars) | $ | $ 5,416 | $ 5,071 | $ 3,967 | |||
Ordinary shares, par value (in New Shekels per share) | ₪ / shares | ₪ 0.1 | ₪ 0.1 | ₪ 0.1 | |||
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |||
Ordinary shares, shares issued | 49,093,055 | 49,073,055 | 49,035,055 | |||
Ordinary shares, shares outstanding | 49,093,055 | 49,073,055 | 49,035,055 |
Consolidated Statements of Prof
Consolidated Statements of Profit or Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | ||
Software services | $ 32,930 | $ 30,934 |
Maintenance and technical support | 34,762 | 36,149 |
Consulting services | 499,100 | 413,242 |
Total revenues | 566,792 | 480,325 |
Cost of revenues: | ||
Software services | 10,701 | 12,182 |
Maintenance and technical support | 3,494 | 4,144 |
Consulting services | 397,242 | 331,005 |
Total cost of revenues | 411,437 | 347,331 |
Gross profit | 155,355 | 132,994 |
Research and development expenses, net | 10,090 | 8,995 |
Selling and marketing expenses | 46,857 | 38,147 |
General and administrative expenses | 37,552 | 31,222 |
Change in valuation of contingent consideration related to acquisitions | (906) | 2,507 |
Operating income | 61,762 | 52,123 |
Financial expenses | (4,993) | (3,802) |
Financial income | 1,392 | 113 |
Increase in valuation of consideration related to acquisitions) | (744) | (2,817) |
Income before taxes on income | 57,417 | 45,617 |
Taxes on income | 11,138 | 10,278 |
Net income | 46,279 | 35,339 |
Attributable to: | ||
Equity holders of the Company | 40,470 | 29,767 |
Non-controlling interests | 5,809 | 5,572 |
Net income | $ 46,279 | $ 35,339 |
Net earnings per share attributable to equity holders of The Company | ||
Basic and diluted earnings per share (in Dollars per share) | $ 0.82 | $ 0.61 |
Consolidated Statements of Pr_2
Consolidated Statements of Profit or Loss (Parentheticals) | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
Profit or loss [abstract] | |
Diluted earnings per share (in Dollars per share) | $ 0.82 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements Of Comprehensive Income Abstract | ||
Net income | $ 46,279 | $ 35,339 |
Other comprehensive income (loss) net of tax effect: | ||
Foreign exchange differences on translation of foreign operations | (19,099) | 2,750 |
Total other comprehensive income (loss), net of tax | (19,099) | 2,750 |
Total Comprehensive income | 27,180 | 38,089 |
Total comprehensive income attributable to: | ||
Equity holders of the Company | 24,647 | 31,594 |
Non-controlling interests | 2,533 | 6,495 |
Total Comprehensive income | $ 27,180 | $ 38,089 |
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) | Non-controlling interests | Total |
Balance at Dec. 31, 2020 | $ 1,164 | $ 188,415 | $ 62,673 | $ 7,437 | $ 8,718 | $ 268,407 |
Balance (in Shares) at Dec. 31, 2020 | 49,035,055 | |||||
Net income | 29,767 | 5,572 | 35,339 | |||
Other comprehensive income (loss) | 1,827 | 923 | 2,750 | |||
Total comprehensive income (loss) | 29,767 | 1,827 | 6,495 | 38,089 | ||
Exercise of options | $ 1 | 40 | 41 | |||
Exercise of options (in Shares) | 38,000 | |||||
Dividend to Magic’s shareholders | (21,780) | (21,780) | ||||
Dividend to non-controlling interests in subsidiaries | (4,233) | (4,233) | ||||
Cost of share-based payment | 956 | 956 | ||||
Acquisition of subsidiaries | 719 | 719 | ||||
Settlement of put options over non-controlling interest | (5,364) | (1,279) | (6,643) | |||
Balance at Dec. 31, 2021 | $ 1,165 | 184,047 | 70,660 | 9,264 | 10,420 | 275,556 |
Balance (in Shares) at Dec. 31, 2021 | 49,073,055 | |||||
Net income | 40,470 | 5,809 | 46,279 | |||
Other comprehensive income (loss) | (15,823) | (3,276) | (19,099) | |||
Total comprehensive income (loss) | 40,470 | (15,823) | 2,533 | 27,180 | ||
Exercise of options | $ 1 | 1 | ||||
Exercise of options (in Shares) | 20,000 | |||||
Dividend to Magic’s shareholders | (24,841) | (24,841) | ||||
Dividend to non-controlling interests in subsidiaries | (4,170) | (4,170) | ||||
Cost of share-based payment | (56) | 2,135 | 2,079 | |||
Acquisition of redeemable non-controlling interests | (721) | (133) | (854) | |||
Settlement of put options over non-controlling interest | (1,239) | 2,599 | 1,360 | |||
Balance at Dec. 31, 2022 | $ 1,166 | $ 182,031 | $ 86,289 | $ (6,559) | $ 13,384 | $ 276,311 |
Balance (in Shares) at Dec. 31, 2022 | 49,093,055 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 46,279 | $ 35,339 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 19,795 | 19,837 |
Cost of share-based payment | 2,079 | 956 |
Changes in value of short-term and long-term loans from banks and others and deposits, net | (1,686) | 71 |
Changes in deferred taxes, net | (3,904) | (3,080) |
Payments of deferred and contingent consideration related to acquisitions | (3,919) | (556) |
Effect of exchange rate on of cash and cash equivalents held in currencies other than the functional currency | 3,747 | |
Amortization of premium and accrued interest on debt instruments at fair value through other comprehensive income | 76 | 96 |
Working capital adjustments: | ||
Trade receivables | (2,569) | (27,539) |
Accrued expenses and other accounts payable | (975) | 5,415 |
Other current and long-term accounts receivable | (1,934) | 263 |
Trade payables | 139 | 8,792 |
Deferred revenues | (513) | 4,080 |
Net cash provided by operating activities | 56,615 | 43,674 |
Cash flows from investing activities: | ||
Payments for business acquisitions, net of cash acquired (Appendix A) | (21,670) | (6,833) |
Loan extended to related party | (2,250) | |
Cash paid in conjunction with deferred payments and contingent liabilities related to business combinations | (4,870) | (5,342) |
Purchase of intangible assets | (219) | |
Purchase of property and equipment | (4,381) | (1,439) |
Redemption of marketable securities | 309 | |
Change in short-term deposits | 1,682 | (5,390) |
Capitalization of software development | (3,059) | (3,193) |
Net cash used in investing activities | (34,458) | (22,197) |
Cash flows from financing activities: | ||
Exercise of employees’ stock options | 1 | 41 |
Dividend paid to non-controlling interests | (4,170) | (4,233) |
Dividend to Magic’s shareholders | (24,841) | (21,780) |
Repayment of long-term loans from banks and others | (14,323) | (14,467) |
Receipt of long-term loans from banks and others | 30,703 | 25,558 |
Repayment of lease liabilities | (4,792) | (5,874) |
Cash paid due to exercise of put option by non-controlling interests | (854) | (511) |
Net cash used in financing activities | (18,276) | (21,266) |
Effect of exchange rate changes on cash and cash equivalents | (8,909) | (249) |
Decrease in cash and cash equivalents | (5,028) | (38) |
Cash and cash equivalents at beginning of year | 88,090 | 88,127 |
Cash and cash equivalents at end of year | 83,062 | 88,090 |
Fair value of assets acquired and liabilities assumed at the date of acquisition: | ||
Net assets, excluding acquired cash | (1,168) | 506 |
Intangible assets, net of deferred taxes | (13,552) | (4,817) |
Goodwill | (22,370) | (8,544) |
Deferred and contingent liabilities assumed in current year business combinations | 15,420 | 5,303 |
Non-controlling interests | 719 | |
Cash paid in conjunction with acquisitions, net of acquired cash total | (21,670) | (6,833) |
Non-cash activities: | ||
Right-of-use asset recognized with corresponding lease liability | 6,349 | 2,801 |
Income taxes | 14,457 | 13,050 |
Interest | $ 1,306 | $ 1,264 |
General
General | 12 Months Ended |
Dec. 31, 2022 | |
General [Abstract] | |
GENERAL | NOTE 1:- GENERAL MAGIC SOFTWARE ENTERPRISES LTD., an Israeli company (“the Company” or “the Company”), is a global provider of: (i) proprietary application development and business process integration platforms that accelerate the planning, development, deployment and integration of on-premise, mobile and cloud business applications (“the Magic Technology”); (ii) selected packaged vertical software solutions; and (iii) a vendor of software services and IT outsourcing software services. Magic 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. To complement its software products and to increase its traction with customers, the Company also offers a complete portfolio of software services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental IT professional outsourcing services. The Company reports its results on the basis of two reportable business segments: software services (which include proprietary and non-proprietary software solutions, maintenance and support and related services) and IT professional services (see Note 22 for further details). The Company’s principal markets are the United States, Israel, Europe and Japan (see Note 22). For information about the Company’s holdings in subsidiaries and affiliates, see Appendix to the consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Significant Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- SIGNIFICANT 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 financial statements for the year ended December 31, 2021 were the Company’s first consolidated financial statements prepared in accordance with IFRS. The date of transition to IFRS was January 1, 2021. For all periods up to and including the year ended December 31, 2021, the Company prepared its financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Accordingly, the Company’s first consolidated financial statements that comply with IFRS are applicable as of December 31, 2022, together with the comparative period data for the year ended December 31, 2021 (See also Note 22 to our consolidated financial statements). Measurement basis: The Company’s consolidated financial statements are prepared on a cost basis, except for financial assets measured at fair value through other comprehensive income (“OCI”), employee benefit assets and liabilities, and financial assets and liabilities which are presented at fair value through profit or loss. (See Note 6). 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 liabilities in respect of business combinations, goodwill and intangible assets and their subsequent impairment analysis, determination of fair value of put options of non-controlling interests, legal contingencies, research and development capitalization as well as amortization periods, classification of leases as well as the determination of the lease term and the incremental borrowing rate, 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, identification of performance obligations and the determination of the transaction price as well as the standalone selling prices, and evaluating expected credit losses (“ECL”). 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 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 subsidiaries are prepared for the same reporting period and using consistent accounting treatment of similar transactions and economic activities. Significant intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements. 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. 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 chooses 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. In a business combination achieved in stages, equity interests in the acquiree that had been held by the acquirer prior to obtaining control are measured at the acquisition date fair value while recognizing a gain or loss resulting from the revaluation of the prior investment on the date of achieving control. A put option granted by the Group to non-controlling interests is accounted for using the expected purchase approach under the presumption that the put option will be exercised, and therefore the parent effectively holds an interest in the subsidiary’s shares as if the put option had been exercised. A put option granted by the Group to non-controlling interests for which the consideration to be paid in cash or other financial asset is recognized as a liability in the amount of the present value of the option’s exercise price. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset or liability in accordance with IFRS 9. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. 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) Functional currency, presentation currency and foreign currency: i. Functional currency and presentation currency: The presentation currency of these financial statements is the U.S dollars (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. Also, the dollar is the currency of the primary economic environment in which the Company and certain subsidiaries operate. Thus, the functional and reporting currency of the Company and certain subsidiaries is the dollar. Assets, including fair value adjustments upon acquisition, and liabilities of an investee which is a foreign operation, 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). 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. 7) Cash equivalents: Cash equivalents are considered short-term highly liquid investments, that are readily convertible to cash with original maturities of three months or less, at acquisition. Cash and cash equivalents include amounts held primarily in NIS, dollar, Euro, Japanese Yen and British Pound. 8) Short-term bank deposits: Short-term bank 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 at a cost (including accrued interest) which approximates their fair value. 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 January 1, 2021, December 31, 2021 and 2022, the Company’s bank deposits are mainly denominated in U.S. dollars and bear yearly interest rates of mainly 0.27%, 0.27% and 3.54%, respectively. 9) Revenue recognition: Revenues are recognized when control of the promised goods or services are transferred to the customers, in an amount that reflects the consideration that the company expects to receive in exchange for those goods or services. The Company determines revenue recognition through the following steps: ● identification of the contract with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, the Company satisfies a performance obligation. The Company enters into contracts that can include various combinations of products, software and professional services, as detailed below, which are generally distinct from each other and accounted for as separate performance obligations. The Company derives its revenues from licensing the rights to use its software (proprietary and non-proprietary), provision of related professional services, maintenance and technical support as well as from other software and IT professional services (either fixed price or based on time and materials). The Company sells its products primarily through direct sales force and indirectly through distributors and value added resellers. Under IFRS 15, an entity recognizes revenue when or as it satisfies a performance obligation by transferring software license or software related services to the customer, either at a point in time or over time. When the Company enters into a contract for the sale of software license which does not require significant implementation services, and the customer receives the rights to use the perpetual or term-based software license, the Company recognizes revenue from the sale of the software license at the time of delivery, when the customer receives control of the software license. The software license is considered a distinct performance obligation recognized at a point-in-time, as the customer can benefit from the software on its own or together with other readily available resources. Revenue from long term contracts which involve significant implementation, customization, or integration of the Company’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 Company. The Company recognizes revenue of such contracts over time using cost inputs, which recognize revenue and gross profit as work is performed based on a ratio between actual costs incurred compared to the total estimated costs for the contract, to measure progress toward completion of its performance obligations. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. In addition, the Company provides professional services that do not involve significant customization to customer-specific specifications (typically staffing or consulting services). The revenue is recognized as the services are performed, either on a straight-line basis or based on the hours of services that were provided to the customer, in accordance with the terms of the contracts. The Company’s revenues from post contract support are derived from annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee, as well as technical support for software licenses previously sold. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. The Company considers the post contract support performance obligation as a distinct performance obligation that is satisfied over time, and recognized on a straight-line basis over the contractual period. Revenue from professional services, both related to software and IT professional services businesses consists of either fixed price or time and materials, and are considered performance obligations that are satisfied over time, and revenues are recognized as the services are provided. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Stand-alone selling prices of software licenses are typically estimated using the residual approach. Stand-alone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. When another party is involved in providing goods or services to the customer, the Company examines whether the nature of its promise is a performance obligation to provide the defined goods or services itself, which means the Company is a principal and therefore recognizes revenue in the gross amount of the consideration, or to arrange that another party provide the goods or services which means the Company is an agent and therefore recognizes revenue in the amount of the net commission. The Company is a principal when it controls the promised goods or services before their transfer to the customer. Indicators that the Company controls the goods or services before their transfer to the customer include, inter alia, as follows: the Company is responsible for fulfilling the promises in the contract; the Company has inventory risk before the goods or services are transferred to the customer; and the Company has discretion in setting the prices of the goods or services. Revenue from third-party sales is recorded at a gross or net amount according to certain indicators. The application of these indicators for gross and net reporting of revenue depends on the relative facts and circumstances of each sale. The Company pays commissions to sales and marketing and certain management personnel based on their attainment of certain predetermined sales or profit goals. The Company expenses sales commissions as they are incurred when the amortization period would have been less than one year. In addition, generally, sales commissions which are paid upon contract renewal are commensurate with the initial commissions as the renewal amounts are substantially identical to the initial commission costs. During the years ended December 31, 2022 and 2021, no costs have been capitalized. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. 10) 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 Company’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. ● Uncertain tax position: A provision for uncertain tax positions, including additional tax and interest expenses, is recognized when it is more likely than not that the Company will have to use its economic resources to pay the obligation. 11) Leases: The Company 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 Company as lessee For leases in which the Company is the lessee, the Company 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 Company 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 Company 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 Company’s incremental borrowing rate. After the commencement date, the Company 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 1–11 3 Motor vehicles 1–5 3 The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36. ii) Variable lease payments that depend on an index: On the commencement date, the Company uses the index rate prevailing on the commencement date to calculate the future lease payments. For leases in which the Company is the lessee, the aggregate changes in future lease payments resulting from a change in the index are discounted (without a change in the discount rate applicable to the lease liability) and recorded as an adjustment of the lease liability and the right-of-use asset, only when there is a change in the cash flows resulting from the change in the index (that is, when the adjustment to the lease payments takes effect). iii) 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 Company 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. iv) Lease modifications If a lease modification does not reduce the scope of the lease and does not result in a separate lease, the Company 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 Company 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 Company 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. 12) Property, plant and equipment, net: Property, plant and equipment are measured at cost, including directly attributable costs, less accumulated depreciation. 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 estimated useful life of the assets at annual rates as follows: Years Software 3–5 (mainly 5) Computers and peripheral equipment 3–5 Office furniture and equipment 7–15 (mainly 7) Motor vehicles 7 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. 13) Intangible assets: 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. Research and development expenditures Research expenditures incurred in the process of software development are recognized in profit or loss when incurred. An intangible asset arising from a software development project or from the development phase of an internal project is recognized if the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Company’s intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the ability to measure reliably the respective expenditure asset during its development. The Company establishes technological feasibility upon completion of a detailed program design or a working model. Capitalized software costs are measured at cost less any accumulated amortization and any accumulated impairment losses on a product-by-product basis. Amortization of capitalized software costs begin when development is complete, and the product is available for use or for sale. The Company considers a product to be available for use when the Company completes its internal validation of the product that is necessary to establish that the product meets its design specifications including functions, features, and technical performance requirements. Internal validation includes the completion of coding, documentation and testing that ensure bugs are reduced to a minimum. The internal validation of the product takes place a few weeks before the product is made available to the market. In certain instances, the Company enters into a short pre-release stage, during which the product is made available to a selected number of customers as a beta program for their own review and familiarization. Subsequently, the release is made generally available to customers. Once a product is considered available for use, the capitalization of costs ceases and amortization of such costs to “cost of sales” begins. Capitalized software costs are amortized on a product-by-product basis by the straight-line method over the estimated useful life of the software product (between 5-7 years). Research and development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. The Company assesses the recoverability of its capitalized software costs on a regular basis by assessing the net realizable value of these intangible assets based on the estimated future gross revenues from each product reduced by the estimated future costs of completing and disposing of it, including the estimated costs of performing maintenance and customer support over its remaining economical useful life using internally generated projections of future revenues generated by the products, cost of completion of products and cost of delivery to customers over its remaining economical useful life. 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 relationships Up to 15 Acquired technology Up to 10 (mainly 5) 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. 14) Impairment of non-financial assets: The Company evaluates the need to record an impairment of non-financial assets (property, plant and equipment, capitalized software costs and other intangible assets, goodwill) 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. 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 Company 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 subs |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 3:- BUSINESS COMBINATIONS Current year acquisitions a. On December 2, 2021, the Company entered into a Share Purchase Agreement (“the Agreement”) to acquire 50.1% of the outstanding share capital of Appush Ltd. (formerly known as Vidstart Ltd.) (“Appush”), a provider of a video advertising platform that offers personalized automated methods and real-time smart optimization, helping its clients achieve high yields in the competitive digital ecosystem, for $ 21,492. Of which, $ 11,042 was paid upon closing. The final closing and execution of the Agreement occurred on January 27, 2022. In addition, the Company paid $1.5 million as an advance payment for future acquisition of the remainder of Appush’s shares. According to the Agreement, the Company is obliged to purchase the remainder of Appush’s shares in stages until it will hold 100% of Appush’s shares on or before December 31, 2026. This obligation was accounted for as a financial liability measured at its fair value as of the acquisition date of $10,450. The fair value of the financial liability at December 31, 2022 was $8,560. On April 2022 and 2023, the Company acquired the remainder of Appush’s shares and it now holds 100% of its shares. The results of operations were included in the consolidated financial statements of the Company commencing January 27, 2022. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net liabilities, excluding $1,548 of cash acquired $ (2,762 ) Intangible assets, net of deferred tax liabilities 7,445 Goodwill 15,261 Total assets acquired $ 19,944 The goodwill from the acquisition of Appush 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. b. On August 23, 2022, the Company acquired The Goodkind Group, LLC (“TGG”) for a total consideration of $ 11,629, subject to net working capital adjustments. Of which, $ 7,993 was paid upon closing. The remainder constitutes a deferred payment payable in 2023 and 2024. TGG provides permanent and temporary staffing needs in various sectors including: Information Technology, Accounting & Finance, Digital Media, Marketing, Human Resource, Financial Services. TGG specializes in customizing solutions and programs to their clients. With On-Site programs and sourcing models the Company solutions includes functions which differs from standard staffing companies. TGG provides assistance in the areas of compensation design and development, employee opinion surveys, employment policies and practices, performance management, regulatory and compliance issues and succession planning, The results of operations were included in the consolidated financial statements of the Company commencing August 23, 2022. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Net assets, excluding $147 of cash acquired $ 3,177 Customer relationships, net of deferred tax liabilities 3,901 Goodwill 4,404 Total assets acquired $ 11,482 The goodwill from the acquisition of TGG is primarily attributable to potential synergy with Magic, as well as certain intangible assets that do not qualify for separate recognition. c. On July 1, 2022, the Company acquired Intrabases SAS (“Intrabases”), a provider of IT professional services based in Nantes, France. The consideration of the transaction is comprised solely from a cash consideration in an amount of $ 3,428. The results of operations were included in the consolidated financial statements of the Company commencing July 1, 2022. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Net assets, excluding $447 of cash acquired $ 120 Customer relationships, net of deferred tax liabilities 1,054 Goodwill 1,807 Total assets acquired $ 2,981 The goodwill from the acquisition of Intrabases 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. The estimated fair values of the tangible and intangible assets pertaining to the acquisition of Intrabases are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. d. During 2022 the Company entered into two separate Asset Purchase Agreements which meet the definition of a business. Therefore, the Company deemed them as business combinations which were accounted for in accordance with IFRS 3. These aforementioned acquisitions are immaterial, both individually and in aggregate. The total consideration paid for these acquisitions was $ 1,753. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisitions: Net liabilities (308 ) Customer relationships, net of deferred tax liabilities 1,163 Goodwill 898 Total assets acquired $ 1,753 The goodwill from these acquisitions is primarily attributable to potential synergy with Magic, as well as certain intangible assets that do not qualify for separate recognition. Previous year acquisitions a. On April 1, 2021, the Company acquired EnableIT, LLC (“EnableIT”), a U.S.-based services company, specializes in IT staffing and recruiting, for a total consideration of $ 6,000 of which $ 4,000 was paid upon closing and the remaining $ 2,000 were paid in two equal installments in April 1, 2022 and 2023. Acquisition related costs were immaterial. The acquisition was accounted for according to the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing April 1, 2021. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net liabilities, excluding $42 of cash acquired $ (34 ) Customer relationships, net of deferred tax liability 1,833 Goodwill 4,101 Total assets acquired $ 5,900 The goodwill from the acquisition of EnableIT is primarily attributable to potential synergy with Magic, as well as certain intangible assets that do not qualify for separate recognition. b. On April 1, 2021, the Company acquired Menarva Ltd. (“Menarva”), an Israeli-based services company which specializes in software solutions for non-profit organizations for a total consideration of $5,595. Of which, $3,000 was paid upon closing. The remaining amount constitutes a contingent payment depending on the future operating results achieved by Menarva. The acquisition date fair value of the contingent consideration amounted to $2,595. On March 31, 2022, the Company paid $1,055 to settle a portion of the aforementioned contingent consideration. Acquisition related costs were immaterial. The acquisition was accounted for according to the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing April 1, 2021. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net liabilities, excluding $90 of cash acquired $ (70 ) Customer relationships, net of deferred tax liability 2,098 Goodwill 3,477 Total assets acquired $ 5,505 The goodwill from the acquisition of Menarva 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. c. On January 1, 2021, the Company, through one of its Israeli subsidiaries, acquired 60% of the shares of 9540 Y.G. Soft IT Ltd. (“Soft IT”), an Israel-based services company which specializes in outsourcing of software development services for a total consideration of up to $1,134. $ 367 were paid upon closing, $256 were paid on July 4, 2021, and the remaining amount constitutes a contingent payment depending on the future operating results achieved by Soft IT. The fair value of the contingent consideration amounted to $510 at the acquisition date. Acquisition related costs were immaterial. The acquisition was accounted for according to the purchase method. Soft IT’s minority shareholder, as well as the Company, hold a mutual put and call option for the remaining 40% interest. Thus, the noncontrolling interests were classified as redeemable noncontrolling interests. The results of operations were included in the consolidated financial statements of the Company commencing January 1, 2021. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net liabilities, excluding $402 cash acquired $ (402 ) Customer relationships, net of deferred tax liability 886 Redeemable non-controlling interests (719 ) Goodwill 967 Total assets acquired $ 732 The goodwill from the acquisition of Soft IT 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. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | NOTE 4:- CASH AND CASH EQUIVALENTS January 1, December 31, 2021 2021 2022 Cash and deposits for immediate withdrawal $ 83,306 $ 82,302 $ 78,489 Cash equivalents in NIS-denominated deposit 4,821 5,788 4,573 $ 88,127 $ 88,090 $ 83,062 |
Other Accounts Receivavable And
Other Accounts Receivavable And Prepaid Expesnes | 12 Months Ended |
Dec. 31, 2022 | |
Other Accounts Receivavable And Prepaid Expesnes [Abstract] | |
OTHER ACCOUNTS RECEIVAVABLE AND PREPAID EXPESNES | NOTE 5:- OTHER ACCOUNTS RECEIVAVABLE AND PREPAID EXPESNES The following table summarizes the composition of the Company’s other accounts receivable and prepaid expenses: January 1, December 31, 2021 2021 2022 Prepaid expenses $ 3,581 $ 4,578 $ 4,262 Government authorities 3,005 3,601 3,659 Related parties 615 29 3,077 Others 4,550 2,819 2,654 $ 11,751 $ 11,027 $ 13,652 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 6:- FAIR VALUE MEASUREMENT In determining fair value, the Company 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 Company’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 January 1, 2021, December 31, 2021 and 2022: Fair value measurements December 31, 2022 Level 3 Total Liabilities: Liability in respect of business combinations 19,693 19,693 Put options of non-controlling interests 28,292 28,292 $ 47,985 $ 47,985 Fair value measurements December 31, 2021 Level 3 Total Liabilities: Liability in respect of business combinations 17,772 17,772 Put options of non-controlling interests 29,334 29,334 $ 47,106 $ 47,106 Fair value measurements January 1, 2021 Level 3 Total Liabilities: Liability in respect of business combinations 10,561 10,561 Put options of non-controlling interests 23,926 23,926 $ 34,487 $ 34,487 There were no Level 1 or Level 2 instruments during neither of the reported periods. The movement in the liability in respect of the business combinations is as follows: December 31, 2021 2022 Opening balance $ 10,561 $ 17,772 Increase in contingent consideration due to acquisitions 3,098 10,670 Payment of contingent consideration (1,816 ) (8,547 ) Increase in fair value of contingent consideration 3,476 119 Decrease in fair value of contingent consideration (244 ) (1,025 ) Foreign currency translation adjustments (36 ) (598 ) Amortization of interest and exchange rate 2,661 1,302 Closing balance $ 17,772 $ 19,693 The financial assets and liabilities in the consolidated statements of financial position are classified by groups of financial instruments pursuant to IFRS 9 : January 1, December 31, 2021 2021 2022 U.S. Dollars in thousands Financial assets Financial assets at cost: Cash and cash equivalents $ 88,127 $ 88,090 $ 83,062 Short-term bank deposits 289 5,586 3,904 Total financial assets at cost $ 88,416 $ 93,676 $ 86,966 Total financial assets $ 88,416 $ 93,676 $ 86,966 Financial liabilities Financial liabilities at fair value through equity: Put options of non-controlling interests $ 23,926 $ 29,334 $ 28,292 Financial liabilities at fair value through profit or loss: Liability in respect of business combinations $ 15,924 $ 20,527 $ 24,663 Financial liabilities measured at amortized cost: Loans from bank and financial institutions (short-term and long-term debt) $ 24,950 $ 37,263 $ 51,167 Lease liabilities 25,022 25,174 28,873 Total financial liabilities measured at amortized cost: $ 49,972 $ 62,437 $ 80,040 Total financial and lease liabilities $ 89,821 $ 112,298 $ 132,995 |
Property , Plants and Equipment
Property , Plants and Equipment , Net | 12 Months Ended |
Dec. 31, 2022 | |
Property , Plants and Equipment , Net [Abstract] | |
PROPERTY, PLANTS AND EQUIPMENT, NET | NOTE 7:- PROPERTY, PLANTS AND EQUIPMENT, NET Composition and movement: Software Motor Office Computers peripheral Leasehold Total Cost: Balance as of January 1, 2022 $ 1,623 $ 1,444 $ 3,839 $ 8,106 $ 3,725 $ 18,737 Additions during the year: Purchases 110 9 1,365 2,702 195 4,381 Acquisitions of subsidiaries 4 - 55 112 8 179 Adjustments arising from translating financial statements of foreign operations (220 ) (181 ) (555 ) (1,668 ) 1,996 (628 ) Decreases during the year: Disposals (25 ) (2 ) (309 ) (632 ) (44 ) (1,012 ) Balance as of December 31, 2022 $ 1,492 $ 1,270 $ 4,395 $ 8,620 $ 5,880 $ 21,657 Accumulated depreciation: Balance as of January 1, 2022 $ 1,510 $ 1,240 $ 2,480 $ 6,594 $ 1,041 $ 12,865 Additions during the year: Depreciation 47 4 583 1,192 84 1,910 Disposals (23 ) (2 ) (284 ) (580 ) (41 ) (930 ) Adjustments arising from translating financial statements of foreign operations (135 ) (152 ) 104 (520 ) 177 (526 ) Balance as of December 31, 2022 $ 1,399 $ 1,090 2,883 $ 6,686 $ 1,261 $ 13,319 Depreciated cost at December 31, 2022 $ 93 $ 180 $ 1,512 $ 1,934 $ 4,619 $ 8,338 Software Motor Office Computers Leasehold Total Cost: Balance as of January 1, 2021 $ 1,621 $ 1,411 $ 3,627 $ 7,021 $ 3,611 $ 17,291 Additions during the year: Purchases 88 3 453 830 65 1,439 Acquisition of subsidiaries 8 - 40 82 6 136 Adjustments arising from translating financial statements of foreign operations (89 ) 30 (253 ) 231 47 (34 ) Decreases during the year: Disposals (5 ) - (28 ) (58 ) (4 ) (95 ) Balance as of December 31, 2021 $ 1,623 $ 1,444 $ 3,839 $ 8,106 $ 3,725 $ 18,737 Accumulated depreciation: Balance as of January 1, 2021 $ 1,458 $ 866 $ 2,340 $ 5,886 $ 753 $ 11,303 Additions during the year: Depreciation 103 4 530 1,084 75 1,796 Disposals (5 ) - (28 ) (58 ) (4 ) (95 ) Adjustments arising from translating financial statements of foreign operations (46 ) 370 (362 ) (318 ) 217 (139 ) Balance as of December 31, 2021 $ 1,510 $ 1,240 $ 2,480 $ 6,594 $ 1,041 $ 12,865 Depreciated cost at December 31, 2021 $ 113 $ 204 $ 1,359 $ 1,512 $ 2,684 $ 5,872 Depreciated cost at January 1, 2021 $ 163 $ 545 $ 1,287 $ 1,135 $ 2,858 $ 5,988 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS, NET | NotE 8:- Intangible Assets, Net Composition and movement: Capitalized Customer Acquired Others Total Cost: Balance as of January 1, 2022 $ 90,101 $ 86,651 $ 18,371 $ 637 $ 195,760 Capitalized development costs 3,059 - - - 3,059 Purchase of intangible asset - 219 - - 219 Acquisition of subsidiaries - 11,319 2,707 - 14,026 Adjustments arising from translating financial statements of foreign operations (103 ) (5,055 ) (1,030 ) (53 ) (6,241 ) Balance as of December 31, 2022 $ 93,057 $ 93,134 $ 20,048 $ 584 $ 206,823 Accumulated amortization and impairment: Balance as of January 1, 2022 $ 79,354 $ 54,494 $ 10,329 $ 193 $ 144,370 Amortization recognized in the year 3,817 7,865 1,797 95 13,574 Adjustments arising from translating financial statements of foreign operations - (2,930 ) (244 ) (4 ) (3,178 ) Balance as of December 31, 2022 $ 83,171 $ 59,429 $ 11,882 $ 284 $ 154,766 Amortized cost at December 31, 2022 $ 9,886 $ 33,705 $ 8,166 $ 300 $ 52,057 Capitalized Software development costs Customer relationship Acquired technology Others Total Cost: Balance as of January 1, 2021 $ 86,240 $ 78,750 $ 18,052 $ 616 $ 183,658 Capitalized development costs 3,193 - - - 3,193 Acquisition of subsidiaries - 6,445 - - 6,445 Adjustments arising from translating financial statements of foreign operations 668 1,456 319 21 2,464 Balance as of December 31, 2021 $ 90,101 $ 86,651 $ 18,371 $ 637 $ 195,760 Accumulated amortization and impairment: Balance as of January 1, 2021 $ 74,841 $ 46,621 $ 8,720 $ 72 $ 130,254 Amortization recognized in the year 4,513 6,962 1,468 111 13,054 Adjustments arising from translating financial statements of foreign operations - 911 140 11 1,062 Balance as of December 31, 2021 $ 79,354 $ 54,494 $ 10,329 $ 193 $ 144,370 Amortized cost at December 31, 2021 $ 10,747 $ 32,157 $ 8,042 $ 444 $ 51,390 Amortized cost at January 1, 2021 $ 11,399 $ 32,129 $ 9,332 $ 544 $ 53,404 During the years ended December 31, 2021 and 2022 the Company recognized amortization expenses related to intangible assets as follows: Year ended December 31, 2021 2022 Cost of revenues $ 6,068 $ 5,405 Selling and marketing expenses 6,968 8,169 $ 13,054 $ 13,574 Intangible assets composition by reportable segment as of December 31, 2022: IT Software Total Capitalized Software development costs $ 1,079 $ 8,807 $ 9,886 Customer relationship 22,373 11,332 33,705 Acquired technology 1,751 6,415 8,166 Others - 300 300 Total $ 25,203 $ 26,854 $ 52,057 The estimated future amortization expense of intangible assets as of December 31, 2022 is as follows: 2023 $ 13,011 2024 11,075 2025 9,048 2026 7,162 2027 and thereafter 11,761 $ 52,057 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill [Abstract] | |
GOODWILL | Note GOODWILL The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2021 and 2022: IT Software Total As of January 1, 2021 $ 69,346 $ 66,336 $ 135,682 Acquisition of subsidiaries 5,068 3,477 8,545 Measurement period adjustments 321 558 879 Foreign currency translation adjustments 868 829 1,697 As of December 31, 2021 $ 75,603 $ 71,200 $ 146,803 Acquisition of subsidiaries 19,622 2,705 22,327 Measurement period adjustments (902 ) (176 ) (1,078 ) Foreign currency translation adjustments (4,326 ) (5,027 ) (9,353 ) As of December 31, 2022 $ 89,997 $ 68,702 $ 158,699 The Company performed annual impairment tests as of January 1, 2021 as well as December 31, 2021 and 2022 and did not identify any impairment losses (see Note 2). The goodwill is allocated to both the IT Professional Services and Software Services segments, which represent the lowest level within the Company at which goodwill is monitored for internal management purposes. Impairment test of goodwill for the year ended on December 31, 2022: Impairment loss for goodwill is recognized if the recoverable amount of the goodwill is less than the carrying amount. The recoverable amount is the greater of fair value less costs of disposal, or value in use of the relevant reporting level (i.e. a CGU of a group of CGU’s). The Company performed an assessment for goodwill impairment for both of its segments, which is the level at which goodwill is monitored for internal management purposes and concluded that there is no impairment loss for the year ended December 31, 2022, based on the assumptions presented below: December 31, 2022 IT Software Carrying amount $ 185,549 $ 85,325 Weighted average cost of capital 14.2 % 13.4 % Terminal value growth rate 3 % 3 % Actual results may differ from those assumed in the Company’s valuation method. It is reasonably possible that the Company’s assumptions described above could change in future periods. If any of these were to vary materially from the Company’s plans, it may record impairment of goodwill allocated to this reporting unit in the future. Based on the Company’s abovementioned assessment as of December 31, 2022, no goodwill was determined to be impaired, since the fair value of the Company’s group of cash-generating units significantly exceeded their carrying amount. |
Short Term Debts
Short Term Debts | 12 Months Ended |
Dec. 31, 2022 | |
Short Term Debts [Abstract] | |
SHORT TERM DEBTS | Note short term DEBTs Interest rate January 1, December 31, December 31, % Currency 2021 2021 2022 Short-term loans from banks 1.7-2.6 NIS $ 1,328 $ 4,720 $ 2,449 Current maturities of long-term loans from financial institutions and banks 2.1-3.3 NIS 10,202 8,551 9,310 Current maturities of long-term loans from banks 2.1 + SOFR-SOFR+2.25 USD - 3,750 8,908 Accrued interest on long term debt 2.6- 3.14 NIS 68 27 23 Accrued interest on long term debt 6.07 USD - 60 65 $ 11,598 $ 17,108 $ 20,755 |
Other Accounts Payable
Other Accounts Payable | 12 Months Ended |
Dec. 31, 2022 | |
Other Accounts Payable [Abstract] | |
OTHER ACCOUNTS PAYABLE | Note 11:- other accounts payable Other accounts payable are comprised of the following as of the below dates: January 1, December 31, 2021 2021 2022 Employees and payroll accruals $ 28,562 $ 27,826 $ 29,746 Accrued expenses 7,017 8,873 10,239 Government authorities and other 6,198 8,392 6,857 Total $ 41,777 $ 45,091 $ 46,842 |
Long Term Debts
Long Term Debts | 12 Months Ended |
Dec. 31, 2022 | |
Long Term Debts [Abstract] | |
LONG TERM DEBTS | Note Long term DEBTS a. Long term liabilities to banks and others are comprised of the following as of the below dates: Linkage Interest January 1, December 31, basis rate 2021 2021 2022 % Loans from banks and others (1) NIS 2.1 – 5 $ 23,466 $ 17,388 $ 12,161 Bank loans (2) USD 2.1 + SOFR-SOFR+2.25 - 15,000 36,408 Other long term debts JPY 1.9 88 68 61 $ 23,554 $ 32,456 $ 48,630 Less current maturities NIS, USD (10,202 ) (12,301 ) (18,218 ) $ 13,352 $ 20,155 $ 30,412 b. Maturity dates: January 1, December 31, 2021 2021 2022 First year (Current maturities) $ 10,202 $ 12,301 $ 18,218 Second year 6,572 10,891 10,043 Third year 6,484 4,462 9,818 Fourth year 148 4,203 5,000 Fifth year and thereafter 148 599 5,551 Total $ 23,554 $ 32,456 $ 48,630 On March 31, 2022, the Company obtained a loan in the amount of $ 25,000 from an Israeli bank. The principal amount of the loan is payable in five equal annual installments with the final payment due on March 31, 2027 and bears a fixed interest rate of SOFR + 2.25% per annum. The interest is paid on a quarterly basis. c. Financial Covenants: Under the terms of the Loan, the Company has undertaken to maintain the following financial covenants, as they will be expressed in its consolidated financial statements, as described: a. Total equity attributable to Magic Software Enterprises shareholders shall not be lower than $ 100,000 at all times; b. The Company’s consolidated cash and cash equivalent and marketable securities available for sales shall not be less than $ 10,000; c. The ratio of the Company’s consolidated total financial debts to consolidated total assets will not exceed 50%; d. The ratio of the Company’s total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 to 1; and e. The Company shall not create any pledge on all of its property and assets in favor of any third party without the financial institution’s consent. As of December 31, 2022, the Company was in compliance with the financial covenants. On March 27, 2023, the Company entered into a loan agreement with an Israeli bank, pursuant to which, the Company borrowed $20,000 for a four-year term (the “Bank Loan”). The Bank Loan will mature on March 27, 2027, and will be repaid in four (4) equal annual instalments of $6,052 (including interest) starting March 27, 2024. The Bank Loan bears interest at the rate SOFR + 3.38%. The Bank Loan, which may be prepaid under certain circumstances, is subject to various financial covenants which mainly consist of the following: (1) This is comprised of a loan obtained by the Company on November 2016 in the amount of $ 31,356. The loan is linked to the New Israel Shekel, and was obtained from an Israeli financial institution (“the Loan”). The principal amount of the loan is payable in seven equal annual installments with the final payment due on November 2, 2023 and bears a fixed interest rate of 2.60% per annum, payable in two semi-annual payments. (2) On June 1, 2021, the Company obtained a loan in the amount of $ 15,000 from an Israeli bank. The principal amount of the loan is payable in eight equal semi-annual installments with the final payment due on December 1, 2025 and bears a fixed interest rate of SOFR + 2.1% per annum, payable in two semi-annual payments. a. Our equity will not be lower than $1 50 b. The ratio of the total financial debts less cash to total assets will not exceed 30%; c. The ratio of the total financial debts less cash and short-term deposits to the annual EBITDA will not exceed 3.25 to 1; To date, the Company is in full compliance with the financial covenants of the Bank Loan. |
Related Parties Transactions
Related Parties Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Parties Transactions [Abstract] | |
RELATED PARTIES TRANSACTIONS | Note 13:- RELATED PARTies TRANSACTIONS Agreements with controlling shareholder and its affiliates: The Company has in effect agreements with affiliated companies pursuant to which the Company has rendered services amounting to approximately $5,615, and $6,990, in aggregate for the years ended December 31, 2021 and 2022, respectively and acquired services amounting to approximately $ 2,639 and $ 3,088 for the years ended December 31, 2021 and 2022, respectively. The aforementioned services include cloud computing services, software products, computer infrastructure and integration, software development and maintenance services and back-office services. As of December 31, 2021 and 2022, the Company had trade and other receivables balances due to its related parties in amount of approximately $ 3,380 and $ 8,519, respectively. In addition, as of December 31, 2021 and 2022. the Company had trade payables balances due from its related parties in amount of approximately $ 708 and $124, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | Note 14:- LEASES The Company leases substantially all of its office space and vehicles under operating leases. The Company’s leases have original lease periods expiring between 2023 and 2034. Some leases include one or more options to renew. The Company 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. In July 2020, the Company entered into a lease agreement for new corporate offices for the company in Or Yehuda, Israel. The lease expires in June 2033, with an option by the Company to extend for an additional 10-years term. The Company deemed this option as reasonably certain to be renewed. The Company has several leased offices in the United States, with expiry dates varying between 2023 and 2024, with renewal options varying between 2023 and 2029. In November 2021, one of the Company’s subsidiaries in Israel entered into a lease agreement for new corporate offices. The lease commenced on July 2022 with a lease term through 2029, with an option to terminate the lease after a 4-year term following a 12-month notice in advance, and an option to renew the lease to an additional 5-year term, through 2034. The Company deemed this option as reasonably certain to be renewed. 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 for lease liabilities: 2023 $ 5,370 2024 4,344 2025 3,309 2026 2,447 2027 1,964 2028 and thereafter 17,258 Total undiscounted cash flows $ 34,692 Less imputed interest (5,819 ) Present value of lease liabilities $ 28,873 a. Information on leases: Year ended December 31, 2021 2022 Expenses relating to operating lease costs $ 2,889 $ 1,930 Expenses relating to short-term leases $ 57 $ 109 Expenses relating to variable lease payments $ 2,928 $ 2,753 Total cash outflow for leases $ 5,874 $ 4,792 The following is a summary of weighted average remaining lease terms and discount rates for all of the Company’s operating leases: December 31, 2022 Weighted average remaining lease term (years) 12.4 Weighted average discount rate 2.96 % b. Disclosures in respect of right-of-use assets: Buildings Motor Total Cost: Balance as of January 1, 2022 $ 33,241 $ 3,505 $ 36,746 Additions during the year: New leases 4,881 1,468 6,349 Modification of leases 589 89 678 Adjustments for indexation 947 95 1,042 Adjustments arising from translating financial statements of foreign operations (1,228 ) 7 (1,221 ) Acquisition of subsidiaries 2,714 40 2,754 Disposals during the year: Termination of leases (692 ) (333 ) (1,025 ) Balance as of December 31, 2022 $ 40,452 $ 4,871 $ 45,323 Accumulated depreciation: Balance as of January 1, 2022 11,943 1,523 13,466 Additions during the year: Depreciation 3,151 1,169 4,320 Adjustments arising from translating financial statements of foreign operations 665 29 694 Disposals during the year: Termination of leases (509 ) (184 ) (693 ) Balance as of December 31, 2022 15,250 2,537 17,787 Depreciated cost at December 31, 2022 $ 25,202 $ 2,334 $ 27,536 Buildings Motor vehicles Total Cost: Balance as of January 1, 2021 $ 28,563 $ 3,283 $ 31,846 Additions during the year: New leases 4,199 235 4,434 Adjustments for indexation 186 103 289 Adjustments arising from translating financial statements of foreign operations 1,781 159 1,940 Acquisition of subsidiaries 1,129 - 1,129 Disposals during the year: Termination of leases (2,617 ) (275 ) (2,892 ) Balance as of December 31, 2021 $ 33,241 $ 3,505 $ 36,746 Accumulated depreciation: Balance as of January 1, 2021 7,432 1,051 8,483 Additions during the year: Depreciation 4,514 473 4,987 Adjustments arising from translating financial statements of foreign operations 1,510 157 1,667 Disposals during the year: Termination of leases (1,511 ) (160 ) (1,671 ) Balance as of December 31, 2021 11,945 1,521 13,466 Depreciated cost at December 31, 2021 $ 21,296 $ 1,984 $ 23,280 |
Share Based Payments
Share Based Payments | 12 Months Ended |
Dec. 31, 2022 | |
Share Based Payments [Abstract] | |
SHARE BASED PAYMENTS | Note 15:- SHARE BASED PAYMENTS a. Stock Option Plans of the Company: Under the Company’s 2007 Stock Option Plan, as amended (“the 2007 Plan”), options may be granted to employees, officers, directors and consultants of the Company and its subsidiaries. Pursuant to the original 2007 Stock Option Plan, which is valid until August 1, 2027, the Company reserved 2,750,000 Ordinary shares for issuance. As of December 31, 2022, an aggregate of 952,500 Ordinary shares of the Company are available for future grants under the 2007 Plan. Each option granted under the 2007 Plan is exercisable for a period of ten years from the date of the grant of the option. The exercise price for each option is determined by the Board of Directors and set forth in the Company’s award agreement. Unless determined otherwise by the Board of Directors, the option exercise price shall be equal to or higher than the share market price at the grant date. The options generally vest over 3-4 years. Any option that is forfeited or canceled before expiration becomes available for future grants under the 2007 Plan. The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on the accelerated method over the requisite service period of each of the awards. The Company accounts for forfeitures as they occur. The Company uses the Binomial option-pricing model (“the Binomial model”) to estimate the fair value for any options granted. The Binomial model takes into account variables such as volatility, dividend yield rate, and risk-free interest rate and also allows for the use of dynamic assumptions and considers the contractual term of the option, the probability that the option will be exercised prior to the end of its contractual life, and the probability of termination or retirement of the option holder in computing the value of the option. The fair value of each option granted using the Binomial model, was estimated on the date of grant with the following assumptions: expected volatility was based upon actual historical stock price movements and was calculated as of the grant dates for different periods, since the Binomial model can be used for different expected volatilities for different periods. The risk-free interest rate was based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term to the contractual term of the options. The expected term of options granted was derived from the output of the option valuation model and represented the period of time that options granted were expected to be outstanding. Estimated forfeitures were based on actual historical pre-vesting forfeitures. Since dividend payments are applied to reduce the exercise price of the option, the effect of the dividend protection was reflected by using an expected dividend assumption of zero. On March 7, 2021, the Company granted to one of its senior executive officers 80,000 options to purchase its shares with no exercise price. The options will vest over a four-year period, and include several performance criteria related to the Company’s results of operations. No grants were made to employees or directors in 2022. The fair value of the options granted in 2021 using the Binomial model, was estimated on the date of grant with the following assumptions: Year ended Share price $ 16.85 Contractual life 10 years Expected exercise factor 1.5 Dividend yield 0 % Expected volatility (weighted average) 35.1 % Risk-free interest rate 0.5%–1.3 % Fair value of option at the grant date $ 16.85 The risk-free interest rate assumption is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term as of the Company’s employee stock options. Since dividend payment is applied to reduce the exercise price of the option, the effect of the dividend protection is reflected by using an expected dividend assumption of zero. A summary of employee option activity under the 2007 Plan as of December 31, 2022 and changes during the year ended December 31, 2022 are as follows: Number of options Weighted Weighted Aggregate Outstanding at January 1, 2022 66,250 $ 0.45 7.96 $ 1,360 Exercised (20,000 ) - Forfeited (20,000 ) - Outstanding at December 31, 2022 26,250 $ 0.91 5.95 $ 397 Exercisable at December 31, 2022 6,250 $ 3.81 0.6 $ 76 The aggregate intrinsic value 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 December 31, 2022. This amount is changed based on the market value of the Company’s Ordinary shares. Total intrinsic value of options exercised during the years ended December 31, 2021 and 2022 was $628 and $344, respectively. As of December 31, 2022, there was $112 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized in full during 2023. The options outstanding as of December 31, 2022, have been separated into exercise price categories, as follows: Exercise price Options Weighted Options Weighted In $ 0 20,000 7.62 - $ - 3.81 6,250 0.6 6,250 $ 3.81 26,250 5.99 6,250 $ 3.81 b. Stock Option Plan of Comm-IT Solutions: 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 the Company and its subsidiaries. Pursuant to Comm-IT Solutions 2022 Plan, Comm-IT Technology Solutions Ltd. 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, Magic’s Israeli subsidiary, Comm-IT Technology Solutions Ltd. (“Comm-IT Solutions”), awarded 12 of its senior officers 4,028 options to purchase 4,028 shares of Comm-IT Technology Solutions Ltd, at an exercise price ranging between $0.28-$1,878. 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 2022-2024. Subject to the EBITDA targets to be met, as well as the officers continued employment with Comm-IT Solutions throughout 2027, the options will vest at certain points in time throughout the years 2023 to 2027. A summary of employee option activity under the Comm-IT Solutions 2022 Plan as of December 31, 2022 and changes during the year ended December 31, 2022 are as follows: Number Weighted Weighted Aggregate Outstanding at January 1, 2022 - $ - - $ - Granted 4,028 264.67 Outstanding at December 31, 2022 4,028 264.67 7.94 7,499 Exercisable at December 31, 2022 827 $ 0.28 7.92 $ 1,839 As of December 31, 2022, there was $2,885 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized in full over a weighted average period of 1.13 years. The options outstanding as of December 31, 2022, have been separated into exercise price categories, as follows: Exercise price Options Weighted Options Weighted In $ 0.28 3,238 7.92 827 $ 0.28 469 297 7.99 - - 1,878 493 7.99 - - 4,028 7.94 827 $ 0.28 The fair value of the options granted in 2022 using the Binomial model, was estimated on the date of grant with the following assumptions: Year ended Share price $ 2,110 Contractual life 8 years Expected exercise factor 1.5 Dividend yield 0 % Expected volatility (weighted average) 41 % Risk-free interest rate 3.28%–3.65 % Fair value of option at the grant date $ 1,078–$2,126 c. Cost of share-based payment: During the years ended December 31, 2021 and 2022 the Company share-based payment expense related to employee stock options in the amount of $956 and $2,079, respectively, as follows: Year ended December 31, 2021 2022 Selling and marketing expenses $ 956 $ (56 ) General and administrative expenses - 2,135 $ 956 $ 2,079 |
Employee Benefit Liabilities
Employee Benefit Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefit Liabilities [Abstract] | |
EMPLOYEE BENEFIT LIABILITIES | NOTE 16:- EMPLOYEE BENEFIT LIABILITIES Employee benefits consist of post-employment 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 to the Severance Pay Law, as specified below. These liabilities are accounted for as a post-employment benefit. The computation of the 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 into pension funds and/or policies of insurance companies release the Company from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans. Severance expenses for the years 2021 and 2022 were $5,267 and $7,078, respectively. 2) U.S. employees defined contribution plan 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. The U.S. Subsidiary matches up to 3% of employee contributions up to the plan with no limitation. 3) Defined benefit plans The Company 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 Company deposits amounts in central severance pay funds and in qualifying insurance policies. b) Composition of defined benefit plans is as follows: January 1, December 31, 2021 2021 2022 Defined benefit obligation $ 5,545 $ 4,551 $ 2,476 Fair value of plan assets (4,673 ) (3,646 ) (1,575 ) Net defined benefit liability $ 872 $ 905 $ 901 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Commitments And Contingent Liabilities Text Block [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 17:- COMMITMENTS AND CONTINGENCIES a. Guarantees and Collaterals: As of December 31, 2022, the Company has provided performance bank guarantees as security for the performance of various contracts with customers as well as to secure future payments in respect of lease agreements in the amount of $2,053 and $912, respectively. As of December 31, 2022, the Company has restricted bank deposits of $ 31 in favor of the issuing banks. b. From time to time, the Company and/or its subsidiaries 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 Company 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 both the determination of probability and the determination as to whether a loss is reasonably estimable. These accruals are reviewed and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Lawsuits have been brought against the Company in the ordinary course of business. The Company intends to defend itself vigorously against those lawsuits. In September 2016, an Israeli software company, that was previously involved in an arbitration proceeding with us in 2015 and won damages from us of $2.4 million, filed a lawsuit seeking damages of NIS 34,106 against the Company and one its subsidiaries. This lawsuit was filed as part of an arbitration proceeding. In the lawsuit, the software company claimed that warning letters that the Company sent to its clients in Israel and abroad, warning those clients against the possibility that the conversion procedure offered by the software company may amount to an infringement of the Company’s copyrights (the “Warning Letters”), as well as other alleged actions, have caused the software company damages resulting from loss of potential business. The lawsuit is based on rulings given in the 2015 arbitration proceeding in which it was allegedly ruled that the Warning Letters constituted a breach of a non-disclosure agreement (NDA) signed between the parties. The Company rejected the claims by the Israeli software company and moved to dismiss the lawsuit entirely. In July 2021, an arbitrator assigned to the case rendered his decision and determined that the Company should pay the plaintiffs damages in the amount of $1.6 million, which was paid in August 2021 and included in the Company’s results of operations for the year ended December 31, 2021. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
EQUITY | NOTE 18:- EQUITY a. The Ordinary shares of the Company are listed on the NASDAQ Global Select Market in the United States and are traded on the Tel-Aviv Stock Exchange in Israel. b. Accumulated other comprehensive income (loss): December 31, 2021 2022 Accumulated foreign currency translation adjustments 9,238 (6,585 ) Accumulated unrealized gain on derivative instruments, net 26 26 Total other comprehensive income (loss) $ 9,264 $ (6,559 ) c. Dividend distribution policy On August 9, 2017, the Company’s Board of Directors decided to amend the dividend distribution policy announced in 2012. According to the Company’s amended policy, each year the Company will distribute a dividend of up to 75% of its annual distributable profits. The Company’s Board of Directors may at its discretion and at any time, change, whether as a result of a one-time decision or a change in policy, the rate of dividend distributions and/or decide not to distribute a dividend, all at its discretion. On March 8, 2021, the Company declared a dividend distribution of $ 0.21 per share ($ 10,297 in the aggregate) which was paid on April 7, 2021. On August 12, 2021, the Company declared a dividend distribution of $ 0.23 per share ($ 11,480 in the aggregate) which was paid on September 14, 2021. On March 2, 2022, the Company declared a dividend distribution of $ 0.216 per share ($ 10,612 in the aggregate) which was paid on April 7, 2022. On August 11, 2022, the Company declared a dividend distribution of $ 0.29 per share ($ 14,237 in the aggregate) which was paid on September 13, 2022. On March 9, 2023, the Company declared a dividend distribution of $0.3 per share ($14,728 in the aggregate), see also Note 24. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax [Abstract] | |
INCOME TAX | Note 19:- 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 2021 and 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 Company 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. 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 Company’s taxable income in Israel is entitled to a preferred 12% tax rate. Since 2019, under SPTE the tax rate for part of the Company’s taxable income in Israel has been reduced to a 6% corporate tax rate. One of its Israeli subsidiaries have elected to apply the new incentives regime under the Amendment to their industrial activity in Israel, subject to meeting its requirements, starting in 2011. In 2015, the Company transitioned to the preferred enterprise track entitling it to a preferred 16% tax rate under Amendment 73 to the Investment Law. 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 . The tax-exempt income is attributable to certain Group members’ previous status as “Approved Enterprise” and “Benefited Enterprise”. Such tax-exempt income cannot be distributed to shareholders without subjecting the Company to payable income taxes. If dividends are distributed from previous tax-exempt profits, the Company will be liable for income tax at the rate applicable to its profits from the Approved Enterprise in at the tax rate enacted in the year in which the income was earned . According to the Temporary Order, the reduction of CIT will apply to earnings that are released (with no requirement for an actual distribution) within a period of one year from the date of enactment of the Temporary Order. The reduction in the CIT is dependent on the proportion of the trapped earnings that are released in relation to the total trapped earnings, and on the applicable CIT rate in the years the earnings were generated. Consequently, the larger the proportion of the trapped earnings that are released, the lower the tax in respect of the distribution. The minimum tax rate is 6%. Further, a company that elects to pay a reduced CIT is required to invest in its industrial enterprise a designated amount in accordance with the Economic Efficiency Law within a period of five years commencing from the tax year in which the election is made. The designated investment should be utilized for the acquisition of production assets, and/or investments in research and development and/or compensation to additional new employees . In November 2022, the Company 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 (approximately $7,100), and accordingly recognized a tax expense of NIS 2,502 (approximately $711). As of December 31,2022, all the trapped earnings were released. The Company has received final tax assessments through the year 2016. The Company subsidiaries have received final tax assessments (or assessments that are deemed final) through the tax year 2017. Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969: The Company qualifies as an Industrial Company within the meaning of the Law for the Encouragement of Industry (Taxes), 1969 (the “Industrial Encouragement Law”). The Industrial Encouragement Law defines an “Industrial Company” as a company that is resident in Israel and that derives at least 90% of its income in any tax year, other than income from defense loans, capital gains, interest and dividends, from an enterprise whose major activity in a given tax year is industrial production. Under the Industrial Encouragement Law, the Company is entitled to amortization of the cost of purchased know-how and patents over an eight-year period for tax purposes as well as accelerated depreciation rates on equipment and buildings. Eligibility for the benefits under the Industrial Encouragement Law is not subject to receipt of prior approval from any governmental authority. 3) Foreign Exchange Regulations: Under the Foreign Exchange Regulations, the Company and one of its Israeli subsidiaries calculate their tax liability in U.S. dollars according to certain orders. The tax liability, as calculated in U.S. dollars is translated into NIS according to the exchange rate as of December 31 of each year. 4) Income tax on non-Israeli subsidiaries Non-Israeli subsidiaries are taxed according to the tax laws in their respective domiciles of residence. If earnings are distributed to Israel in the form of dividends or otherwise, the Company may be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding tax rates. Neither Israeli income taxes, foreign withholding taxes nor deferred income taxes were provided in relation to undistributed earnings of the non-Israeli subsidiaries. This is because the Company intends to permanently reinvest undistributed earnings in the foreign subsidiaries in which those earnings arose. If these earnings were distributed in the form of dividends or otherwise, the Company would be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and non-Israeli withholding taxes. As of December 31, 2022, the Company had $28,950 of cash and cash equivalents that are currently held outside of Israel that would be subject to income taxes if distributed as dividends. 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. 5) Net operating loss carried forward: As of December 31, 2022, two Israeli subsidiaries of the Company had operating loss carryforwards of $10,150 (mainly F.T.S Formula Telecom Solutions, Ltd. which accounts for $8,959), which can be carried forward to offset against taxable income in the future for an indefinite period. One of the Company’s subsidiaries in England had estimated total available tax loss carryforwards of $3,536 as of December 31, 2022, which can be carried forward to offset against future taxable income . Two of the Company’s subsidiaries in U.S. had estimated total available tax loss carryforwards of $7,741 as of December 31, 2022, which can be carried forward to offset against future taxable income. 6) Deferred tax liabilities, net: 1) Presentation in the consolidated statements of financial position January 1, December 31, 2021 2021 2022 Deferred taxes assets $ 6,235 $ 7,993 $ 3,618 Deferred tax liabilities (17,484 ) (17,945 ) (10,686 ) $ (11,249 ) $ (9,952 ) $ (7,068 ) 2) Composition of deferred taxes January 1, December 31, 2021 2021 2022 Net operating losses carried forward $ 168 $ 312 $ 349 Intangibles, fixed asset, lease liabilities and right of use assets (12,395 ) (12,177 ) (11,929 ) Reserves and allowances 982 1,913 4,512 $ (11,249 ) $ (9,952 ) $ (7,068 ) Note 19:- INCOME tax (C ont 7) Income tax (tax benefit) consist of the following: Year ended 2021 2022 Current: Domestic $ 7,847 $ 11,368 Foreign 6,123 6,304 13,970 17,672 Deferred taxes: Domestic (1,149 ) (1,318 ) Foreign (2,543 ) (5,216 ) (3,692 ) (6,534 ) Taxes on income $ 10,278 $ 11,138 8) 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 Company’s consolidated statements of profit or loss: Year ended 2021 2022 Income before income taxes, as per the statement of operations $ 45,617 $ 57,417 Statutory tax rate in Israel 23 % 23 % Tax computed at the statutory tax rate 10,494 13,205 Tax adjustment in respect of different tax rates 283 (1,756 ) Deferred taxes on losses for which deferred taxes were not created (80 ) (511 ) Tax-deductible costs, not included in the accounting costs (1,041 ) (2,680 ) Non-deductible expenses and tax expenses in respect of prior years, net 1,001 2,670 Uncertain tax positions and other (379 ) 210 Taxes on income $ 10,278 $ 11,138 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | NOTE 20:- REVENUE RECOGNITION 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 $65.7 million as of December 31, 2022. The Company expects to recognize approximately 58% in 2023 from remaining performance obligations as of December 31, 2022, and the remainder thereafter. 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. Contract balances The following table provides information about trade receivables, unbilled receivables, contract assets, and contract liabilities (deferred revenues) from contracts with customers (in thousands): January, 1 December 31, 2021 2021 2022 Trade receivables (net of allowance for credit losses of $3,967, $5,071 and $5,416 at January 1, 2021, December 31, 2021 and 2022, respectively) $ 91,986 $ 116,975 $ 118,126 Unbilled receivables 14,842 19,614 26,114 Contract assets 4,231 5,482 4,240 Long-term unbilled receivables *) - - 2,548 Long-term trade receivables *) 1,410 1,318 735 Deferred revenues (short-term contract liabilities) $ 8,793 $ 10,771 $ 9,808 An analysis of past due but not impaired trade receivables with reference to reporting date: Past due trade receivables with aging of Neither impaired Up to 30 days 31-60 days 61-90 days 91-120 days Over 121 days Total Unpaid Allowance Total trade December 31, 2022 $ 67,793 $ 24,150 $ 16,869 $ 12,863 $ 4,125 $ 13,311 $ 139,111 $ (15,569 ) $ (5,416 ) $ 118,126 December 31, 2021 $ 66,316 $ 27,776 $ 13,658 $ 11,454 $ 5,939 $ 10,391 $ 135,534 $ (13,488 ) $ (5,071 ) $ 116,975 Trade receivables are recorded when the right to consideration becomes unconditional, and an invoice is issued to the customer. Billing terms and conditions generally vary by contract type. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly or quarterly) or upon achievement of contractual milestones. Unbilled receivables relate to revenue recognized in excess of amounts invoiced as the Company has an unconditional right to invoice and receive payment in the future related to its fulfilled obligations. Contract assets relate to unbilled receivables, which represent revenue recognized on arrangements for which billings have not yet been presented to customers because the amounts were earned but not contractually billable as of the balance sheet date, and the right to consideration is generally subject to milestone completion, client acceptance or factors other than the passage of time. Deferred revenues represent contract liabilities, and include unearned amounts received under contracts with customers and not yet recognized as revenues. During the year ended December 31, 2022, the Company recognized $10,771 that was included in deferred revenues (short-term contract liability) balance at January 1, 2022. *) Included in Other long-term receivables in the consolidated statements of financial position . Revenue by timing of revenue recognition was as follows: Year ended 2021 2022 Products and services transferred over time $ 449,391 $ 533,862 Products transferred at a point in time 30,934 32,930 $ 480,325 $ 566,792 |
Selected Statements of Income D
Selected Statements of Income Data | 12 Months Ended |
Dec. 31, 2022 | |
Selected Statements of Income Data [Abstract] | |
SELECTED STATEMENTS OF INCOME DATA | NOTE 21:- SELECTED STATEMENTS OF INCOME DATA a. Research and development costs, net: Year ended 2021 2022 Total costs $ 12,188 $ 13,149 Less - capitalized software costs (3,193 ) (3,059 ) Research and development, net $ 8,995 $ 10,090 b. Selling and marketing expenses: Year ended 2021 2022 Salary and related expenses $ 26,100 $ 33,474 Advertising expenses 2,522 2,676 Cost of share-based payment 956 (56 ) Others 8,569 10,763 Total selling and marketing expenses $ 38,147 $ 46,857 c. General and administrative expenses: Year ended 2021 2022 Salary and related expenses $ 24,072 $ 21,492 Subcontractors 3,842 5,335 Cost of share-based payment - 2,135 Others 3,308 8,590 Total general and administrative expenses $ 31,222 $ 37,552 d. The following table provides detailed breakdown of the Company’s financial income and expenses: Year ended 2021 2022 Financial expenses: Financial expenses related to liabilities in respect of business combinations $ 2,817 $ 744 Interest expenses on loans and borrowings 615 1,743 Interest expenses attributed to leases 719 691 Bank charges, negative foreign exchange differences and other financial expenses 2,468 2,559 6,619 5,737 Financial income: Interest income from deposits, positive foreign exchange differences and other financial income 113 1,392 113 1,392 Financial expenses, net $ 6,506 $ 4,345 e. Earnings per share: The following table presents the computation of basic and diluted net earnings per share for the Company: Year ended 2021 2022 Numerator: Net income attributable to Magic shareholders $ 29,767 $ 40,470 Denominator: Basic earnings per share - weighted average shares outstanding 49,055,082 49,089,044 Effect of dilutive securities 44,972 42,267 Diluted earnings per share – adjusted weighted average shares outstanding 49,100,054 49,131,311 Basic and diluted net earnings per share 0.61 0.82 |
Operating segments
Operating segments | 12 Months Ended |
Dec. 31, 2022 | |
Operating segments [Abstract] | |
OPERATING SEGMENTS | Note 22:- operating segments a. The Company reports its results on the basis of two reportable business segments: software services (which include proprietary and none proprietary software technology) and IT professional services. The Company evaluates segment performance based on revenues and operating income of each segment. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. Headquarters’ general and administrative costs have not been allocated between the different segments. Software services The Company develops markets, sells and supports a proprietary and none proprietary application platform, software applications, business and process integration solutions and related services. IT professional services The Company offers advanced and flexible IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, as well as supplemental outsourcing services. There are no significant transactions between the two segments. b. The following is information about reported segment results of operation: Software IT Unallocated Total 2022 Total revenues $ 99,374 $ 467,418 $ - $ 566,792 Expenses 72,115 427,446 5,469 505,030 Operating income (loss) $ 27,259 $ 39,972 $ (5,469 ) $ 61,762 Depreciation and amortization $ 10,321 $ 9,102 $ 372 $ 19,795 2021 Total revenues $ 95,589 $ 384,736 $ - $ 480,325 Expenses 74,863 347,712 5,627 428,202 Operating income (loss) $ 20,726 $ 37,024 $ (5,627 ) $ 52,123 Depreciation and amortization $ 10,619 $ 8,846 $ 372 $ 19,837 c. The Company’s business is divided into the following geographic areas: United States, Israel, Europe, Japan and other regions. Total revenues are attributed to geographic areas based on the location of the customers. The following table presents total revenues classified according to geographical destination for the years ended December 31, 2021 and 2022: Year ended 2021 2022 United States $ 254,342 $ 308,485 Israel 180,462 205,258 Europe 30,085 39,247 Japan 11,443 10,121 Other 3,993 3,681 $ 480,325 $ 566,792 d. The Company’s long-lived assets are located as follows: January, 1 December 31, 2021 2021 2022 United States $ 74,577 $ 76,369 $ 82,325 Israel 129,248 138,071 148,819 Europe 5,115 4,423 7,885 Japan 6,428 5,543 4,696 Other 3,069 2,939 2,905 $ 218,437 $ 227,345 $ 246,630 e. The Company does not allocate its assets or liabilities to its reportable segments; accordingly, asset or liabilities information by reportable segments is not presented. f. In 2021 and 2022, the Company had one major customer, included in the IT professional services segment, which accounted for 14% and 15% of the Company revenues, respectively. |
Transition to IFRS
Transition to IFRS | 12 Months Ended |
Dec. 31, 2022 | |
Transition to IFRS [Abstract] | |
TRANSITION TO IFRS | NOTE 23:- Transition to IFRS These financial statements for the year ended December 31, 2022 are The Company’s first consolidated financial statements prepared in accordance with IFRS. The date of transition to IFRS is January 1, 2021. For periods up to and including the year ended December 31, 2021, The Company prepared its consolidated financial statements in accordance with U.S. GAAP. Accordingly, The Company has prepared financial statements that comply with IFRS applicable as of December 31, 2022, together with the comparative period data for the year ended December 31, 2021, as described in the summary of significant accounting policies (Note 2). In preparing the financial statements, The Company’s opening consolidated statement of financial position was prepared as of January 1, 2021, The Company’s date of transition to IFRS. This note explains the principal adjustments made by The Company in representing its U.S. GAAP financial statements, including the statement of financial position as of January 1 and December 31, 2021 and the financial statements for the year ended December 31, 2021, in order to comply with IFRS. As a first-time adopter of IFRS, The Company applied IFRS 1 First-time Adoption of International Financial Reporting Standards. The Standard contains a number of voluntary and mandatory exemptions from the requirement to retrospectively apply IFRS, which The Company has applied as of January 1, 2021. The Company has applied the mandatory exceptions and certain optional exemptions as set out below: Business combinations — a) With respect to the business combination of all subsidiaries acquired during the years ended December 31 2020 and 2021, which were consolidated as subsidiaries under the U.S. GAAP in the Company’s consolidated statements of financial position before the date of the transition to IFRS, the Company elected not to apply IFRS 3 Business Combinations retrospectively. As a result, assets recognized, and liabilities assumed in past business combinations under U.S. GAAP have remained unchanged at the date of transition. Reconciliation of statements of financial position as of January 1, 2021 (date of transition to IFRS) and December 31, 2021: As of January 1, 2021 U.S. GAAP Other GAAP IFRS ASSETS CURRENT ASSETS: Cash and cash equivalents $ 88,127 $ - $ 88,127 Short-term deposits 289 - 289 Trade receivables, net 91,986 - 91,986 Unbilled receivables and contract assets 19,073 - 19,073 Other accounts receivable and prepaid expenses 11,751 - 11,751 Total current assets 211,226 - 211,226 LONG-TERM ASSETS: Severance pay fund 4,673 (4,673 ) - Deferred taxes 6,397 (162 ) 6,235 Right-of-use assets 24,509 (1,146 ) 23,363 Other accounts receivable 5,507 - 5,507 Property, plants and equipment, net 5,988 - 5,988 Intangible assets, net 53,404 - 53,404 Goodwill 135,682 - 135,682 Total long-term assets 236,160 (5,981 ) 230,179 Total assets $ 447,386 $ (5,981 ) $ 441,405 LIABILITIES AND EQUITY CURRENT LIABILITIES: Short term debt $ 11,529 $ 69 $ 11,598 Trade payables 14,250 - 14,250 Accrued expenses and other accounts payable 41,846 (69 ) 41,777 Current maturities of operating lease liabilities 3,413 379 3,792 Liabilities in respect of business combinations 4,998 - 4,998 Redeemable non-controlling interests - 14,611 14,611 Deferred revenue and customer advances 8,793 - 8,793 Total current liabilities 84,829 14,990 99,819 LONG-TERM LIABILITIES: Long-term debt 13,352 - 13,352 Long-term operating lease liabilities 21,109 121 21,230 Liability in respect of business combinations 10,926 - 10,926 Deferred taxes 17,639 (155 ) 17,484 Redeemable non-controlling interests - 9,315 9,315 Accrued severance pay, net 5,545 (4,673 ) 872 Total long-term liabilities 68,571 (4,608 ) 73,179 REDEEMABLE NON-CONTROLLING INTEREST 24,980 (24,980 ) - EQUITY Share capital 1,164 - 1,164 Additional paid-in capital 211,713 (23,298 ) 188,415 Accumulated other comprehensive loss 7,835 (398 ) 7,437 Accumulated earnings 39,720 22,953 62,673 Total equity attributable to company shareholders’ 260,432 (743 ) 259,689 Non-controlling interests 8,574 143 8,718 Total equity 269,006 (600 ) 268,407 Total liabilities, redeemable non-controlling interest and equity $ 447,386 $ (5,981 ) $ 441,405 As of December 31, 2021 U.S. GAAP Other GAAP IFRS ASSETS CURRENT ASSETS: Cash and cash equivalents $ 88,090 $ - $ 88,090 Short-term deposits 5,586 - 5,586 Trade receivables, net 116,975 - 116,975 Unbilled receivables and contract assets 25,096 - 25,096 Other accounts receivable and prepaid expenses 11,032 (5 ) 11,027 Total current assets 246,779 (5 ) 246,774 LONG-TERM ASSETS: Severance pay fund 3,646 (3,646 ) - Deferred taxes 8,091 (98 ) 7,993 Right-of-use assets 24,299 (1,019 ) 23,280 Other accounts receivable 5,165 - 5,165 Property, plants and equipment, net 5,872 - 5,872 Intangible assets, net 51,390 - 51,390 Goodwill 146,803 - 146,803 Total long-term assets 245,266 (4,763 ) 240,503 Total assets $ 492,045 $ (4,768 ) $ 487,277 LIABILITIES AND EQUITY CURRENT LIABILITIES: Short term debt $ 17,032 $ 76 $ 17,108 Trade payables 24,711 - 24,711 Accrued expenses and other accounts payable 45,173 (82 ) 45,091 Current maturities of operating lease liabilities 3,943 (676 ) 3,267 Liabilities in respect of business combinations 6,635 - 6,635 Redeemable non-controlling interests - 23,197 23,197 Deferred revenue and customer advances 10,771 - 10,771 Total current liabilities 108,265 22,515 130,780 LONG-TERM LIABILITIES: Long-term debt 20,155 - 20,155 Long-term operating lease liabilities 20,970 937 21,907 Liability in respect of business combinations 13,892 - 13,892 Deferred taxes 18,112 (167 ) 17,945 Redeemable non-controlling interests - 6,137 6,137 Accrued severance pay, net 4,551 (3,646 ) 905 Total long-term liabilities 77,680 3,261 80,941 REDEEMABLE NON-CONTROLLING INTEREST 30,432 (30,432 ) - EQUITY Share capital 1,165 - 1,165 Additional paid-in capital 211,543 (27,496 ) 184,047 Accumulated other comprehensive loss 9,294 (30 ) 9,264 Accumulated earnings 43,246 27,414 70,660 Total equity attributable to company shareholders’ 265,248 (112 ) 265,136 Non-controlling interests 10,420 - 10,420 Total equity 275,668 (112 ) 275,556 Total liabilities, redeemable non-controlling interest and equity $ 492,045 $ (4,768 ) $ 487,277 Reconciliation of the consolidated statement of profit or loss for the year ended December 31, 2021: Year ended December 31, 2021 U.S. GAAP GAAP IFRS Revenues Software services $ 30,934 $ - $ 30,934 Maintenance and technical support 36,149 - 36,149 Consulting services 413,242 - 413,242 Total revenues 480,325 - 480,325 Cost of revenues: Software services 12,182 - 12,182 Maintenance and technical support 4,144 - 4,144 Consulting services 331,005 - 331,005 Total cost of revenues 347,331 - 347,331 Gross profit 132,994 - 132,994 Research and development expenses, net 8,995 - 8,995 Selling, marketing expenses 38,147 - 38,147 General and administrative expenses 32,110 (888 ) 31,222 Change in valuation of contingent consideration related to acquisitions 2,507 - 2,507 Operating income 51,235 888 52,123 Financial expenses (3,268 ) (534 ) (3,802 ) Financial income 113 - 113 Increase in valuation of consideration related to acquisitions (2,817 ) - (2,817 ) Income before taxes on income 45,263 354 45,617 Taxes on income 10,359 (81 ) 10,278 Net income 34,904 435 35,339 Attributable to: Redeemable non-controlling interests 3,517 (3,517 ) - Non-controlling interests 2,055 3,517 5,572 Equity holders of the Company $ 29,332 $ 435 $ 29,767 Net earnings per share attributable to company Shareholders Basic and diluted earnings per share $ 0.52 $ 0.09 $ 0.61 Notes to the adjustments and reclassifications made in order to comply with IFRS: 1. Deferred taxes Under the U.S. GAAP, the Company has recognized deferred tax assets and liabilities in respect of right of use assets and lease liabilities. Adjustment to deferred taxes were recognized to conform with the transition to IFRS, as the book basis of such right of use assets and lease liabilities differs between U.S. GAAP and IFRS. 2. Post-employment benefits In accordance with U.S. GAAP, The Company’s liability for severance pay with respect to its Israeli employees (for the period for which the employees were not included under section 14 of the Severance Pay Law) was calculated pursuant to the Severance Pay Law, based on the most recent salary of the employees, multiplied by the number of years of employment as of the reporting date. The Company’s plan assets, which cover part of this obligation, were presented as an asset on the Company’s consolidated statements of financial position, based on its cash-surrendered value. In accordance with IFRS, the liability for severance pay is measured using the projected unit credit method and actuarial assumptions (which include rates of employee turnover and future salary increases based on the estimated timing of payment), and is presented based on discounted expected future cash flows. The liability for severance pay shown in the statement of financial position, is net of 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. The Company has elected to recognize all cumulative actuarial gains and losses as at the date of transition in retained earnings. The Company is not required to re-compute the unrecognized portion of actuarial gains and losses from the inception of the defined benefit plans. Instead, The Company applies IAS 19 Employee Benefits from the date of transition. Therefore, at the date of transition, The Company recognizes the pension obligations in accordance with IAS 19 Employee Benefits and no unrecognized actuarial gains and losses are presented at the transition date. The Company’s net liability for severance pay as of January 1, 2021 and December 31, 2021, decreased by $4,673 and $3,646, retrospectively, as a result from the different measurement. 3. Redeemable non-controlling interests Under U.S. GAAP, redeemable non-controlling interests were classified as mezzanine equity on the consolidated statements and measured at each reporting period at the higher of their redemption amount or the non-controlling interest book value. The profit attributed to the redeemable non-controlling interests was recorded in profit or loss and included in “Net income attributable to redeemable non-controlling interests”. Changes to the redemption amount of the redeemable non-controlling interests were recorded in retained earnings. Such change to the redemption amount of the redeemable non-controlling interests was excluded from the net income attributable to Magic shareholders for the purpose of calculating the earnings per share numerator. In accordance with IFRS, put option granted to non-controlling interests are classified as financial liability on the consolidated statements of financial position ($ 14,611 and $ 9,315 short-term and long-term, respectively, as of January 1, 2021 and $ 23,197 and $ 6,137 short-term and long-term, respectively, as of December 31, 2021), and measure based on the present value of the consideration to be transferred upon the exercise of the put option. When the Company 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 Company any benefits incidental to ownership of the equity instrument (i.e. the Company 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 Company, under “Additional paid-in capital”, and in contrary to U.S. GAAP, such difference has no effect on the calculation of the earnings per share numerator. The Company 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. 4. Right of use assets and lease liabilities Under U.S. GAAP, ROU assets and liabilities are recognized on the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) based on the information available on the commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Moreover, the ROU asset may also include initial direct costs, which are incremental costs of a lease that would not have been incurred if the lease had not been obtained. The Company uses the long-lived assets impairment guidance in ASC Subtopic 360-10, “Property, Plant, and Equipment - Overall,” to determine whether a right-of-use asset is impaired, and if so, the amount of the impairment loss to recognize. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option. In accordance with IFRS, for leases in which the Company is the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company 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 Company has elected to apply the practical expedient in IFRS 16 and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract. 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 Company’s incremental borrowing rate. After the commencement date, the Company 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 less any lease incentives received. The right-of-use asset is measured by applying the cost model and depreciated over the shorter of its useful life or the lease term. The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36. 5. Reconciliation between the total equity attributable to Magic’s shareholders as reported under the U.S. GAAP as of January 1, 2021 and December 31, 2021 compared to the amounts reported in accordance with IFRS. Share Additional Retained Accumulated Total Equity As of January 1, 2021 As reported in the Company’s consolidated financial statements as of January 1, 2021 in accordance with U.S. GAAP: $ 1,164 $ 211,713 $ 39,720 $ 7,835 $ 260,432 Transition to IFRS: Measurement adjustments related to leases - - (1,654 ) - (1,654 ) Measurement adjustments related to redeemable non-controlling interests - (23,298 ) 24,607 (398 ) 911 - (23,298 ) 22,953 (398 ) (743 ) As of January 1, 2021 in accordance with IFRS: $ 1,164 $ 188,415 $ 62,673 $ 7,437 $ 259,689 As of December 31, 2021 As reported in the Company’s consolidated financial statements as of December 31, 2021 in accordance with U.S. GAAP: $ 1,165 $ 211,543 $ 43,246 $ 9,294 $ 265,248 Transition to IFRS: Measurement adjustments related to leases - - (1,210 ) - (1,210 ) Measurement adjustments related to redeemable non-controlling interests - (27,496 ) 28,624 (30 ) 1,098 - (27,496 ) 27,414 (30 ) (112 ) As of December 31, 2021 in accordance with IFRS: $ 1,165 $ 184,047 $ 70,660 $ 9,264 $ 265,136 6. Certain reclassifications have been made to the consolidated statements of financial position. Such reclassifications affect the presentation of certain items in the consolidated statement of financial position, and have no impact on net income or equity of The Company: Under the U.S. GAAP, redeemable non-controlling interests were presented as a separate mezzanine equity item on the consolidated statements. In accordance with IFRS, redeemable non-controlling interests are classified as financial liability on the consolidated statements of financial position ($14,611 and $9,315 short-term and long-term, respectively, as of January 1, 2021 and $15,454 and $13,880 short-term and long-term, respectively, as of December 31, 2021) Finance expenses and income - In accordance with U.S. GAAP, financial income and expense were presented net in the Company’s consolidated statements of profit or loss (although presented separately in a note). Under the IFRS, the Company has separately classified financial income and expense in its consolidated financial statements. Accrued interest on loans – Under U.S. GAAP, the Company elected to present the accrued interest on loans as part of accrued expenses and other accounts payable in its consolidated statements of financial position. Under IFRS, the Company elected to reclassify the balance to short term debt in its consolidated statements of financial position, mainly in order to comply with parent company reporting requirements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 24:- SUBSEQUENT EVENTS a) On March 9, 2023, the Company declared a cash dividend of $14,728, or $0.3 per share to its shareholders of record on April 10, 2023. The dividend was paid on April 20, 2023. b) On March 27, 2023, the Company entered into a loan agreement with an Israeli bank, pursuant to which , the Company borrowed $20,000 for a four-year term (the “Bank Loan”). The Bank Loan will mature on March 27, 2027, and will be repaid in four (4) equal annual instalments of $6,052 (including interest) starting March 27, 2024. The Bank Loan bears interest at the rate SOFR + 3.38%. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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 financial statements for the year ended December 31, 2021 were the Company’s first consolidated financial statements prepared in accordance with IFRS. The date of transition to IFRS was January 1, 2021. For all periods up to and including the year ended December 31, 2021, the Company prepared its financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Accordingly, the Company’s first consolidated financial statements that comply with IFRS are applicable as of December 31, 2022, together with the comparative period data for the year ended December 31, 2021 (See also Note 22 to our consolidated financial statements). Measurement basis: The Company’s consolidated financial statements are prepared on a cost basis, except for financial assets measured at fair value through other comprehensive income (“OCI”), employee benefit assets and liabilities, and financial assets and liabilities which are presented at fair value through profit or loss. (See Note 6). 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 liabilities in respect of business combinations, goodwill and intangible assets and their subsequent impairment analysis, determination of fair value of put options of non-controlling interests, legal contingencies, research and development capitalization as well as amortization periods, classification of leases as well as the determination of the lease term and the incremental borrowing rate, 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, identification of performance obligations and the determination of the transaction price as well as the standalone selling prices, and evaluating expected credit losses (“ECL”). 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 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 subsidiaries are prepared for the same reporting period and using consistent accounting treatment of similar transactions and economic activities. Significant intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements. |
Non-controlling interest | 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. |
Business combination 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 chooses 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. In a business combination achieved in stages, equity interests in the acquiree that had been held by the acquirer prior to obtaining control are measured at the acquisition date fair value while recognizing a gain or loss resulting from the revaluation of the prior investment on the date of achieving control. A put option granted by the Group to non-controlling interests is accounted for using the expected purchase approach under the presumption that the put option will be exercised, and therefore the parent effectively holds an interest in the subsidiary’s shares as if the put option had been exercised. A put option granted by the Group to non-controlling interests for which the consideration to be paid in cash or other financial asset is recognized as a liability in the amount of the present value of the option’s exercise price. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset or liability in accordance with IFRS 9. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. 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. |
Functional currency, presentation currency and foreign currency | 6) Functional currency, presentation currency and foreign currency: i. Functional currency and presentation currency: The presentation currency of these financial statements is the U.S dollars (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. Also, the dollar is the currency of the primary economic environment in which the Company and certain subsidiaries operate. Thus, the functional and reporting currency of the Company and certain subsidiaries is the dollar. Assets, including fair value adjustments upon acquisition, and liabilities of an investee which is a foreign operation, 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). 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. |
cash equivalents | 7) Cash equivalents: Cash equivalents are considered short-term highly liquid investments, that are readily convertible to cash with original maturities of three months or less, at acquisition. Cash and cash equivalents include amounts held primarily in NIS, dollar, Euro, Japanese Yen and British Pound. |
Short-term bank deposits | 8) Short-term bank deposits: Short-term bank 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 at a cost (including accrued interest) which approximates their fair value. 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 January 1, 2021, December 31, 2021 and 2022, the Company’s bank deposits are mainly denominated in U.S. dollars and bear yearly interest rates of mainly 0.27%, 0.27% and 3.54%, respectively. |
Revenue recognition | 9) Revenue recognition: Revenues are recognized when control of the promised goods or services are transferred to the customers, in an amount that reflects the consideration that the company expects to receive in exchange for those goods or services. The Company determines revenue recognition through the following steps: ● identification of the contract with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, the Company satisfies a performance obligation. The Company enters into contracts that can include various combinations of products, software and professional services, as detailed below, which are generally distinct from each other and accounted for as separate performance obligations. The Company derives its revenues from licensing the rights to use its software (proprietary and non-proprietary), provision of related professional services, maintenance and technical support as well as from other software and IT professional services (either fixed price or based on time and materials). The Company sells its products primarily through direct sales force and indirectly through distributors and value added resellers. Under IFRS 15, an entity recognizes revenue when or as it satisfies a performance obligation by transferring software license or software related services to the customer, either at a point in time or over time. When the Company enters into a contract for the sale of software license which does not require significant implementation services, and the customer receives the rights to use the perpetual or term-based software license, the Company recognizes revenue from the sale of the software license at the time of delivery, when the customer receives control of the software license. The software license is considered a distinct performance obligation recognized at a point-in-time, as the customer can benefit from the software on its own or together with other readily available resources. Revenue from long term contracts which involve significant implementation, customization, or integration of the Company’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 Company. The Company recognizes revenue of such contracts over time using cost inputs, which recognize revenue and gross profit as work is performed based on a ratio between actual costs incurred compared to the total estimated costs for the contract, to measure progress toward completion of its performance obligations. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. In addition, the Company provides professional services that do not involve significant customization to customer-specific specifications (typically staffing or consulting services). The revenue is recognized as the services are performed, either on a straight-line basis or based on the hours of services that were provided to the customer, in accordance with the terms of the contracts. The Company’s revenues from post contract support are derived from annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee, as well as technical support for software licenses previously sold. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. The Company considers the post contract support performance obligation as a distinct performance obligation that is satisfied over time, and recognized on a straight-line basis over the contractual period. Revenue from professional services, both related to software and IT professional services businesses consists of either fixed price or time and materials, and are considered performance obligations that are satisfied over time, and revenues are recognized as the services are provided. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Stand-alone selling prices of software licenses are typically estimated using the residual approach. Stand-alone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. When another party is involved in providing goods or services to the customer, the Company examines whether the nature of its promise is a performance obligation to provide the defined goods or services itself, which means the Company is a principal and therefore recognizes revenue in the gross amount of the consideration, or to arrange that another party provide the goods or services which means the Company is an agent and therefore recognizes revenue in the amount of the net commission. The Company is a principal when it controls the promised goods or services before their transfer to the customer. Indicators that the Company controls the goods or services before their transfer to the customer include, inter alia, as follows: the Company is responsible for fulfilling the promises in the contract; the Company has inventory risk before the goods or services are transferred to the customer; and the Company has discretion in setting the prices of the goods or services. Revenue from third-party sales is recorded at a gross or net amount according to certain indicators. The application of these indicators for gross and net reporting of revenue depends on the relative facts and circumstances of each sale. The Company pays commissions to sales and marketing and certain management personnel based on their attainment of certain predetermined sales or profit goals. The Company expenses sales commissions as they are incurred when the amortization period would have been less than one year. In addition, generally, sales commissions which are paid upon contract renewal are commensurate with the initial commissions as the renewal amounts are substantially identical to the initial commission costs. During the years ended December 31, 2022 and 2021, no costs have been capitalized. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. |
Income tax | 10) 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 Company’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. ● Uncertain tax position: A provision for uncertain tax positions, including additional tax and interest expenses, is recognized when it is more likely than not that the Company will have to use its economic resources to pay the obligation. |
Leases | 11) Leases: The Company 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 Company as lessee For leases in which the Company is the lessee, the Company 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 Company 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 Company 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 Company’s incremental borrowing rate. After the commencement date, the Company 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 1–11 3 Motor vehicles 1–5 3 The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36. ii) Variable lease payments that depend on an index: On the commencement date, the Company uses the index rate prevailing on the commencement date to calculate the future lease payments. For leases in which the Company is the lessee, the aggregate changes in future lease payments resulting from a change in the index are discounted (without a change in the discount rate applicable to the lease liability) and recorded as an adjustment of the lease liability and the right-of-use asset, only when there is a change in the cash flows resulting from the change in the index (that is, when the adjustment to the lease payments takes effect). iii) 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 Company 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. iv) Lease modifications If a lease modification does not reduce the scope of the lease and does not result in a separate lease, the Company 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 Company 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 Company 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 | 12) Property, plant and equipment, net: Property, plant and equipment are measured at cost, including directly attributable costs, less accumulated depreciation. 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 estimated useful life of the assets at annual rates as follows: Years Software 3–5 (mainly 5) Computers and peripheral equipment 3–5 Office furniture and equipment 7–15 (mainly 7) Motor vehicles 7 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. |
Intangible assets | 13) Intangible assets: 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. Research and development expenditures Research expenditures incurred in the process of software development are recognized in profit or loss when incurred. An intangible asset arising from a software development project or from the development phase of an internal project is recognized if the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Company’s intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the ability to measure reliably the respective expenditure asset during its development. The Company establishes technological feasibility upon completion of a detailed program design or a working model. Capitalized software costs are measured at cost less any accumulated amortization and any accumulated impairment losses on a product-by-product basis. Amortization of capitalized software costs begin when development is complete, and the product is available for use or for sale. The Company considers a product to be available for use when the Company completes its internal validation of the product that is necessary to establish that the product meets its design specifications including functions, features, and technical performance requirements. Internal validation includes the completion of coding, documentation and testing that ensure bugs are reduced to a minimum. The internal validation of the product takes place a few weeks before the product is made available to the market. In certain instances, the Company enters into a short pre-release stage, during which the product is made available to a selected number of customers as a beta program for their own review and familiarization. Subsequently, the release is made generally available to customers. Once a product is considered available for use, the capitalization of costs ceases and amortization of such costs to “cost of sales” begins. Capitalized software costs are amortized on a product-by-product basis by the straight-line method over the estimated useful life of the software product (between 5-7 years). Research and development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. The Company assesses the recoverability of its capitalized software costs on a regular basis by assessing the net realizable value of these intangible assets based on the estimated future gross revenues from each product reduced by the estimated future costs of completing and disposing of it, including the estimated costs of performing maintenance and customer support over its remaining economical useful life using internally generated projections of future revenues generated by the products, cost of completion of products and cost of delivery to customers over its remaining economical useful life. 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 relationships Up to 15 Acquired technology Up to 10 (mainly 5) 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. |
Advertising expense | development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. |
Impairment of non-financial assets | 14) Impairment of non-financial assets: The Company evaluates the need to record an impairment of non-financial assets (property, plant and equipment, capitalized software costs and other intangible assets, goodwill) 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. 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 Company 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. During the years ended December 31, 2021 and 2022, no impairment loss was identified. |
Consolidated financial statement | 15) Financial instruments: The accounting policy for financial instruments in accordance with IFRS 9, “Financial Instruments” (“the Standard”) is as follows: 1. 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.\ The Company classifies and measures debt instruments in the financial statements based on the following criteria: - The Company’s business model for managing financial assets, and; - The contractual cash flow terms of the financial asset. Impairment of financial assets: The Company evaluates at the end of each reporting period the loss allowance for financial debt instruments which are not measured at fair value through profit or loss. The Company has short-term financial assets such as trade receivables in respect of which the Company applies a simplified approach and measures the loss allowance in an amount equal to the lifetime expected credit losses. An impairment loss on debt instruments measured at amortized cost is recognized in profit or loss with a corresponding loss allowance that is offset from the carrying amount of the financial asset. The Company has short-term financial assets such as trade receivables in respect of which the Company applies a simplified approach in IFRS 9 and measures the loss allowance in an amount equal to the lifetime expected credit losses. Trade receivables include original invoiced amounts less an allowance for any potential uncollectible amounts and less invoiced amounts from maintenance and professional services contracts which haven’t been recognized yet . The Company makes estimates of expected credit losses for the allowance for doubtful accounts based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company’s consolidated statements of profit or loss. Such allowance charge amounted of $ 892 and $ 1,778, respectively for the years ended December 31, 2021 and 2022. 2. Financial liabilities a) 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 Company measures all financial liabilities at amortized cost using the effective interest rate method, except for financial liabilities at fair value through profit or loss. b) Financial liabilities measured at fair value through profit or loss: At initial recognition, the Company 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, except for put option granted to non-controlling interests. Put option granted to non-controlling interests: When the Company 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 Company any benefits incidental to ownership of the equity instrument (i.e. the Company 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 Company, under “Additional paid-in capital”. The Company 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. |
Fair value measurement | 16) 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 Company 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. 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). 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: |
Provision | 17) Provisions: A provision in accordance with IAS 37 is recognized when the Company has a present (legal or constructive) obligation as a result of a past event, it is expected to require the use of economic resources to clear the obligation and a reliable estimate has been made. Following are the types of provisions included in the financial statements: i. Legal claims: A provision for claims is recognized when the Company 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 Company 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 benefits | 18) Employee benefits: The Company 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 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 Company 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. 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. Magic and its Israeli subsidiaries (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. Magic and its Israeli subsidiaries 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. In respect of its severance pay obligation to certain of its employees, the Company 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 Company’s own creditors and cannot be returned directly to the Company. 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. The Company’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 Company’s obligation. Remeasurement of the net obligation is recognized to the statement of comprehensive income in the incurred period. |
Share-based payment | 19) Share-based payment: The Company’s senior management officers, 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 Company’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 . The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on the accelerated method over the requisite service period of each of the awards. The Company accounts for forfeitures as they occur. |
Earnings per share | 20) Earnings per share: Earnings per share are calculated by dividing the net income attributable to equity holders of the Company by the weighted number of ordinary shares outstanding during the period. Potential ordinary shares are included in the computation of diluted earnings per share when their conversion decreases earnings per share from continuing operations. Potential ordinary shares that are converted during the period are included in diluted earnings per share only until the conversion date and from that date in basic earnings per share. The Company’s share of earnings of subsidiaries is included based on its share of earnings per share of the subsidiaries multiplied by the number of shares held by the Company. |
Concentration of credit risk | 21) Concentration of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits, trade receivables and foreign currency derivative contracts. The majority of the Company’s cash and cash equivalents, bank 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 Company’s trade receivables are generally derived from sales to large organizations located mainly in Israel, North America, Europe and Asia Pacific. The Company 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, Magic and its subsidiaries may require letters of credit or other collateral or additional guarantees. The Company 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 Company’s working capital as well as from financial expenses and principal payments of the Company’s debt instruments. Liquidity risk consists of the risk that the Company will have difficulty in fulfilling obligations relating to financial liabilities. The Company’s policy is to ascertain constant cash adequacy needed for settling its liabilities when due. For this purpose, the Company aims to hold cash balances (or adequate credit lines) that will meet anticipated demands. Magic and its subsidiaries 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 Company can expect sufficient liquid sources for covering its entire liabilities under reasonable assumptions. |
Reclassification of prior years presentation | 23) Reclassification of prior years presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Disclosure of new standards in the period prior to their adoption | 24) Disclosure of new standards in the period prior to their adoption a. 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 covenants with which an entity must comply on or before the reporting date will affect a liability’s classification as current or non-current. ● An entity should provide disclosure when a liability arising from a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months from the reporting date. This disclosure is required to include information about the covenants and the related liabilities. The disclosures must include information about the nature of the future covenants and when compliance is applicable, as well as the carrying amount of the related liabilities. The purpose of this information is to allow users to understand the nature of the future covenants and to assess the risk that a liability classified as non-current could become repayable within twelve months. Furthermore, if facts and circumstances indicate that an entity may have difficulty in complying with such covenants, those facts and circumstances should be disclosed. 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 application is permitted. The Company estimates that the Amendments are not expected to have a material impact on its financial statements. b. Amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors”: In February 2021, the IASB issued an amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors” (“the Amendment”), in which it introduces a new definition of “accounting estimates”. Accounting estimates are defined as “monetary amounts in financial statements that are subject to measurement uncertainty”. The Amendment clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. The Amendment is to be applied prospectively for annual reporting periods beginning on or after January 1, 2023 and is applicable to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Early application is permitted. The Company estimates that the initial application of the Amendment is not expected to have a material impact on its financial statements. c. Amendment to IAS 12, “Income Taxes”: In May 2021, the IASB issued an amendment to IAS 12, “Income Taxes” (“IAS 12”), which narrows the scope of the initial recognition exception under IAS 12.15 and IAS 12.24 (“the Amendment”). According to the recognition guidelines of deferred tax assets and liabilities, IAS 12 excludes recognition of deferred tax assets and liabilities in respect of certain temporary differences arising from the initial recognition of certain transactions. This exception is referred to as the “initial recognition exception”. The Amendment narrows the scope of the initial recognition exception and clarifies that it does not apply to the recognition of deferred tax assets and liabilities arising from transactions that are not a business combination and that give rise to equal taxable and deductible temporary differences, even if they meet the other criteria of the initial recognition exception. The Amendment applies for annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. In relation to leases and decommissioning obligations, the Amendment is to be applied commencing from the earliest reporting period presented in the financial statements in which the Amendment is initially applied. The cumulative effect of the initial application of the Amendment should be recognized as an adjustment to the opening balance of retained earnings (or another component of equity, as appropriate) at that date. The Company estimates that the initial application of the Amendment is not expected to have a material impact on its financial statements. d. Amendment to IAS 1 - Disclosure of Accounting Policies: In February 2021, the IASB issued an amendment to IAS 1, “Presentation of Financial Statements” (“the Amendment”), which replaces the requirement to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies. One of the main reasons for the Amendment is the absence of a definition of the term ‘significant’ in IFRS whereas the term ‘material’ is defined in several standards and particularly in IAS 1. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Significant Accounting Policies [Abstract] | |
Schedule of quantitative information about right of use assets | Years Mainly Land and buildings 1–11 3 Motor vehicles 1–5 3 |
Schedule of annual rates of depreciation | Years Software 3–5 (mainly 5) Computers and peripheral equipment 3–5 Office furniture and equipment 7–15 (mainly 7) Motor vehicles 7 |
Schedule of intangible assets with indefinite useful life | Years Customer relationships Up to 15 Acquired technology Up to 10 (mainly 5) |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share purchase agreement [Member] | |
Business Combinations (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities | Net liabilities, excluding $1,548 of cash acquired $ (2,762 ) Intangible assets, net of deferred tax liabilities 7,445 Goodwill 15,261 Total assets acquired $ 19,944 |
Goodkind Group, LLC [Member] | |
Business Combinations (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities | Net assets, excluding $147 of cash acquired $ 3,177 Customer relationships, net of deferred tax liabilities 3,901 Goodwill 4,404 Total assets acquired $ 11,482 |
IT professional services [Member] | |
Business Combinations (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities | Net assets, excluding $447 of cash acquired $ 120 Customer relationships, net of deferred tax liabilities 1,054 Goodwill 1,807 Total assets acquired $ 2,981 |
Asset Purchase Agreements [Member] | |
Business Combinations (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities | Net liabilities (308 ) Customer relationships, net of deferred tax liabilities 1,163 Goodwill 898 Total assets acquired $ 1,753 |
EnableIT, LLC [Member] | |
Business Combinations (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities | Net liabilities, excluding $42 of cash acquired $ (34 ) Customer relationships, net of deferred tax liability 1,833 Goodwill 4,101 Total assets acquired $ 5,900 |
Menarva Ltd [Member] | |
Business Combinations (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities | Net liabilities, excluding $90 of cash acquired $ (70 ) Customer relationships, net of deferred tax liability 2,098 Goodwill 3,477 Total assets acquired $ 5,505 |
Y.G. Soft IT Ltd [Member] | |
Business Combinations (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities | Net liabilities, excluding $402 cash acquired $ (402 ) Customer relationships, net of deferred tax liability 886 Redeemable non-controlling interests (719 ) Goodwill 967 Total assets acquired $ 732 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule Of Cash And Cash Equivalents [Abstract] | |
Schedule of cash and cash equivalents | January 1, December 31, 2021 2021 2022 Cash and deposits for immediate withdrawal $ 83,306 $ 82,302 $ 78,489 Cash equivalents in NIS-denominated deposit 4,821 5,788 4,573 $ 88,127 $ 88,090 $ 83,062 |
Other Accounts Receivavable A_2
Other Accounts Receivavable And Prepaid Expesnes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Other Accounts Receivable And Prepaid Expenses [Abstract] | |
Schedule of other accounts receivable and prepaid expenses | January 1, December 31, 2021 2021 2022 Prepaid expenses $ 3,581 $ 4,578 $ 4,262 Government authorities 3,005 3,601 3,659 Related parties 615 29 3,077 Others 4,550 2,819 2,654 $ 11,751 $ 11,027 $ 13,652 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Fair Value Measurement [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Fair value measurements December 31, 2022 Level 3 Total Liabilities: Liability in respect of business combinations 19,693 19,693 Put options of non-controlling interests 28,292 28,292 $ 47,985 $ 47,985 Fair value measurements December 31, 2021 Level 3 Total Liabilities: Liability in respect of business combinations 17,772 17,772 Put options of non-controlling interests 29,334 29,334 $ 47,106 $ 47,106 Fair value measurements January 1, 2021 Level 3 Total Liabilities: Liability in respect of business combinations 10,561 10,561 Put options of non-controlling interests 23,926 23,926 $ 34,487 $ 34,487 |
Schedule of liabilities in respect of the business combinations | December 31, 2021 2022 Opening balance $ 10,561 $ 17,772 Increase in contingent consideration due to acquisitions 3,098 10,670 Payment of contingent consideration (1,816 ) (8,547 ) Increase in fair value of contingent consideration 3,476 119 Decrease in fair value of contingent consideration (244 ) (1,025 ) Foreign currency translation adjustments (36 ) (598 ) Amortization of interest and exchange rate 2,661 1,302 Closing balance $ 17,772 $ 19,693 |
Schedule of financial assets and liabilities in the consolidated statements of financial position | January 1, December 31, 2021 2021 2022 U.S. Dollars in thousands Financial assets Financial assets at cost: Cash and cash equivalents $ 88,127 $ 88,090 $ 83,062 Short-term bank deposits 289 5,586 3,904 Total financial assets at cost $ 88,416 $ 93,676 $ 86,966 Total financial assets $ 88,416 $ 93,676 $ 86,966 Financial liabilities Financial liabilities at fair value through equity: Put options of non-controlling interests $ 23,926 $ 29,334 $ 28,292 Financial liabilities at fair value through profit or loss: Liability in respect of business combinations $ 15,924 $ 20,527 $ 24,663 Financial liabilities measured at amortized cost: Loans from bank and financial institutions (short-term and long-term debt) $ 24,950 $ 37,263 $ 51,167 Lease liabilities 25,022 25,174 28,873 Total financial liabilities measured at amortized cost: $ 49,972 $ 62,437 $ 80,040 Total financial and lease liabilities $ 89,821 $ 112,298 $ 132,995 |
Property , Plants and Equipme_2
Property , Plants and Equipment , Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Property Plant And Equipment [Abstract] | |
Schedule of the composition and movement | Software Motor Office Computers peripheral Leasehold Total Cost: Balance as of January 1, 2022 $ 1,623 $ 1,444 $ 3,839 $ 8,106 $ 3,725 $ 18,737 Additions during the year: Purchases 110 9 1,365 2,702 195 4,381 Acquisitions of subsidiaries 4 - 55 112 8 179 Adjustments arising from translating financial statements of foreign operations (220 ) (181 ) (555 ) (1,668 ) 1,996 (628 ) Decreases during the year: Disposals (25 ) (2 ) (309 ) (632 ) (44 ) (1,012 ) Balance as of December 31, 2022 $ 1,492 $ 1,270 $ 4,395 $ 8,620 $ 5,880 $ 21,657 Accumulated depreciation: Balance as of January 1, 2022 $ 1,510 $ 1,240 $ 2,480 $ 6,594 $ 1,041 $ 12,865 Additions during the year: Depreciation 47 4 583 1,192 84 1,910 Disposals (23 ) (2 ) (284 ) (580 ) (41 ) (930 ) Adjustments arising from translating financial statements of foreign operations (135 ) (152 ) 104 (520 ) 177 (526 ) Balance as of December 31, 2022 $ 1,399 $ 1,090 2,883 $ 6,686 $ 1,261 $ 13,319 Depreciated cost at December 31, 2022 $ 93 $ 180 $ 1,512 $ 1,934 $ 4,619 $ 8,338 Software Motor Office Computers Leasehold Total Cost: Balance as of January 1, 2021 $ 1,621 $ 1,411 $ 3,627 $ 7,021 $ 3,611 $ 17,291 Additions during the year: Purchases 88 3 453 830 65 1,439 Acquisition of subsidiaries 8 - 40 82 6 136 Adjustments arising from translating financial statements of foreign operations (89 ) 30 (253 ) 231 47 (34 ) Decreases during the year: Disposals (5 ) - (28 ) (58 ) (4 ) (95 ) Balance as of December 31, 2021 $ 1,623 $ 1,444 $ 3,839 $ 8,106 $ 3,725 $ 18,737 Accumulated depreciation: Balance as of January 1, 2021 $ 1,458 $ 866 $ 2,340 $ 5,886 $ 753 $ 11,303 Additions during the year: Depreciation 103 4 530 1,084 75 1,796 Disposals (5 ) - (28 ) (58 ) (4 ) (95 ) Adjustments arising from translating financial statements of foreign operations (46 ) 370 (362 ) (318 ) 217 (139 ) Balance as of December 31, 2021 $ 1,510 $ 1,240 $ 2,480 $ 6,594 $ 1,041 $ 12,865 Depreciated cost at December 31, 2021 $ 113 $ 204 $ 1,359 $ 1,512 $ 2,684 $ 5,872 Depreciated cost at January 1, 2021 $ 163 $ 545 $ 1,287 $ 1,135 $ 2,858 $ 5,988 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Intangible Assets Net [Abstract] | |
Schedule of intangible assets of composition and movement | Capitalized Customer Acquired Others Total Cost: Balance as of January 1, 2022 $ 90,101 $ 86,651 $ 18,371 $ 637 $ 195,760 Capitalized development costs 3,059 - - - 3,059 Purchase of intangible asset - 219 - - 219 Acquisition of subsidiaries - 11,319 2,707 - 14,026 Adjustments arising from translating financial statements of foreign operations (103 ) (5,055 ) (1,030 ) (53 ) (6,241 ) Balance as of December 31, 2022 $ 93,057 $ 93,134 $ 20,048 $ 584 $ 206,823 Accumulated amortization and impairment: Balance as of January 1, 2022 $ 79,354 $ 54,494 $ 10,329 $ 193 $ 144,370 Amortization recognized in the year 3,817 7,865 1,797 95 13,574 Adjustments arising from translating financial statements of foreign operations - (2,930 ) (244 ) (4 ) (3,178 ) Balance as of December 31, 2022 $ 83,171 $ 59,429 $ 11,882 $ 284 $ 154,766 Amortized cost at December 31, 2022 $ 9,886 $ 33,705 $ 8,166 $ 300 $ 52,057 Capitalized Software development costs Customer relationship Acquired technology Others Total Cost: Balance as of January 1, 2021 $ 86,240 $ 78,750 $ 18,052 $ 616 $ 183,658 Capitalized development costs 3,193 - - - 3,193 Acquisition of subsidiaries - 6,445 - - 6,445 Adjustments arising from translating financial statements of foreign operations 668 1,456 319 21 2,464 Balance as of December 31, 2021 $ 90,101 $ 86,651 $ 18,371 $ 637 $ 195,760 Accumulated amortization and impairment: Balance as of January 1, 2021 $ 74,841 $ 46,621 $ 8,720 $ 72 $ 130,254 Amortization recognized in the year 4,513 6,962 1,468 111 13,054 Adjustments arising from translating financial statements of foreign operations - 911 140 11 1,062 Balance as of December 31, 2021 $ 79,354 $ 54,494 $ 10,329 $ 193 $ 144,370 Amortized cost at December 31, 2021 $ 10,747 $ 32,157 $ 8,042 $ 444 $ 51,390 Amortized cost at January 1, 2021 $ 11,399 $ 32,129 $ 9,332 $ 544 $ 53,404 |
Schedule of amortization expenses related to intangible assets | Year ended December 31, 2021 2022 Cost of revenues $ 6,068 $ 5,405 Selling and marketing expenses 6,968 8,169 $ 13,054 $ 13,574 |
Schedule of intangible assets composition by reportable segment | IT Software Total Capitalized Software development costs $ 1,079 $ 8,807 $ 9,886 Customer relationship 22,373 11,332 33,705 Acquired technology 1,751 6,415 8,166 Others - 300 300 Total $ 25,203 $ 26,854 $ 52,057 |
Schedule of estimated future amortization of intangible assets | 2023 $ 13,011 2024 11,075 2025 9,048 2026 7,162 2027 and thereafter 11,761 $ 52,057 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Goodwill [Abstract] | |
Schedule of carrying amount of goodwill | IT Software Total As of January 1, 2021 $ 69,346 $ 66,336 $ 135,682 Acquisition of subsidiaries 5,068 3,477 8,545 Measurement period adjustments 321 558 879 Foreign currency translation adjustments 868 829 1,697 As of December 31, 2021 $ 75,603 $ 71,200 $ 146,803 Acquisition of subsidiaries 19,622 2,705 22,327 Measurement period adjustments (902 ) (176 ) (1,078 ) Foreign currency translation adjustments (4,326 ) (5,027 ) (9,353 ) As of December 31, 2022 $ 89,997 $ 68,702 $ 158,699 |
Schedule of assessment for goodwill impairment | December 31, 2022 IT Software Carrying amount $ 185,549 $ 85,325 Weighted average cost of capital 14.2 % 13.4 % Terminal value growth rate 3 % 3 % |
Short Term Debts (Tables)
Short Term Debts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Short Term Debts [Abstract] | |
Schedule of short term debts | Interest rate January 1, December 31, December 31, % Currency 2021 2021 2022 Short-term loans from banks 1.7-2.6 NIS $ 1,328 $ 4,720 $ 2,449 Current maturities of long-term loans from financial institutions and banks 2.1-3.3 NIS 10,202 8,551 9,310 Current maturities of long-term loans from banks 2.1 + SOFR-SOFR+2.25 USD - 3,750 8,908 Accrued interest on long term debt 2.6- 3.14 NIS 68 27 23 Accrued interest on long term debt 6.07 USD - 60 65 $ 11,598 $ 17,108 $ 20,755 |
Other Accounts Payable (Tables)
Other Accounts Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Accounts Payable [Abstract] | |
Schedule of other accounts payable | January 1, December 31, 2021 2021 2022 Employees and payroll accruals $ 28,562 $ 27,826 $ 29,746 Accrued expenses 7,017 8,873 10,239 Government authorities and other 6,198 8,392 6,857 Total $ 41,777 $ 45,091 $ 46,842 |
Long Term Debts (Tables)
Long Term Debts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long Term Debts [Abstract] | |
Schedule of maturity dates | Linkage Interest January 1, December 31, basis rate 2021 2021 2022 % Loans from banks and others (1) NIS 2.1 – 5 $ 23,466 $ 17,388 $ 12,161 Bank loans (2) USD 2.1 + SOFR-SOFR+2.25 - 15,000 36,408 Other long term debts JPY 1.9 88 68 61 $ 23,554 $ 32,456 $ 48,630 Less current maturities NIS, USD (10,202 ) (12,301 ) (18,218 ) $ 13,352 $ 20,155 $ 30,412 (1) This is comprised of a loan obtained by the Company on November 2016 in the amount of $ 31,356. The loan is linked to the New Israel Shekel, and was obtained from an Israeli financial institution (“the Loan”). The principal amount of the loan is payable in seven equal annual installments with the final payment due on November 2, 2023 and bears a fixed interest rate of 2.60% per annum, payable in two semi-annual payments. (2) On June 1, 2021, the Company obtained a loan in the amount of $ 15,000 from an Israeli bank. The principal amount of the loan is payable in eight equal semi-annual installments with the final payment due on December 1, 2025 and bears a fixed interest rate of SOFR + 2.1% per annum, payable in two semi-annual payments. |
Schedule of maturity dates | January 1, December 31, 2021 2021 2022 First year (Current maturities) $ 10,202 $ 12,301 $ 18,218 Second year 6,572 10,891 10,043 Third year 6,484 4,462 9,818 Fourth year 148 4,203 5,000 Fifth year and thereafter 148 599 5,551 Total $ 23,554 $ 32,456 $ 48,630 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Leases [Abstract] | |
Schedule of maturity analysis of undiscounted future lease payments for lease liabilities | 2023 $ 5,370 2024 4,344 2025 3,309 2026 2,447 2027 1,964 2028 and thereafter 17,258 Total undiscounted cash flows $ 34,692 Less imputed interest (5,819 ) Present value of lease liabilities $ 28,873 |
Schedule of lease information | Year ended December 31, 2021 2022 Expenses relating to operating lease costs $ 2,889 $ 1,930 Expenses relating to short-term leases $ 57 $ 109 Expenses relating to variable lease payments $ 2,928 $ 2,753 Total cash outflow for leases $ 5,874 $ 4,792 |
Schedule of weighted average remaining lease terms | December 31, 2022 Weighted average remaining lease term (years) 12.4 Weighted average discount rate 2.96 % |
Schedule of right-of-use assets | Buildings Motor Total Cost: Balance as of January 1, 2022 $ 33,241 $ 3,505 $ 36,746 Additions during the year: New leases 4,881 1,468 6,349 Modification of leases 589 89 678 Adjustments for indexation 947 95 1,042 Adjustments arising from translating financial statements of foreign operations (1,228 ) 7 (1,221 ) Acquisition of subsidiaries 2,714 40 2,754 Disposals during the year: Termination of leases (692 ) (333 ) (1,025 ) Balance as of December 31, 2022 $ 40,452 $ 4,871 $ 45,323 Accumulated depreciation: Balance as of January 1, 2022 11,943 1,523 13,466 Additions during the year: Depreciation 3,151 1,169 4,320 Adjustments arising from translating financial statements of foreign operations 665 29 694 Disposals during the year: Termination of leases (509 ) (184 ) (693 ) Balance as of December 31, 2022 15,250 2,537 17,787 Depreciated cost at December 31, 2022 $ 25,202 $ 2,334 $ 27,536 Buildings Motor vehicles Total Cost: Balance as of January 1, 2021 $ 28,563 $ 3,283 $ 31,846 Additions during the year: New leases 4,199 235 4,434 Adjustments for indexation 186 103 289 Adjustments arising from translating financial statements of foreign operations 1,781 159 1,940 Acquisition of subsidiaries 1,129 - 1,129 Disposals during the year: Termination of leases (2,617 ) (275 ) (2,892 ) Balance as of December 31, 2021 $ 33,241 $ 3,505 $ 36,746 Accumulated depreciation: Balance as of January 1, 2021 7,432 1,051 8,483 Additions during the year: Depreciation 4,514 473 4,987 Adjustments arising from translating financial statements of foreign operations 1,510 157 1,667 Disposals during the year: Termination of leases (1,511 ) (160 ) (1,671 ) Balance as of December 31, 2021 11,945 1,521 13,466 Depreciated cost at December 31, 2021 $ 21,296 $ 1,984 $ 23,280 |
Share Based Payments (Tables)
Share Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Share Based Payment Arrangements [Abstract] | |
Schedule of fair value of the options granted using the Binomial model | Year ended Share price $ 16.85 Contractual life 10 years Expected exercise factor 1.5 Dividend yield 0 % Expected volatility (weighted average) 35.1 % Risk-free interest rate 0.5%–1.3 % Fair value of option at the grant date $ 16.85 Year ended Share price $ 2,110 Contractual life 8 years Expected exercise factor 1.5 Dividend yield 0 % Expected volatility (weighted average) 41 % Risk-free interest rate 3.28%–3.65 % Fair value of option at the grant date $ 1,078–$2,126 |
Schedule of employee option activity | Number of options Weighted Weighted Aggregate Outstanding at January 1, 2022 66,250 $ 0.45 7.96 $ 1,360 Exercised (20,000 ) - Forfeited (20,000 ) - Outstanding at December 31, 2022 26,250 $ 0.91 5.95 $ 397 Exercisable at December 31, 2022 6,250 $ 3.81 0.6 $ 76 Number Weighted Weighted Aggregate Outstanding at January 1, 2022 - $ - - $ - Granted 4,028 264.67 Outstanding at December 31, 2022 4,028 264.67 7.94 7,499 Exercisable at December 31, 2022 827 $ 0.28 7.92 $ 1,839 |
Schedule of options outstanding | Exercise price Options Weighted Options Weighted In $ 0 20,000 7.62 - $ - 3.81 6,250 0.6 6,250 $ 3.81 26,250 5.99 6,250 $ 3.81 Exercise price Options Weighted Options Weighted In $ 0.28 3,238 7.92 827 $ 0.28 469 297 7.99 - - 1,878 493 7.99 - - 4,028 7.94 827 $ 0.28 |
Schedule of share-based payment expense related to employee stock option | Year ended December 31, 2021 2022 Selling and marketing expenses $ 956 $ (56 ) General and administrative expenses - 2,135 $ 956 $ 2,079 |
Employee Benefit Liabilities (T
Employee Benefit Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of Employee Benfit Liabilities [Abstract] | |
Schedule of defined benefit plans | January 1, December 31, 2021 2021 2022 Defined benefit obligation $ 5,545 $ 4,551 $ 2,476 Fair value of plan assets (4,673 ) (3,646 ) (1,575 ) Net defined benefit liability $ 872 $ 905 $ 901 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | December 31, 2021 2022 Accumulated foreign currency translation adjustments 9,238 (6,585 ) Accumulated unrealized gain on derivative instruments, net 26 26 Total other comprehensive income (loss) $ 9,264 $ (6,559 ) |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax [Abstract] | |
Schedule of presentation in the consolidated statements of financial position | January 1, December 31, 2021 2021 2022 Deferred taxes assets $ 6,235 $ 7,993 $ 3,618 Deferred tax liabilities (17,484 ) (17,945 ) (10,686 ) $ (11,249 ) $ (9,952 ) $ (7,068 ) |
Schedule of composition of deferred taxes | January 1, December 31, 2021 2021 2022 Net operating losses carried forward $ 168 $ 312 $ 349 Intangibles, fixed asset, lease liabilities and right of use assets (12,395 ) (12,177 ) (11,929 ) Reserves and allowances 982 1,913 4,512 $ (11,249 ) $ (9,952 ) $ (7,068 ) |
Schedule of income tax | Year ended 2021 2022 Current: Domestic $ 7,847 $ 11,368 Foreign 6,123 6,304 13,970 17,672 Deferred taxes: Domestic (1,149 ) (1,318 ) Foreign (2,543 ) (5,216 ) (3,692 ) (6,534 ) Taxes on income $ 10,278 $ 11,138 |
Schedule of theoretical tax expense | Year ended 2021 2022 Income before income taxes, as per the statement of operations $ 45,617 $ 57,417 Statutory tax rate in Israel 23 % 23 % Tax computed at the statutory tax rate 10,494 13,205 Tax adjustment in respect of different tax rates 283 (1,756 ) Deferred taxes on losses for which deferred taxes were not created (80 ) (511 ) Tax-deductible costs, not included in the accounting costs (1,041 ) (2,680 ) Non-deductible expenses and tax expenses in respect of prior years, net 1,001 2,670 Uncertain tax positions and other (379 ) 210 Taxes on income $ 10,278 $ 11,138 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of deferred revenues from contracts with customers | January, 1 December 31, 2021 2021 2022 Trade receivables (net of allowance for credit losses of $3,967, $5,071 and $5,416 at January 1, 2021, December 31, 2021 and 2022, respectively) $ 91,986 $ 116,975 $ 118,126 Unbilled receivables 14,842 19,614 26,114 Contract assets 4,231 5,482 4,240 Long-term unbilled receivables *) - - 2,548 Long-term trade receivables *) 1,410 1,318 735 Deferred revenues (short-term contract liabilities) $ 8,793 $ 10,771 $ 9,808 *) Included in Other long-term receivables in the consolidated statements of financial position . |
Schedule of past due but not impaired trade receivables | Past due trade receivables with aging of Neither impaired Up to 30 days 31-60 days 61-90 days 91-120 days Over 121 days Total Unpaid Allowance Total trade December 31, 2022 $ 67,793 $ 24,150 $ 16,869 $ 12,863 $ 4,125 $ 13,311 $ 139,111 $ (15,569 ) $ (5,416 ) $ 118,126 December 31, 2021 $ 66,316 $ 27,776 $ 13,658 $ 11,454 $ 5,939 $ 10,391 $ 135,534 $ (13,488 ) $ (5,071 ) $ 116,975 |
Schedule of revenue by timing of revenue recognition | Year ended 2021 2022 Products and services transferred over time $ 449,391 $ 533,862 Products transferred at a point in time 30,934 32,930 $ 480,325 $ 566,792 |
Selected Statements of Income_2
Selected Statements of Income Data (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Selected Statements of Income Data [Abstract] | |
Schedule of research and development costs, net | Year ended 2021 2022 Total costs $ 12,188 $ 13,149 Less - capitalized software costs (3,193 ) (3,059 ) Research and development, net $ 8,995 $ 10,090 |
Schedule of selling and marketing expenses | Year ended 2021 2022 Salary and related expenses $ 26,100 $ 33,474 Advertising expenses 2,522 2,676 Cost of share-based payment 956 (56 ) Others 8,569 10,763 Total selling and marketing expenses $ 38,147 $ 46,857 |
Schedule of general and administrative expenses | Year ended 2021 2022 Salary and related expenses $ 24,072 $ 21,492 Subcontractors 3,842 5,335 Cost of share-based payment - 2,135 Others 3,308 8,590 Total general and administrative expenses $ 31,222 $ 37,552 |
Schedule of financial income and expenses | Year ended 2021 2022 Financial expenses: Financial expenses related to liabilities in respect of business combinations $ 2,817 $ 744 Interest expenses on loans and borrowings 615 1,743 Interest expenses attributed to leases 719 691 Bank charges, negative foreign exchange differences and other financial expenses 2,468 2,559 6,619 5,737 Financial income: Interest income from deposits, positive foreign exchange differences and other financial income 113 1,392 113 1,392 Financial expenses, net $ 6,506 $ 4,345 |
Schedule of computation of basic and diluted net earnings per share | Year ended 2021 2022 Numerator: Net income attributable to Magic shareholders $ 29,767 $ 40,470 Denominator: Basic earnings per share - weighted average shares outstanding 49,055,082 49,089,044 Effect of dilutive securities 44,972 42,267 Diluted earnings per share – adjusted weighted average shares outstanding 49,100,054 49,131,311 Basic and diluted net earnings per share 0.61 0.82 |
Operating segments (Tables)
Operating segments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Operating segments [Abstract] | |
Schedule of reported segment results of operation | Software IT Unallocated Total 2022 Total revenues $ 99,374 $ 467,418 $ - $ 566,792 Expenses 72,115 427,446 5,469 505,030 Operating income (loss) $ 27,259 $ 39,972 $ (5,469 ) $ 61,762 Depreciation and amortization $ 10,321 $ 9,102 $ 372 $ 19,795 2021 Total revenues $ 95,589 $ 384,736 $ - $ 480,325 Expenses 74,863 347,712 5,627 428,202 Operating income (loss) $ 20,726 $ 37,024 $ (5,627 ) $ 52,123 Depreciation and amortization $ 10,619 $ 8,846 $ 372 $ 19,837 |
Schedule of long-lived assets classified according to geographical destination | Year ended 2021 2022 United States $ 254,342 $ 308,485 Israel 180,462 205,258 Europe 30,085 39,247 Japan 11,443 10,121 Other 3,993 3,681 $ 480,325 $ 566,792 |
Schedule of long-lived assets classified according to geographical destination | January, 1 December 31, 2021 2021 2022 United States $ 74,577 $ 76,369 $ 82,325 Israel 129,248 138,071 148,819 Europe 5,115 4,423 7,885 Japan 6,428 5,543 4,696 Other 3,069 2,939 2,905 $ 218,437 $ 227,345 $ 246,630 |
Transition to IFRS (Tables)
Transition to IFRS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Transition To Ifrs Abstract | |
Schedule of consolidated statement of profit or loss | As of January 1, 2021 U.S. GAAP Other GAAP IFRS ASSETS CURRENT ASSETS: Cash and cash equivalents $ 88,127 $ - $ 88,127 Short-term deposits 289 - 289 Trade receivables, net 91,986 - 91,986 Unbilled receivables and contract assets 19,073 - 19,073 Other accounts receivable and prepaid expenses 11,751 - 11,751 Total current assets 211,226 - 211,226 LONG-TERM ASSETS: Severance pay fund 4,673 (4,673 ) - Deferred taxes 6,397 (162 ) 6,235 Right-of-use assets 24,509 (1,146 ) 23,363 Other accounts receivable 5,507 - 5,507 Property, plants and equipment, net 5,988 - 5,988 Intangible assets, net 53,404 - 53,404 Goodwill 135,682 - 135,682 Total long-term assets 236,160 (5,981 ) 230,179 Total assets $ 447,386 $ (5,981 ) $ 441,405 LIABILITIES AND EQUITY CURRENT LIABILITIES: Short term debt $ 11,529 $ 69 $ 11,598 Trade payables 14,250 - 14,250 Accrued expenses and other accounts payable 41,846 (69 ) 41,777 Current maturities of operating lease liabilities 3,413 379 3,792 Liabilities in respect of business combinations 4,998 - 4,998 Redeemable non-controlling interests - 14,611 14,611 Deferred revenue and customer advances 8,793 - 8,793 Total current liabilities 84,829 14,990 99,819 LONG-TERM LIABILITIES: Long-term debt 13,352 - 13,352 Long-term operating lease liabilities 21,109 121 21,230 Liability in respect of business combinations 10,926 - 10,926 Deferred taxes 17,639 (155 ) 17,484 Redeemable non-controlling interests - 9,315 9,315 Accrued severance pay, net 5,545 (4,673 ) 872 Total long-term liabilities 68,571 (4,608 ) 73,179 REDEEMABLE NON-CONTROLLING INTEREST 24,980 (24,980 ) - EQUITY Share capital 1,164 - 1,164 Additional paid-in capital 211,713 (23,298 ) 188,415 Accumulated other comprehensive loss 7,835 (398 ) 7,437 Accumulated earnings 39,720 22,953 62,673 Total equity attributable to company shareholders’ 260,432 (743 ) 259,689 Non-controlling interests 8,574 143 8,718 Total equity 269,006 (600 ) 268,407 Total liabilities, redeemable non-controlling interest and equity $ 447,386 $ (5,981 ) $ 441,405 As of December 31, 2021 U.S. GAAP Other GAAP IFRS ASSETS CURRENT ASSETS: Cash and cash equivalents $ 88,090 $ - $ 88,090 Short-term deposits 5,586 - 5,586 Trade receivables, net 116,975 - 116,975 Unbilled receivables and contract assets 25,096 - 25,096 Other accounts receivable and prepaid expenses 11,032 (5 ) 11,027 Total current assets 246,779 (5 ) 246,774 LONG-TERM ASSETS: Severance pay fund 3,646 (3,646 ) - Deferred taxes 8,091 (98 ) 7,993 Right-of-use assets 24,299 (1,019 ) 23,280 Other accounts receivable 5,165 - 5,165 Property, plants and equipment, net 5,872 - 5,872 Intangible assets, net 51,390 - 51,390 Goodwill 146,803 - 146,803 Total long-term assets 245,266 (4,763 ) 240,503 Total assets $ 492,045 $ (4,768 ) $ 487,277 LIABILITIES AND EQUITY CURRENT LIABILITIES: Short term debt $ 17,032 $ 76 $ 17,108 Trade payables 24,711 - 24,711 Accrued expenses and other accounts payable 45,173 (82 ) 45,091 Current maturities of operating lease liabilities 3,943 (676 ) 3,267 Liabilities in respect of business combinations 6,635 - 6,635 Redeemable non-controlling interests - 23,197 23,197 Deferred revenue and customer advances 10,771 - 10,771 Total current liabilities 108,265 22,515 130,780 LONG-TERM LIABILITIES: Long-term debt 20,155 - 20,155 Long-term operating lease liabilities 20,970 937 21,907 Liability in respect of business combinations 13,892 - 13,892 Deferred taxes 18,112 (167 ) 17,945 Redeemable non-controlling interests - 6,137 6,137 Accrued severance pay, net 4,551 (3,646 ) 905 Total long-term liabilities 77,680 3,261 80,941 REDEEMABLE NON-CONTROLLING INTEREST 30,432 (30,432 ) - EQUITY Share capital 1,165 - 1,165 Additional paid-in capital 211,543 (27,496 ) 184,047 Accumulated other comprehensive loss 9,294 (30 ) 9,264 Accumulated earnings 43,246 27,414 70,660 Total equity attributable to company shareholders’ 265,248 (112 ) 265,136 Non-controlling interests 10,420 - 10,420 Total equity 275,668 (112 ) 275,556 Total liabilities, redeemable non-controlling interest and equity $ 492,045 $ (4,768 ) $ 487,277 |
Schedule of consolidated statement of profit or loss | Year ended December 31, 2021 U.S. GAAP GAAP IFRS Revenues Software services $ 30,934 $ - $ 30,934 Maintenance and technical support 36,149 - 36,149 Consulting services 413,242 - 413,242 Total revenues 480,325 - 480,325 Cost of revenues: Software services 12,182 - 12,182 Maintenance and technical support 4,144 - 4,144 Consulting services 331,005 - 331,005 Total cost of revenues 347,331 - 347,331 Gross profit 132,994 - 132,994 Research and development expenses, net 8,995 - 8,995 Selling, marketing expenses 38,147 - 38,147 General and administrative expenses 32,110 (888 ) 31,222 Change in valuation of contingent consideration related to acquisitions 2,507 - 2,507 Operating income 51,235 888 52,123 Financial expenses (3,268 ) (534 ) (3,802 ) Financial income 113 - 113 Increase in valuation of consideration related to acquisitions (2,817 ) - (2,817 ) Income before taxes on income 45,263 354 45,617 Taxes on income 10,359 (81 ) 10,278 Net income 34,904 435 35,339 Attributable to: Redeemable non-controlling interests 3,517 (3,517 ) - Non-controlling interests 2,055 3,517 5,572 Equity holders of the Company $ 29,332 $ 435 $ 29,767 Net earnings per share attributable to company Shareholders Basic and diluted earnings per share $ 0.52 $ 0.09 $ 0.61 |
Schedule of consolidated statement of profit or loss | Share Additional Retained Accumulated Total Equity As of January 1, 2021 As reported in the Company’s consolidated financial statements as of January 1, 2021 in accordance with U.S. GAAP: $ 1,164 $ 211,713 $ 39,720 $ 7,835 $ 260,432 Transition to IFRS: Measurement adjustments related to leases - - (1,654 ) - (1,654 ) Measurement adjustments related to redeemable non-controlling interests - (23,298 ) 24,607 (398 ) 911 - (23,298 ) 22,953 (398 ) (743 ) As of January 1, 2021 in accordance with IFRS: $ 1,164 $ 188,415 $ 62,673 $ 7,437 $ 259,689 As of December 31, 2021 As reported in the Company’s consolidated financial statements as of December 31, 2021 in accordance with U.S. GAAP: $ 1,165 $ 211,543 $ 43,246 $ 9,294 $ 265,248 Transition to IFRS: Measurement adjustments related to leases - - (1,210 ) - (1,210 ) Measurement adjustments related to redeemable non-controlling interests - (27,496 ) 28,624 (30 ) 1,098 - (27,496 ) 27,414 (30 ) (112 ) As of December 31, 2021 in accordance with IFRS: $ 1,165 $ 184,047 $ 70,660 $ 9,264 $ 265,136 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
Significant Accounting Policies (Details) [Line Items] | |||
Interest rate | 3.54% | 0.27% | 0.27% |
General and administrative (in Dollars) | $ 1,778 | $ 892 | |
Bottom of range [member] | Computer software [member] | |||
Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 5 years | ||
Top of range [member] | Computer software [member] | |||
Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 7 years |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of quantitative information about right of use assets | 12 Months Ended |
Dec. 31, 2022 | |
Land and buildings [member] | |
Significant Accounting Policies (Details) - Schedule of quantitative information about right of use assets [Line Items] | |
Right use of asset | 3 years |
Motor vehicles [member] | |
Significant Accounting Policies (Details) - Schedule of quantitative information about right of use assets [Line Items] | |
Right use of asset | 3 years |
Bottom of range [member] | Land and buildings [member] | |
Significant Accounting Policies (Details) - Schedule of quantitative information about right of use assets [Line Items] | |
Right use of asset | 1 year |
Bottom of range [member] | Motor vehicles [member] | |
Significant Accounting Policies (Details) - Schedule of quantitative information about right of use assets [Line Items] | |
Right use of asset | 1 year |
Top of range [member] | Land and buildings [member] | |
Significant Accounting Policies (Details) - Schedule of quantitative information about right of use assets [Line Items] | |
Right use of asset | 11 years |
Top of range [member] | Motor vehicles [member] | |
Significant Accounting Policies (Details) - Schedule of quantitative information about right of use assets [Line Items] | |
Right use of asset | 5 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation - Bottom of range [member] | 12 Months Ended |
Dec. 31, 2022 | |
Software [Member] | |
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation [Line Items] | |
Estimated useful life of assets | 3–5 (mainly 5) |
Computers and peripheral equipment [Member] | |
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation [Line Items] | |
Estimated useful life of assets | 3–5 |
Office furniture and equipment [Member] | |
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation [Line Items] | |
Estimated useful life of assets | 7–15 (mainly 7) |
Motor vehicles [Member] | |
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation [Line Items] | |
Estimated useful life of assets | 7 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of intangible assets with indefinite useful life | 12 Months Ended |
Dec. 31, 2022 | |
Customer relationships [Member] | |
Significant Accounting Policies (Details) - Schedule of intangible assets with indefinite useful life [Line Items] | |
Useful life of intangible asset | Up to 15 |
Acquired Technology [Member] | |
Significant Accounting Policies (Details) - Schedule of intangible assets with indefinite useful life [Line Items] | |
Useful life of intangible asset | Up to 10 (mainly 5) |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Jul. 01, 2022 | Apr. 01, 2022 | Mar. 31, 2022 | Jan. 27, 2022 | Dec. 02, 2021 | Jul. 04, 2021 | Apr. 01, 2021 | Jan. 01, 2021 | Apr. 30, 2023 | Aug. 23, 2022 | Apr. 30, 2022 | Dec. 31, 2022 | |
Business Combinations (Details) [Line Items] | ||||||||||||
Outstanding share percentage | 50.10% | |||||||||||
Competitive digital ecosystem | $ 21,492 | |||||||||||
Closing payment | $ 11,042 | $ 4,000 | $ 367 | $ 7,993 | ||||||||
Advance payment for future acquisition | $ 1,500,000 | |||||||||||
Share purchase holding percentage | 100% | |||||||||||
Fair value of acquisition date | $ 10,450 | |||||||||||
Fair value of financial liability | $ 8,560 | |||||||||||
Shares percentage | 100% | |||||||||||
Net working capital adjustments | $ 11,629 | |||||||||||
Cash consideration amount | $ 3,428 | |||||||||||
Consideration paid | $ 1,753 | |||||||||||
Total consideration amount | 6,000 | 1,134 | ||||||||||
Equal installments amount | $ 2,000 | |||||||||||
Contingent consideration amounted | 2,595 | $ 510 | ||||||||||
Settlement liabilities current | $ 1,055 | |||||||||||
Share purchase holding percentage (in Dollars per share) | $ 60 | |||||||||||
Paid in cash | $ 256 | |||||||||||
Option interest percentage | 40% | |||||||||||
Non-adjusting Events After Reporting Period [Member] | ||||||||||||
Business Combinations (Details) [Line Items] | ||||||||||||
Shares percentage | 100% | |||||||||||
Menarva Ltd [Member] | ||||||||||||
Business Combinations (Details) [Line Items] | ||||||||||||
Closing payment | 3,000 | |||||||||||
Total consideration amount | $ 5,595 |
Business Combinations (Detail_2
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities - Share purchase agreement [Member] $ in Thousands | Jan. 27, 2022 USD ($) |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities [Line Items] | |
Net liabilities, excluding $1,548 of cash acquired | $ (2,762) |
Intangible assets, net of deferred tax liabilities | 7,445 |
Goodwill | 15,261 |
Total assets acquired | $ 19,944 |
Business Combinations (Detail_3
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) $ in Thousands | Jan. 27, 2022 USD ($) |
Share purchase agreement [Member] | |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) [Line Items] | |
Net liabilities excluding of cash acquired | $ 1,548 |
Business Combinations (Detail_4
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities - Goodkind Group, LLC [Member] $ in Thousands | Aug. 23, 2022 USD ($) |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities [Line Items] | |
Net assets, excluding $147 of cash acquired | $ 3,177 |
Customer relationships, net of deferred tax liabilities | 3,901 |
Goodwill | 4,404 |
Total assets acquired | $ 11,482 |
Business Combinations (Detail_5
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) $ in Thousands | Aug. 23, 2022 USD ($) |
Goodkind Group, LLC [Member] | |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) [Line Items] | |
Net liabilities excluding of cash acquired | $ 147 |
Business Combinations (Detail_6
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities - IT professional services [Member] $ in Thousands | Jul. 01, 2022 USD ($) |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities [Line Items] | |
Net assets, excluding $447 of cash acquired | $ 120 |
Customer relationships, net of deferred tax liabilities | 1,054 |
Goodwill | 1,807 |
Total assets acquired | $ 2,981 |
Business Combinations (Detail_7
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) $ in Thousands | Jul. 01, 2022 USD ($) |
IT professional services [Member] | |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) [Line Items] | |
Net liabilities excluding of cash acquired | $ 447 |
Business Combinations (Detail_8
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities - Asset Purchase Agreements [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities [Line Items] | |
Net liabilities | $ (308) |
Customer relationships, net of deferred tax liabilities | 1,163 |
Goodwill | 898 |
Total assets acquired | $ 1,753 |
Business Combinations (Detail_9
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities - EnableIT, LLC [Member] $ in Thousands | Apr. 01, 2021 USD ($) |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities [Line Items] | |
Net liabilities, excluding $42 of cash acquired | $ (34) |
Customer relationships, net of deferred tax liability | 1,833 |
Goodwill | 4,101 |
Total assets acquired | $ 5,900 |
Business Combinations (Detai_10
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) $ in Thousands | Apr. 01, 2021 USD ($) |
EnableIT, LLC [Member] | |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) [Line Items] | |
Net liabilities excluding of cash acquired | $ 42 |
Business Combinations (Detai_11
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities - Menarva Ltd [Member] $ in Thousands | Apr. 01, 2021 USD ($) |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities [Line Items] | |
Net liabilities, excluding $90 of cash acquired | $ (70) |
Customer relationships, net of deferred tax liability | 2,098 |
Goodwill | 3,477 |
Total assets acquired | $ 5,505 |
Business Combinations (Detai_12
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) $ in Thousands | Apr. 01, 2021 USD ($) |
Menarva Ltd [Member] | |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) [Line Items] | |
Net liabilities excluding of cash acquired | $ 90 |
Business Combinations (Detai_13
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities - Y.G. Soft IT Ltd [Member] $ in Thousands | Jan. 01, 2021 USD ($) |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities [Line Items] | |
Net liabilities, excluding $402 cash acquired | $ (402) |
Customer relationships, net of deferred tax liability | 886 |
Redeemable non-controlling interests | (719) |
Goodwill | 967 |
Total assets acquired | $ 732 |
Business Combinations (Detai_14
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) $ in Thousands | Jan. 01, 2021 USD ($) |
Y.G. Soft IT Ltd [Member] | |
Business Combinations (Details) - Schedule of estimated fair values of the assets acquired and liabilities (Parentheticals) [Line Items] | |
Net liabilities excluding of cash acquired | $ 402 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - Schedule of cash and cash equivalents - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Cash And Cash Equivalents [Abstract] | |||
Cash and deposits for immediate withdrawal | $ 83,306 | $ 78,489 | $ 82,302 |
Cash equivalents in NIS-denominated deposit | 4,821 | 4,573 | 5,788 |
Cash and cash equivalents | $ 88,127 | $ 83,062 | $ 88,090 |
Other Accounts Receivavable A_3
Other Accounts Receivavable And Prepaid Expesnes (Details) - Schedule of other accounts receivable and prepaid expenses - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
Schedule of Other Accounts Receivable and Prepaid Expenses [Abstract] | |||
Prepaid expenses | $ 4,262 | $ 4,578 | $ 3,581 |
Government authorities | 3,659 | 3,601 | 3,005 |
Related parties | 3,077 | 29 | 615 |
Others | 2,654 | 2,819 | 4,550 |
Total | $ 13,652 | $ 11,027 | $ 11,751 |
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, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 |
Liabilities: | ||||
Liability in respect of business combinations | $ 19,693 | $ 17,772 | $ 10,561 | $ 10,561 |
Put options of non-controlling interests | 28,292 | 29,334 | 23,926 | |
Total | 47,985 | 47,106 | 34,487 | |
Level 3 of fair value hierarchy [member] | ||||
Liabilities: | ||||
Liability in respect of business combinations | 19,693 | 17,772 | 10,561 | |
Put options of non-controlling interests | 28,292 | 29,334 | 23,926 | |
Total | $ 47,985 | $ 47,106 | $ 34,487 |
Fair Value Measurement (Detai_2
Fair Value Measurement (Details) - Schedule of liabilities in respect of the business combinations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Liabilities In Respect Of The Business Combinations [Abstract] | ||
Opening balance | $ 17,772 | $ 10,561 |
Increase in contingent consideration due to acquisitions | 10,670 | 3,098 |
Payment of contingent consideration | (8,547) | (1,816) |
Increase in fair value of contingent consideration | 119 | 3,476 |
Decrease in fair value of contingent consideration | (1,025) | (244) |
Foreign currency translation adjustments | (598) | (36) |
Amortization of interest and exchange rate | 1,302 | 2,661 |
Closing balance | $ 19,693 | $ 17,772 |
Fair Value Measurement (Detai_3
Fair Value Measurement (Details) - Schedule of financial assets and liabilities in the consolidated statements of financial position - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Financial Assets And Liabilities In The Consolidated Statements Of Financial Position [Abstract] | ||||
Cash and cash equivalents | $ 88,127 | $ 83,062 | $ 88,090 | $ 88,127 |
Short-term bank deposits | 289 | 3,904 | 5,586 | |
Total financial assets at cost | 88,416 | 86,966 | 93,676 | |
Total financial assets | 88,416 | 86,966 | 93,676 | |
Put options of non-controlling interests | 23,926 | 28,292 | 29,334 | |
Liability in respect of business combinations | 15,924 | 24,663 | 20,527 | |
Loans from bank and financial institutions (short-term and long-term debt) | 24,950 | 51,167 | 37,263 | |
Lease liabilities | 25,022 | 28,873 | 25,174 | |
Total financial liabilities measured at amortized cost: | 49,972 | 80,040 | 62,437 | |
Total financial and lease liabilities | $ 89,821 | $ 132,995 | $ 112,298 |
Property , Plants and Equipme_3
Property , Plants and Equipment , Net (Details) - Schedule of the composition and movement - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
Disclosure Of Property Plant And Equipment [Abstract] | |||
Cost at beginning | $ 18,737 | $ 17,291 | |
Additions during the year: | |||
Cost Purchases | 4,381 | 1,439 | |
Cost Acquisitions of subsidiaries | 179 | 136 | |
Cost Adjustments arising from translating financial statements of foreign operations | (628) | (34) | |
Cost Disposals | (1,012) | (95) | |
Cost at ending | 21,657 | 18,737 | |
Accumulated depreciation at beginning | 12,865 | 11,303 | |
Additions during the year: | |||
Accumulated depreciation Depreciation | 1,910 | 1,796 | |
Accumulated depreciation Disposals | (930) | (95) | |
Accumulated depreciation, Adjustments arising from translating financial statements of foreign operations | (526) | (139) | |
Accumulated depreciation at ending | 13,319 | 12,865 | |
Depreciated cost at ending | 8,338 | 5,872 | |
Depreciated cost at beginning | $ 5,988 | ||
Software [Member] | |||
Disclosure Of Property Plant And Equipment [Abstract] | |||
Cost at beginning | 1,623 | 1,621 | |
Additions during the year: | |||
Cost Purchases | 110 | 88 | |
Cost Acquisitions of subsidiaries | 4 | 8 | |
Cost Adjustments arising from translating financial statements of foreign operations | (220) | (89) | |
Cost Disposals | (25) | (5) | |
Cost at ending | 1,492 | 1,623 | |
Accumulated depreciation at beginning | 1,510 | 1,458 | |
Additions during the year: | |||
Accumulated depreciation Depreciation | 47 | 103 | |
Accumulated depreciation Disposals | (23) | (5) | |
Accumulated depreciation, Adjustments arising from translating financial statements of foreign operations | (135) | (46) | |
Accumulated depreciation at ending | 1,399 | 1,510 | |
Depreciated cost at ending | 93 | 113 | |
Depreciated cost at beginning | 163 | ||
Motor vehicles [Member] | |||
Disclosure Of Property Plant And Equipment [Abstract] | |||
Cost at beginning | 1,444 | 1,411 | |
Additions during the year: | |||
Cost Purchases | 9 | 3 | |
Cost Acquisitions of subsidiaries | |||
Cost Adjustments arising from translating financial statements of foreign operations | (181) | 30 | |
Cost Disposals | (2) | ||
Cost at ending | 1,270 | 1,444 | |
Accumulated depreciation at beginning | 1,240 | 866 | |
Additions during the year: | |||
Accumulated depreciation Depreciation | 4 | 4 | |
Accumulated depreciation Disposals | (2) | ||
Accumulated depreciation, Adjustments arising from translating financial statements of foreign operations | (152) | 370 | |
Accumulated depreciation at ending | 1,090 | 1,240 | |
Depreciated cost at ending | 180 | 204 | |
Depreciated cost at beginning | 545 | ||
Office furniture and equipment [Member] | |||
Disclosure Of Property Plant And Equipment [Abstract] | |||
Cost at beginning | 3,839 | 3,627 | |
Additions during the year: | |||
Cost Purchases | 1,365 | 453 | |
Cost Acquisitions of subsidiaries | 55 | 40 | |
Cost Adjustments arising from translating financial statements of foreign operations | (555) | (253) | |
Cost Disposals | (309) | (28) | |
Cost at ending | 4,395 | 3,839 | |
Accumulated depreciation at beginning | 2,480 | 2,340 | |
Additions during the year: | |||
Accumulated depreciation Depreciation | 583 | 530 | |
Accumulated depreciation Disposals | (284) | (28) | |
Accumulated depreciation, Adjustments arising from translating financial statements of foreign operations | 104 | (362) | |
Accumulated depreciation at ending | 2,883 | 2,480 | |
Depreciated cost at ending | 1,512 | 1,359 | |
Depreciated cost at beginning | 1,287 | ||
Computers and peripheral equipment [Member] | |||
Disclosure Of Property Plant And Equipment [Abstract] | |||
Cost at beginning | 8,106 | 7,021 | |
Additions during the year: | |||
Cost Purchases | 2,702 | 830 | |
Cost Acquisitions of subsidiaries | 112 | 82 | |
Cost Adjustments arising from translating financial statements of foreign operations | (1,668) | 231 | |
Cost Disposals | (632) | (58) | |
Cost at ending | 8,620 | 8,106 | |
Accumulated depreciation at beginning | 6,594 | 5,886 | |
Additions during the year: | |||
Accumulated depreciation Depreciation | 1,192 | 1,084 | |
Accumulated depreciation Disposals | (580) | (58) | |
Accumulated depreciation, Adjustments arising from translating financial statements of foreign operations | (520) | (318) | |
Accumulated depreciation at ending | 6,686 | 6,594 | |
Depreciated cost at ending | 1,934 | 1,512 | |
Depreciated cost at beginning | 1,135 | ||
Leasehold improvements [Member] | |||
Disclosure Of Property Plant And Equipment [Abstract] | |||
Cost at beginning | 3,725 | 3,611 | |
Additions during the year: | |||
Cost Purchases | 195 | 65 | |
Cost Acquisitions of subsidiaries | 8 | 6 | |
Cost Adjustments arising from translating financial statements of foreign operations | 1,996 | 47 | |
Cost Disposals | (44) | (4) | |
Cost at ending | 5,880 | 3,725 | |
Accumulated depreciation at beginning | 1,041 | 753 | |
Additions during the year: | |||
Accumulated depreciation Depreciation | 84 | 75 | |
Accumulated depreciation Disposals | (41) | (4) | |
Accumulated depreciation, Adjustments arising from translating financial statements of foreign operations | 177 | 217 | |
Accumulated depreciation at ending | 1,261 | 1,041 | |
Depreciated cost at ending | $ 4,619 | $ 2,684 | |
Depreciated cost at beginning | $ 2,858 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - Schedule of intangible assets of composition and movement - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
Schedule Of Intangible Assets Of Composition And Movement [Abstract] | |||
Beginning balance, Cost | $ 195,760 | $ 183,658 | |
Capitalized development costs | 3,059 | 3,193 | |
Purchase of intangible asset | 219 | ||
Acquisition of subsidiaries | 14,026 | 6,445 | |
Adjustments arising from translating financial statements of foreign operations cost | (6,241) | 2,464 | |
Ending balance, Cost | 206,823 | 195,760 | |
Beginning balance, Accumulated amortization and impairment | 144,370 | 130,254 | |
Amortization recognized in the year | 13,574 | 13,054 | |
Adjustments arising from translating financial statements of foreign operations amortization | (3,178) | 1,062 | |
Ending balance, Accumulated amortization and impairment | 154,766 | 144,370 | |
Amortized cost | 52,057 | 51,390 | $ 53,404 |
Capitalized Software Development Costs [Member] | |||
Schedule Of Intangible Assets Of Composition And Movement [Abstract] | |||
Beginning balance, Cost | 90,101 | 86,240 | |
Capitalized development costs | 3,059 | 3,193 | |
Purchase of intangible asset | |||
Acquisition of subsidiaries | |||
Adjustments arising from translating financial statements of foreign operations cost | (103) | 668 | |
Ending balance, Cost | 93,057 | 90,101 | |
Beginning balance, Accumulated amortization and impairment | 79,354 | 74,841 | |
Amortization recognized in the year | 3,817 | 4,513 | |
Ending balance, Accumulated amortization and impairment | 83,171 | 79,354 | |
Amortized cost | 9,886 | 10,747 | 11,399 |
Customers Relationship [Member] | |||
Schedule Of Intangible Assets Of Composition And Movement [Abstract] | |||
Beginning balance, Cost | 86,651 | 78,750 | |
Purchase of intangible asset | 219 | ||
Acquisition of subsidiaries | 11,319 | 6,445 | |
Adjustments arising from translating financial statements of foreign operations cost | (5,055) | 1,456 | |
Ending balance, Cost | 93,134 | 86,651 | |
Beginning balance, Accumulated amortization and impairment | 54,494 | 46,621 | |
Amortization recognized in the year | 7,865 | 6,962 | |
Adjustments arising from translating financial statements of foreign operations amortization | (2,930) | 911 | |
Ending balance, Accumulated amortization and impairment | 59,429 | 54,494 | |
Amortized cost | 33,705 | 32,157 | 32,129 |
Acquired Technology [Member] | |||
Schedule Of Intangible Assets Of Composition And Movement [Abstract] | |||
Beginning balance, Cost | 18,371 | 18,052 | |
Purchase of intangible asset | |||
Acquisition of subsidiaries | 2,707 | ||
Adjustments arising from translating financial statements of foreign operations cost | (1,030) | 319 | |
Ending balance, Cost | 20,048 | 18,371 | |
Beginning balance, Accumulated amortization and impairment | 10,329 | 8,720 | |
Amortization recognized in the year | 1,797 | 1,468 | |
Adjustments arising from translating financial statements of foreign operations amortization | (244) | 140 | |
Ending balance, Accumulated amortization and impairment | 11,882 | 10,329 | |
Amortized cost | 8,166 | 8,042 | 9,332 |
Other [Member] | |||
Schedule Of Intangible Assets Of Composition And Movement [Abstract] | |||
Beginning balance, Cost | 637 | 616 | |
Purchase of intangible asset | |||
Acquisition of subsidiaries | |||
Adjustments arising from translating financial statements of foreign operations cost | (53) | 21 | |
Ending balance, Cost | 584 | 637 | |
Beginning balance, Accumulated amortization and impairment | 193 | 72 | |
Amortization recognized in the year | 95 | 111 | |
Adjustments arising from translating financial statements of foreign operations amortization | (4) | 11 | |
Ending balance, Accumulated amortization and impairment | 284 | 193 | |
Amortized cost | $ 300 | $ 444 | $ 544 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of amortization expenses related to intangible assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Amortization Expenses Related To Intangible Assets [Abstract] | ||
Cost of revenues | $ 5,405 | $ 6,068 |
Selling and marketing expenses | 8,169 | 6,968 |
Total | $ 13,574 | $ 13,054 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details) - Schedule of intangible assets composition by reportable segment $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Intangible Assets, Net (Details) - Schedule of intangible assets composition by reportable segment [Line Items] | |
Capitalized Software development costs | $ 9,886 |
Customer relationship | 33,705 |
Acquired technology | 8,166 |
Others | 300 |
Total | 52,057 |
IT professional services [Member] | |
Intangible Assets, Net (Details) - Schedule of intangible assets composition by reportable segment [Line Items] | |
Capitalized Software development costs | 1,079 |
Customer relationship | 22,373 |
Acquired technology | 1,751 |
Others | |
Total | 25,203 |
Software [Member] | |
Intangible Assets, Net (Details) - Schedule of intangible assets composition by reportable segment [Line Items] | |
Capitalized Software development costs | 8,807 |
Customer relationship | 11,332 |
Acquired technology | 6,415 |
Others | 300 |
Total | $ 26,854 |
Intangible Assets, Net (Detai_4
Intangible Assets, Net (Details) - Schedule of estimated future amortization of intangible assets $ in Thousands | Dec. 31, 2022 USD ($) |
Schedule Of Estimated Future Amortization Of Intangible Assets [Abstract] | |
2023 | $ 13,011 |
2024 | 11,075 |
2025 | 9,048 |
2026 | 7,162 |
2027 and thereafter | 11,761 |
Total | $ 52,057 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of carrying amount of goodwill - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill (Details) - Schedule of carrying amount of goodwill [Line Items] | ||
Beginning balance | $ 146,803 | $ 135,682 |
Acquisition of subsidiaries | 22,327 | 8,545 |
Measurement period adjustments | (1,078) | 879 |
Foreign currency translation adjustments | (9,353) | 1,697 |
Ending balance | 158,699 | 146,803 |
IT professional services [Member] | ||
Goodwill (Details) - Schedule of carrying amount of goodwill [Line Items] | ||
Beginning balance | 75,603 | 69,346 |
Acquisition of subsidiaries | 19,622 | 5,068 |
Measurement period adjustments | (902) | 321 |
Foreign currency translation adjustments | (4,326) | 868 |
Ending balance | 89,997 | 75,603 |
Software services [Member] | ||
Goodwill (Details) - Schedule of carrying amount of goodwill [Line Items] | ||
Beginning balance | 71,200 | 66,336 |
Acquisition of subsidiaries | 2,705 | 3,477 |
Measurement period adjustments | (176) | 558 |
Foreign currency translation adjustments | (5,027) | 829 |
Ending balance | $ 68,702 | $ 71,200 |
Goodwill (Details) - Schedule_2
Goodwill (Details) - Schedule of assessment for goodwill impairment $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
IT professional services [Member] | |
Goodwill (Details) - Schedule of assessment for goodwill impairment [Line Items] | |
Carrying amount (in Dollars) | $ 185,549 |
Weighted average cost of capital | 14.20% |
Terminal value growth rate | 3% |
Software services [Member] | |
Goodwill (Details) - Schedule of assessment for goodwill impairment [Line Items] | |
Carrying amount (in Dollars) | $ 85,325 |
Weighted average cost of capital | 13.40% |
Terminal value growth rate | 3% |
Short Term Debts (Details) - Sc
Short Term Debts (Details) - Schedule of short term debts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Total short term borrowings | $ 20,755 | $ 17,108 | $ 11,598 |
Short-term loans from banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Currency | NIS | ||
Total short term borrowings | $ 2,449 | 4,720 | 1,328 |
Current maturities of long-term loans from financial institutions and banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Currency | NIS | ||
Total short term borrowings | $ 9,310 | 8,551 | 10,202 |
Current maturities of long-term loans from banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Currency | USD | ||
Total short term borrowings | $ 8,908 | 3,750 | |
Accrued interest on long term debt [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Currency | NIS | ||
Total short term borrowings | $ 23 | 27 | 68 |
Accrued interest on long term debt [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 6.07% | ||
Currency | USD | ||
Total short term borrowings | $ 65 | $ 60 | |
Bottom of range [Member] | Short-term loans from banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 1.70% | ||
Bottom of range [Member] | Current maturities of long-term loans from financial institutions and banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 2.10% | ||
Bottom of range [Member] | Current maturities of long-term loans from banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 2.10% | ||
Bottom of range [Member] | Accrued interest on long term debt [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 2.60% | ||
Top of range [Member] | Short-term loans from banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 2.60% | ||
Top of range [Member] | Current maturities of long-term loans from financial institutions and banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 3.30% | ||
Top of range [Member] | Current maturities of long-term loans from banks [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 2.25% | ||
Top of range [Member] | Accrued interest on long term debt [Member] | |||
Short Term Debts (Details) - Schedule of short term debts [Line Items] | |||
Interest rate % | 3.14% |
Other Accounts Payable (Details
Other Accounts Payable (Details) - Schedule of other accounts payable - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
Schedule of other accounts payable [Abstract] | |||
Employees and payroll accruals | $ 29,746 | $ 27,826 | $ 28,562 |
Accrued expenses | 10,239 | 8,873 | 7,017 |
Government authorities and other | 6,857 | 8,392 | 6,198 |
Total | $ 46,842 | $ 45,091 | $ 41,777 |
Long Term Debts (Details)
Long Term Debts (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 02, 2023 | Jun. 01, 2021 | Mar. 27, 2023 | Nov. 30, 2016 | Dec. 31, 2022 | Mar. 31, 2022 | |
Long Term Debts [Abstract] | ||||||
Loan amount | $ 25,000 | |||||
Interest rate | 3.38% | 2.25% | ||||
Total equity attributable | $ 100,000 | |||||
Cash and cash equivalent | $ 10,000 | |||||
Financial debts not exceed percentage | 30% | 50% | ||||
Loan agreement description | the Company entered into a loan agreement with an Israeli bank, pursuant to which, the Company borrowed $20,000 for a four-year term (the “Bank Loan”). The Bank Loan will mature on March 27, 2027, and will be repaid in four (4) equal annual instalments of $6,052 (including interest) starting March 27, 2024. The Bank Loan bears interest at the rate SOFR + 3.38%. The Bank Loan, which may be prepaid under certain circumstances, is subject to various financial covenants which mainly consist of the following: | |||||
Loan obtained | $ 15,000 | $ 31,356 | ||||
Fixed interest rate | 2.60% | |||||
Equity | $ 150,000 |
Long Term Debts (Details) - Sch
Long Term Debts (Details) - Schedule of long term liabilities - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | ||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Total long term debt | $ 30,412 | $ 20,155 | $ 13,352 | |
Loans from banks and others [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Linkage basis | [1] | NIS | ||
Total long term debt | [1] | $ 12,161 | 17,388 | 23,466 |
Bank loans [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Linkage basis | [2] | USD | ||
Total long term debt | [2] | $ 36,408 | 15,000 | |
Other long term debts [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Linkage basis | JPY | |||
Interest rate | 1.90% | |||
Total long term debt | $ 61 | 68 | 88 | |
Total Long Term Debt [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Total long term debt | $ 48,630 | 32,456 | 23,554 | |
Less current maturities [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Linkage basis | NIS, USD | |||
Total long term debt | $ (18,218) | $ (12,301) | $ (10,202) | |
Top of range [Member] | Loans from banks and others [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Interest rate | [1] | 2.10% | ||
Top of range [Member] | Bank loans [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Interest rate | [2] | 2.10% | ||
Bottom of range [Member] | Loans from banks and others [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Interest rate | [1] | 5% | ||
Bottom of range [Member] | Bank loans [Member] | ||||
Long Term Debts (Details) - Schedule of long term liabilities [Line Items] | ||||
Interest rate | [2] | 2.25% | ||
[1] This is comprised of a loan obtained by the Company on November 2016 in the amount of $ 31,356. The loan is linked to the New Israel Shekel, and was obtained from an Israeli financial institution (“the Loan”). The principal amount of the loan is payable in seven equal annual installments with the final payment due on November 2, 2023 and bears a fixed interest rate of 2.60% per annum, payable in two semi-annual payments. |
Long Term Debts (Details) - S_2
Long Term Debts (Details) - Schedule of maturity dates - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Maturity Dates [Abstract] | |||
First year (Current maturities) | $ 10,202 | $ 18,218 | $ 12,301 |
Second year | 6,572 | 10,043 | 10,891 |
Third year | 6,484 | 9,818 | 4,462 |
Fourth year | 148 | 5,000 | 4,203 |
Fifth year and thereafter | 148 | 5,551 | 599 |
Total | $ 23,554 | $ 48,630 | $ 32,456 |
Related Parties Transactions (D
Related Parties Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Parties Transactions (Details) [Line Items] | ||
Acquired services | $ 6,990 | $ 5,615 |
Other receivables balances due parties | 8,519 | 3,380 |
Trade payables balances due parties | 124 | 708 |
Controlling Shareholder [Member] | ||
Related Parties Transactions (Details) [Line Items] | ||
Acquired services | $ 3,088 | $ 2,639 |
Leases (Details)
Leases (Details) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2021 | Jul. 31, 2020 | Dec. 31, 2022 | |
Disclosure Of Leases Text Block Abstract | |||
Additional lease years | 10 years | ||
Leases with durations | 12 months | ||
Terminate lease, term | terminate the lease after a 4-year term following a 12-month notice in advance, and an option to renew the lease to an additional 5-year term | ||
Lease periods expiring | lease periods expiring between 2023 and 2034 | ||
Expiry dates and renewal options, description | expiry dates varying between 2023 and 2024, with renewal options varying between 2023 and 2029 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments for lease liabilities $ in Thousands | Dec. 31, 2022 USD ($) |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments for Lease Liabilities [Abstract] | |
Total undiscounted cash flows | $ 34,692 |
Less imputed interest | (5,819) |
Present value of lease liabilities | 28,873 |
2023 [Member] | |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments for Lease Liabilities [Abstract] | |
Undiscounted future lease payments | 5,370 |
2024 [Member] | |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments for Lease Liabilities [Abstract] | |
Undiscounted future lease payments | 4,344 |
2025 [Member] | |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments for Lease Liabilities [Abstract] | |
Undiscounted future lease payments | 3,309 |
2026 [Member] | |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments for Lease Liabilities [Abstract] | |
Undiscounted future lease payments | 2,447 |
2027 [Member] | |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments for Lease Liabilities [Abstract] | |
Undiscounted future lease payments | 1,964 |
2028 and thereafter [Member] | |
Schedule of Maturity Analysis of Undiscounted Future Lease Payments for Lease Liabilities [Abstract] | |
Undiscounted future lease payments | $ 17,258 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of lease information - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Lease Information [Abstract] | ||
Expenses relating to operating lease costs | $ 1,930 | $ 2,889 |
Expenses relating to short-term leases | 109 | 57 |
Expenses relating to variable lease payments | 2,753 | 2,928 |
Total cash outflow for leases | $ 4,792 | $ 5,874 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of weighted average remaining lease terms | Dec. 31, 2022 |
Schedule of Weighted Average Remaining Lease Terms [Abstract] | |
Weighted average remaining lease term (years) | 12 years 4 months 24 days |
Weighted average discount rate | 2.96% |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of right-of-use assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cost [Member] | ||
Cost: | ||
Balance as of beginning | $ 36,746 | $ 31,846 |
Additions during the year: | ||
New leases | 6,349 | 4,434 |
Modification of leases | 678 | |
Adjustments for indexation | 1,042 | 289 |
Adjustments arising from translating financial statements of foreign operations | (1,221) | 1,940 |
Disposals during the year: | ||
Acquisition of subsidiaries | 2,754 | 1,129 |
Termination of leases | (1,025) | (2,892) |
Balance as of ending | 45,323 | 36,746 |
Accumulated depreciation [Member] | ||
Cost: | ||
Balance as of beginning | 13,466 | 8,483 |
Additions during the year: | ||
Depreciation | 4,320 | 4,987 |
Adjustments arising from translating financial statements of foreign operations | 694 | 1,667 |
Disposals during the year: | ||
Depreciated cost at December 31 | 27,536 | 23,280 |
Disposals during the year: | ||
Termination of leases | (693) | (1,671) |
Balance as of ending | 17,787 | 13,466 |
Buildings [Member] | Cost [Member] | ||
Cost: | ||
Balance as of beginning | 33,241 | 28,563 |
Additions during the year: | ||
New leases | 4,881 | 4,199 |
Modification of leases | 589 | |
Adjustments for indexation | 947 | 186 |
Adjustments arising from translating financial statements of foreign operations | (1,228) | 1,781 |
Disposals during the year: | ||
Acquisition of subsidiaries | 2,714 | 1,129 |
Termination of leases | (692) | (2,617) |
Balance as of ending | 40,452 | 33,241 |
Buildings [Member] | Accumulated depreciation [Member] | ||
Cost: | ||
Balance as of beginning | 11,943 | 7,432 |
Additions during the year: | ||
Depreciation | 3,151 | 4,514 |
Adjustments arising from translating financial statements of foreign operations | 665 | 1,510 |
Disposals during the year: | ||
Depreciated cost at December 31 | 25,202 | 21,296 |
Disposals during the year: | ||
Termination of leases | (509) | (1,511) |
Balance as of ending | 15,250 | 11,945 |
Motor vehicles [Member] | Cost [Member] | ||
Cost: | ||
Balance as of beginning | 3,505 | 3,283 |
Additions during the year: | ||
New leases | 1,468 | 235 |
Modification of leases | 89 | |
Adjustments for indexation | 95 | 103 |
Adjustments arising from translating financial statements of foreign operations | 7 | 159 |
Disposals during the year: | ||
Acquisition of subsidiaries | 40 | |
Termination of leases | (333) | (275) |
Balance as of ending | 4,871 | 3,505 |
Motor vehicles [Member] | Accumulated depreciation [Member] | ||
Cost: | ||
Balance as of beginning | 1,523 | 1,051 |
Additions during the year: | ||
Depreciation | 1,169 | 473 |
Adjustments arising from translating financial statements of foreign operations | 29 | 157 |
Disposals during the year: | ||
Depreciated cost at December 31 | 2,334 | 1,984 |
Disposals during the year: | ||
Termination of leases | (184) | (160) |
Balance as of ending | $ 2,537 | $ 1,521 |
Share Based Payments (Details)
Share Based Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 07, 2021 | |
Share Based Payments (Details) [Line Items] | |||
Purchase of shares (in Shares) | 4,028 | ||
Stock Option Plans of the Company [Member] | |||
Share Based Payments (Details) [Line Items] | |||
Reserved ordinary shares for issuance (in Shares) | 2,750,000 | ||
Aggregate ordinary shares available for future grants (in Shares) | 952,500 | ||
Option grant is exercisable | 10 years | ||
Expected dividend assumption | $ 0 | ||
Options to purchase its shares (in Shares) | 80,000 | ||
Total intrinsic value of options exercised | 344 | $ 628 | |
Unrecognized compensation cost related to non-vested options | $ 112 | ||
Stock Option Plan of Comm-IT Solutions [Member] | |||
Share Based Payments (Details) [Line Items] | |||
Options to purchase its shares (in Shares) | 4,028 | ||
Unrecognized compensation cost related to non-vested options | $ 2,885 | ||
Description of exercise price range | $0.28-$1,878 | ||
Options have fully vested upon their grant (in Shares) | 827 | ||
Weighted average period | 1 year 1 month 17 days | ||
Cost of share-based payment [Member] | |||
Share Based Payments (Details) [Line Items] | |||
Share-based payment expense related to employee stock options | $ 2,079 | $ 956 | |
Bottom of range [Member] | Stock Option Plans of the Company [Member] | |||
Share Based Payments (Details) [Line Items] | |||
Options vest | 3 years | ||
Top of range [Member] | Stock Option Plans of the Company [Member] | |||
Share Based Payments (Details) [Line Items] | |||
Options vest | 4 years |
Share Based Payments (Details)
Share Based Payments (Details) - Schedule of fair value of the options granted using the Binomial model | 12 Months Ended | |
Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Schedule of Fair Value of the Options Granted Using the Binomial Model [Abstract] | ||
Share price (in Dollars per share) | $ 2,110 | $ 16.85 |
Contractual life | 8 years | 10 years |
Expected exercise factor | 1.5 | 1.5 |
Dividend yield | 0% | 0% |
Expected volatility (weighted average) | 41% | 35.10% |
Fair value of option at the grant date (in Dollars per share) | $ 16.85 | |
Bottom of range [Member] | ||
Schedule of Fair Value of the Options Granted Using the Binomial Model [Abstract] | ||
Risk-free interest rate | 3.28% | 0.50% |
Fair value of option at the grant date (in Dollars per share) | $ 1,078 | |
Top of range [Member] | ||
Schedule of Fair Value of the Options Granted Using the Binomial Model [Abstract] | ||
Risk-free interest rate | 3.65% | 1.30% |
Fair value of option at the grant date (in Dollars per share) | $ 2,126 |
Share Based Payments (Details_2
Share Based Payments (Details) - Schedule of employee option activity $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
Two Thousand Seven Plan [Member] | |
Schedule of Employee Option Activity [Abstract] | |
Number of options, Outstanding Beginning | 66,250 |
Weighted average exercise price, Outstanding Beginning | $ 0.45 |
Weighted average remaining contractual term, Outstanding Beginning | 7 years 11 months 15 days |
Aggregate intrinsic value, Outstanding Beginning | $ | $ 1,360 |
Number of options, Exercised | (20,000) |
Weighted average exercise price, Exercised | |
Number of options, Forfeited | (20,000) |
Weighted average exercise price, Forfeited | |
Number of options, Outstanding Ending | 26,250 |
Weighted average exercise price, Outstanding Ending | $ 0.91 |
Weighted average remaining contractual term, Outstanding Ending | 5 years 11 months 12 days |
Aggregate intrinsic value, Outstanding Ending | $ | $ 397 |
Number of options, Exercisable | 6,250 |
Weighted average exercise price, Exercisable | $ 3.81 |
Weighted average remaining contractual term, Exercisable | 7 months 6 days |
Aggregate intrinsic value, Exercisable | $ | $ 76 |
Comm-IT Solutions 2022 Plan [Member] | |
Schedule of Employee Option Activity [Abstract] | |
Number of options, Outstanding Beginning | |
Weighted average exercise price, Outstanding Beginning | |
Weighted average remaining contractual term, Outstanding Beginning | |
Aggregate intrinsic value, Outstanding Beginning | $ | |
Number of options, Granted | 4,028 |
Weighted average exercise price, Granted | $ 264.67 |
Number of options, Outstanding Ending | 4,028 |
Weighted average exercise price, Outstanding Ending | $ 264.67 |
Weighted average remaining contractual term, Outstanding Ending | 7 years 11 months 8 days |
Aggregate intrinsic value, Outstanding Ending | $ | $ 7,499 |
Number of options, Exercisable | 827 |
Weighted average exercise price, Exercisable | $ 0.28 |
Weighted average remaining contractual term, Exercisable | 7 years 11 months 1 day |
Aggregate intrinsic value, Exercisable | $ | $ 1,839 |
Share Based Payments (Details_3
Share Based Payments (Details) - Schedule of options outstanding | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Zero [Member] | |
Schedule of Options Outstanding [Abstract] | |
Options outstanding, Exercise price | 20,000 |
Weighted average remaining contractual life, Exercise price | 7 years 7 months 13 days |
Options exercisable, Exercise price (in Shares) | shares | |
Weighted average exercise price of exercisable options, Exercise price (in Dollars per share) | $ / shares | |
3.81 [Member] | |
Schedule of Options Outstanding [Abstract] | |
Options outstanding, Exercise price | 6,250 |
Weighted average remaining contractual life, Exercise price | 7 months 6 days |
Options exercisable, Exercise price (in Shares) | shares | 6,250 |
Weighted average exercise price of exercisable options, Exercise price (in Dollars per share) | $ / shares | $ 3.81 |
Stock Option Plans of the Company [Member] | |
Schedule of Options Outstanding [Abstract] | |
Options outstanding, Exercise price | 26,250 |
Weighted average remaining contractual life, Exercise price | 5 years 11 months 26 days |
Options exercisable, Exercise price (in Shares) | shares | 6,250 |
Weighted average exercise price of exercisable options, Exercise price (in Dollars per share) | $ / shares | $ 3.81 |
0.28 [Member] | |
Schedule of Options Outstanding [Abstract] | |
Options outstanding, Exercise price | 3,238 |
Weighted average remaining contractual life, Exercise price | 7 years 11 months 1 day |
Options exercisable, Exercise price (in Shares) | shares | 827 |
Weighted average exercise price of exercisable options, Exercise price (in Dollars per share) | $ / shares | $ 0.28 |
469 [Member] | |
Schedule of Options Outstanding [Abstract] | |
Options outstanding, Exercise price | 297 |
Weighted average remaining contractual life, Exercise price | 7 years 11 months 26 days |
Options exercisable, Exercise price (in Shares) | shares | |
Weighted average exercise price of exercisable options, Exercise price (in Dollars per share) | $ / shares | |
1,878 [Member] | |
Schedule of Options Outstanding [Abstract] | |
Options outstanding, Exercise price | 493 |
Weighted average remaining contractual life, Exercise price | 7 years 11 months 26 days |
Options exercisable, Exercise price (in Shares) | shares | |
Weighted average exercise price of exercisable options, Exercise price (in Dollars per share) | $ / shares | |
Stock Option Plan of Comm-IT Solutions [Member] | |
Schedule of Options Outstanding [Abstract] | |
Options outstanding, Exercise price | 4,028 |
Weighted average remaining contractual life, Exercise price | 7 years 11 months 8 days |
Options exercisable, Exercise price (in Shares) | shares | 827 |
Weighted average exercise price of exercisable options, Exercise price (in Dollars per share) | $ / shares | $ 0.28 |
Share Based Payments (Details_4
Share Based Payments (Details) - Schedule of share-based payment expense related to employee stock option - Cost of share-based payment [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Share-Based Payment Expense Related to Employee Stock Option [Abstract] | ||
Selling and marketing expenses | $ (56) | $ 956 |
General and administrative expenses | 2,135 | |
Total | $ 2,079 | $ 956 |
Employee Benefit Liabilities (D
Employee Benefit Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of information about defined benefit plans [abstract] | ||
Severance expenses | $ 7,078 | $ 5,267 |
Annual compensation percentage | 100% | |
Employee contributions percentage | 3% |
Employee Benefit Liabilities _2
Employee Benefit Liabilities (Details) - Schedule of defined benefit plans - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
Schedule Of Defined Benefit Plans [Abstract] | |||
Defined benefit obligation | $ 2,476 | $ 4,551 | $ 5,545 |
Fair value of plan assets | (1,575) | (3,646) | (4,673) |
Net defined benefit liability | $ 901 | $ 905 | $ 872 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Jul. 31, 2021 USD ($) | Sep. 30, 2016 USD ($) | Sep. 30, 2016 ILS (₪) | |
Commitments and Contingencies (Details) [Line Items] | ||||
Bank deposits | $ 31 | |||
Won damages | $ 1,600 | $ 2,400 | ||
Filed lawsuit seeking damages (in New Shekels) | ₪ | ₪ 34,106 | |||
Customers [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Lease cost | 2,053 | |||
Customer [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Lease cost | $ 912 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 09, 2023 | Aug. 11, 2022 | Mar. 02, 2022 | Aug. 12, 2021 | Mar. 08, 2021 | Aug. 09, 2017 |
Disclosure Of Reserves Within Equity Text Block Abstract | ||||||
Dividend distributed | 75% | |||||
Dividend distribution per share | $ 0.3 | $ 0.29 | $ 0.216 | $ 0.23 | $ 0.21 | |
Dividend distribution | $ 14,728 | $ 14,237 | $ 10,612 | $ 11,480 | $ 10,297 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of accumulated other comprehensive income (loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Accumulated Other Comprehensive Incomeloss [Abstract] | ||
Accumulated foreign currency translation adjustments | $ (6,585) | $ 9,238 |
Accumulated unrealized gain on derivative instruments, net | 26 | 26 |
Total other comprehensive income (loss) | $ (6,559) | $ 9,264 |
Income Tax (Details)
Income Tax (Details) | 1 Months Ended | 12 Months Ended | ||||
Jan. 01, 2017 | Nov. 30, 2022 USD ($) | Nov. 30, 2022 ILS (₪) | Dec. 31, 2021 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 | |
Income Tax (Details) [Line Items] | ||||||
Taxable income percentage | 23% | 23% | ||||
Preferred tax rate percentage | 6% | 12% | ||||
Tax rate percentage | 7.50% | 12% | ||||
Lease percentage | 25% | 90% | ||||
Total accumulated tax-exempt earnings amount | $ 7,100,000 | ₪ 25,022 | ||||
Tax expenses | $ 711,000 | ₪ 2,502 | ||||
Cash and cash equivalents (in Dollars) | $ 28,950,000 | |||||
Operating loss carryforwards amount (in Dollars) | 10,150,000 | |||||
England [Member] | ||||||
Income Tax (Details) [Line Items] | ||||||
Tax loss carryforwards (in Dollars) | 3,536,000 | |||||
U.S [Member] | ||||||
Income Tax (Details) [Line Items] | ||||||
Tax loss carryforwards (in Dollars) | 7,741,000 | |||||
Formula Telecom Solutions, Ltd. [Member] | ||||||
Income Tax (Details) [Line Items] | ||||||
Operating loss carryforwards amount (in Dollars) | $ 8,959,000 | |||||
SPTE [Member] | ||||||
Income Tax (Details) [Line Items] | ||||||
Preferred tax rate percentage | 6% | |||||
Tax rate percentage | 6% | |||||
Top of range [Member] | ||||||
Income Tax (Details) [Line Items] | ||||||
Preferred tax rate percentage | 16% | |||||
Bottom of range [Member] | ||||||
Income Tax (Details) [Line Items] | ||||||
(in Dollars) | $ 6 |
Income Tax (Details) - Schedule
Income Tax (Details) - Schedule of presentation in the consolidated statements of financial position - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
Schedule of presentation in the consolidated statements of financial position [Abstract] | |||
Deferred taxes assets | $ 3,618 | $ 7,993 | $ 6,235 |
Deferred tax liabilities | (10,686) | (17,945) | (17,484) |
Total | $ (7,068) | $ (9,952) | $ (11,249) |
Income Tax (Details) - Schedu_2
Income Tax (Details) - Schedule of composition of deferred taxes - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of composition of deferred taxes [Abstract] | |||
Net operating losses carried forward | $ 168 | $ 349 | $ 312 |
Intangibles, fixed asset, lease liabilities and right of use assets | (12,395) | (11,929) | (12,177) |
Reserves and allowances | 982 | 4,512 | 1,913 |
Total | $ (11,249) | $ (7,068) | $ (9,952) |
Income Tax (Details) - Schedu_3
Income Tax (Details) - Schedule of income tax - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of income tax [Abstract] | ||
Domestic | $ 11,368 | $ 7,847 |
Foreign | 6,304 | 6,123 |
Total | 17,672 | 13,970 |
Domestic | (1,318) | (1,149) |
Foreign | (5,216) | (2,543) |
Total | (6,534) | (3,692) |
Taxes on income | $ 11,138 | $ 10,278 |
Income Tax (Details) - Schedu_4
Income Tax (Details) - Schedule of theoretical tax expense - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of theoretical tax expense [Abstract] | ||
Income before income taxes, as per the statement of operations | $ 57,417 | $ 45,617 |
Statutory tax rate in Israel | 23% | 23% |
Tax computed at the statutory tax rate | $ 13,205 | $ 10,494 |
Tax adjustment in respect of different tax rates | (1,756) | 283 |
Deferred taxes on losses for which deferred taxes were not created | (511) | (80) |
Tax-deductible costs, not included in the accounting costs | (2,680) | (1,041) |
Non-deductible expenses and tax expenses in respect of prior years, net | 2,670 | 1,001 |
Uncertain tax positions and other | 210 | (379) |
Taxes on income | $ 11,138 | $ 10,278 |
Revenue Recognition (Details)
Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue Recognition [Abstract] | |
Aggregate amount | $ 65,700,000 |
Percentage of performance obligations | 58% |
Deferred revenues | $ 10,771 |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of deferred revenues from contracts with customers - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
Schedule Of Deferred Revenues From Contracts With Customers Abstract | ||||
Trade receivables (net of allowance for credit losses of $3,967, $5,071 and $5,416 at January 1, 2021, December 31, 2021 and 2022, respectively) | $ 118,126 | $ 116,975 | $ 91,986 | |
Unbilled receivables | 26,114 | 19,614 | 14,842 | |
Contract assets | 4,240 | 5,482 | 4,231 | |
Long-term unbilled receivables | [1] | 2,548 | ||
Long-term trade receivables | [1] | 735 | 1,318 | 1,410 |
Deferred revenues (short-term contract liabilities) | $ 9,808 | $ 10,771 | $ 8,793 | |
[1]Included in Other long-term receivables in the consolidated statements of financial position . |
Revenue Recognition (Details)_2
Revenue Recognition (Details) - Schedule of deferred revenues from contracts with customers (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
Schedule Of Deferred Revenues From Contracts With Customers Abstract | |||
Net of allowance for credit losses | $ 5,416 | $ 5,071 | $ 3,967 |
Revenue Recognition (Details)_3
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | $ 118,126 | $ 116,975 |
Neither past due nor impaired [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | 67,793 | 66,316 |
Up to 30 days [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | 24,150 | 27,776 |
31-60 days [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | 16,869 | 13,658 |
61-90 days [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | 12,863 | 11,454 |
91-120 days [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | 4,125 | 5,939 |
Over 121 days [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | 13,311 | 10,391 |
Total [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | 139,111 | 135,534 |
Unpaid deferred revenues [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | (15,569) | (13,488) |
Allowance for credit losses [Member] | ||
Revenue Recognition (Details) - Schedule of past due but not impaired trade receivables [Line Items] | ||
Total trade receivables, net | $ (5,416) | $ (5,071) |
Revenue Recognition (Details)_4
Revenue Recognition (Details) - Schedule of revenue by timing of revenue recognition - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Revenue By Timing Of Revenue Recognition Abstract | ||
Products and services transferred over time | $ 533,862 | $ 449,391 |
Products transferred at a point in time | 32,930 | 30,934 |
Total | $ 566,792 | $ 480,325 |
Selected Statements of Income_3
Selected Statements of Income Data (Details) - Schedule of research and development costs, net - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Research and Development Costs, Net [Abstract] | ||
Total costs | $ 13,149 | $ 12,188 |
Less - capitalized software costs | (3,059) | (3,193) |
Research and development, net | $ 10,090 | $ 8,995 |
Selected Statements of Income_4
Selected Statements of Income Data (Details) - Schedule of selling and marketing expenses - Selling and marketing expenses [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Selected Statements of Income Data (Details) - Schedule of selling and marketing expenses [Line Items] | ||
Salary and related expenses | $ 33,474 | $ 26,100 |
Advertising expenses | 2,676 | 2,522 |
Cost of share-based payment | (56) | 956 |
Others | 10,763 | 8,569 |
Total selling and marketing expenses | $ 46,857 | $ 38,147 |
Selected Statements of Income_5
Selected Statements of Income Data (Details) - Schedule of general and administrative expenses - General and administrative expenses [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Selected Statements of Income Data (Details) - Schedule of general and administrative expenses [Line Items] | ||
Salary and related expenses | $ 21,492 | $ 24,072 |
Subcontractors | 5,335 | 3,842 |
Cost of share-based payment | 2,135 | |
Others | 8,590 | 3,308 |
Total general and administrative expenses | $ 37,552 | $ 31,222 |
Selected Statements of Income_6
Selected Statements of Income Data (Details) - Schedule of financial income and expenses - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financial expenses: | ||
Financial expenses related to liabilities in respect of business combinations | $ 744 | $ 2,817 |
Interest expenses on loans and borrowings | 1,743 | 615 |
Interest expenses attributed to leases | 691 | 719 |
Bank charges, negative foreign exchange differences and other financial expenses | 2,559 | 2,468 |
Total financial expenses | 5,737 | 6,619 |
Financial income: | ||
Interest income from deposits, positive foreign exchange differences and other financial income | 1,392 | 113 |
Total Financial income | 1,392 | 113 |
Financial expenses, net | $ 4,345 | $ 6,506 |
Selected Statements of Income_7
Selected Statements of Income Data (Details) - Schedule of computation of basic and diluted net earnings per share - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Computation Of Basic And Diluted Net Earnings Per Share Abstract | ||
Net income attributable to Magic shareholders (in Dollars) | $ 40,470 | $ 29,767 |
Basic earnings per share - weighted average shares outstanding | 49,089,044 | 49,055,082 |
Effect of dilutive securities | 42,267 | 44,972 |
Diluted earnings per share – adjusted weighted average shares outstanding | 49,131,311 | 49,100,054 |
Basic and diluted net earnings per share (in Dollars per share) | $ 0.82 | $ 0.61 |
Operating segments (Details)
Operating segments (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IT professional services [Member] | ||
Operating segments (Details) [Line Items] | ||
Company revenues accounted | 15% | 14% |
Operating segments (Details) -
Operating segments (Details) - Schedule of reported segment results of operation - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating segments (Details) - Schedule of reported segment results of operation [Line Items] | ||
Total revenues | $ 566,792 | $ 480,325 |
Expenses | 505,030 | 428,202 |
Operating income (loss) | 61,762 | 52,123 |
Depreciation and amortization | 19,795 | 19,837 |
Software services [Member] | ||
Operating segments (Details) - Schedule of reported segment results of operation [Line Items] | ||
Total revenues | 99,374 | 95,589 |
Expenses | 72,115 | 74,863 |
Operating income (loss) | 27,259 | 20,726 |
Depreciation and amortization | 10,321 | 10,619 |
IT professional services [Member] | ||
Operating segments (Details) - Schedule of reported segment results of operation [Line Items] | ||
Total revenues | 467,418 | 384,736 |
Expenses | 427,446 | 347,712 |
Operating income (loss) | 39,972 | 37,024 |
Depreciation and amortization | 9,102 | 8,846 |
Unallocated expense [Member] | ||
Operating segments (Details) - Schedule of reported segment results of operation [Line Items] | ||
Total revenues | ||
Expenses | 5,469 | 5,627 |
Operating income (loss) | (5,469) | (5,627) |
Depreciation and amortization | $ 372 | $ 372 |
Operating segments (Details) _2
Operating segments (Details) - Schedule of long-lived assets classified according to geographical destination - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating segments (Details) - Schedule of long-lived assets classified according to geographical destination [Line Items] | ||
Total revenues | $ 566,792 | $ 480,325 |
United States [Member] | ||
Operating segments (Details) - Schedule of long-lived assets classified according to geographical destination [Line Items] | ||
Total revenues | 308,485 | 254,342 |
Israel [Member] | ||
Operating segments (Details) - Schedule of long-lived assets classified according to geographical destination [Line Items] | ||
Total revenues | 205,258 | 180,462 |
Europe [Member] | ||
Operating segments (Details) - Schedule of long-lived assets classified according to geographical destination [Line Items] | ||
Total revenues | 39,247 | 30,085 |
Japan [Member] | ||
Operating segments (Details) - Schedule of long-lived assets classified according to geographical destination [Line Items] | ||
Total revenues | 10,121 | 11,443 |
Other [Member] | ||
Operating segments (Details) - Schedule of long-lived assets classified according to geographical destination [Line Items] | ||
Total revenues | $ 3,681 | $ 3,993 |
Operating segments (Details) _3
Operating segments (Details) - Schedule of long-lived assets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
Operating segments (Details) - Schedule of long-lived assets [Line Items] | |||
Total long-lived assets | $ 246,630 | $ 227,345 | $ 218,437 |
UNITED STATES | |||
Operating segments (Details) - Schedule of long-lived assets [Line Items] | |||
Total long-lived assets | 82,325 | 76,369 | 74,577 |
ISRAEL | |||
Operating segments (Details) - Schedule of long-lived assets [Line Items] | |||
Total long-lived assets | 148,819 | 138,071 | 129,248 |
Europe [Member] | |||
Operating segments (Details) - Schedule of long-lived assets [Line Items] | |||
Total long-lived assets | 7,885 | 4,423 | 5,115 |
JAPAN | |||
Operating segments (Details) - Schedule of long-lived assets [Line Items] | |||
Total long-lived assets | 4,696 | 5,543 | 6,428 |
Other [Member] | |||
Operating segments (Details) - Schedule of long-lived assets [Line Items] | |||
Total long-lived assets | $ 2,905 | $ 2,939 | $ 3,069 |
Transition to IFRS (Details)
Transition to IFRS (Details) - USD ($) | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2022 |
Transition to IFRS (Details) [Line Items] | |||
Net liability | $ 4,673 | $ 3,646 | |
Short -term | $ 15,454 | 14,611 | |
Long-term | 13,880 | 9,315 | |
Redeemable non-controlling interests [Member] | |||
Transition to IFRS (Details) [Line Items] | |||
Short -term | 23,197 | 14,611 | |
Long-term | $ 6,137 | $ 9,315 |
Transition to IFRS (Details) -
Transition to IFRS (Details) - Schedule of reconciliation of statements of financial position - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 83,062 | $ 88,090 | $ 88,127 | $ 88,127 |
Short-term deposits | 3,904 | 5,586 | 289 | |
Trade receivables, net | 118,126 | 116,975 | 91,986 | |
Unbilled receivables and contract assets | 30,354 | 25,096 | 19,073 | |
Other accounts receivable and prepaid expenses | 13,652 | 11,027 | 11,751 | |
Total current assets | 249,098 | 246,774 | 211,226 | |
LONG-TERM ASSETS: | ||||
Severance pay fund | ||||
Deferred taxes | 7,993 | 6,235 | ||
Right-of-use assets | 27,536 | 23,280 | 23,363 | |
Other accounts receivable | 5,795 | 5,165 | 5,507 | |
Property, plants and equipment, net | 8,338 | 5,872 | 5,988 | |
Intangible assets, net | 52,057 | 51,390 | 53,404 | |
Goodwill | 158,699 | 146,803 | 135,682 | |
Total long-term assets | 256,043 | 240,503 | 230,179 | |
Total assets | 505,141 | 487,277 | 441,405 | |
CURRENT LIABILITIES: | ||||
Short term debt | 20,755 | 17,108 | 11,598 | |
Trade payables | 27,598 | 24,711 | 14,250 | |
Accrued expenses and other accounts payable | 46,842 | 45,091 | 41,777 | |
Current maturities of operating lease liabilities | 4,591 | 3,267 | 3,792 | |
Liabilities in respect of business combinations | 19,287 | 6,635 | 4,998 | |
Redeemable non-controlling interests | 27,172 | 23,197 | 14,611 | |
Deferred revenue and customer advances | 9,808 | 10,771 | 8,793 | |
Total current liabilities | 156,053 | 130,780 | 99,819 | |
LONG-TERM LIABILITIES: | ||||
Long-term debt | 30,412 | 20,155 | 13,352 | |
Long-term operating lease liabilities | 24,282 | 21,907 | 21,230 | |
Liability in respect of business combinations | 5,376 | 13,892 | 10,926 | |
Deferred taxes | 17,945 | 17,484 | ||
Redeemable non-controlling interests | 1,120 | 6,137 | 9,315 | |
Accrued severance pay, net | 901 | 905 | 872 | |
Total long-term liabilities | 72,777 | 80,941 | 73,179 | |
REDEEMABLE NON-CONTROLLING INTEREST | ||||
EQUITY | ||||
Share capital | 1,166 | 1,165 | 1,164 | |
Additional paid-in capital | 182,031 | 184,047 | 188,415 | |
Accumulated other comprehensive loss | (6,559) | 9,264 | 7,437 | |
Accumulated earnings | 86,289 | 70,660 | 62,673 | |
Total equity attributable to company shareholders’ | 262,927 | 265,136 | 259,689 | |
Non-controlling interests | 13,384 | 10,420 | 8,718 | |
Total equity | 276,311 | 275,556 | 268,407 | $ 268,407 |
Total liabilities, redeemable non-controlling interest and equity | $ 505,141 | 487,277 | 441,405 | |
U.S. GAAP [Member] | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 88,090 | 88,127 | ||
Short-term deposits | 5,586 | 289 | ||
Trade receivables, net | 116,975 | 91,986 | ||
Unbilled receivables and contract assets | 25,096 | 19,073 | ||
Other accounts receivable and prepaid expenses | 11,032 | 11,751 | ||
Total current assets | 246,779 | 211,226 | ||
LONG-TERM ASSETS: | ||||
Severance pay fund | 3,646 | 4,673 | ||
Deferred taxes | 8,091 | 6,397 | ||
Right-of-use assets | 24,299 | 24,509 | ||
Other accounts receivable | 5,165 | 5,507 | ||
Property, plants and equipment, net | 5,872 | 5,988 | ||
Intangible assets, net | 51,390 | 53,404 | ||
Goodwill | 146,803 | 135,682 | ||
Total long-term assets | 245,266 | 236,160 | ||
Total assets | 492,045 | 447,386 | ||
CURRENT LIABILITIES: | ||||
Short term debt | 17,032 | 11,529 | ||
Trade payables | 24,711 | 14,250 | ||
Accrued expenses and other accounts payable | 45,173 | 41,846 | ||
Current maturities of operating lease liabilities | 3,943 | 3,413 | ||
Liabilities in respect of business combinations | 6,635 | 4,998 | ||
Redeemable non-controlling interests | ||||
Deferred revenue and customer advances | 10,771 | 8,793 | ||
Total current liabilities | 108,265 | 84,829 | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt | 20,155 | 13,352 | ||
Long-term operating lease liabilities | 20,970 | 21,109 | ||
Liability in respect of business combinations | 13,892 | 10,926 | ||
Deferred taxes | 18,112 | 17,639 | ||
Redeemable non-controlling interests | ||||
Accrued severance pay, net | 4,551 | 5,545 | ||
Total long-term liabilities | 77,680 | 68,571 | ||
REDEEMABLE NON-CONTROLLING INTEREST | 30,432 | 24,980 | ||
EQUITY | ||||
Share capital | 1,165 | 1,164 | ||
Additional paid-in capital | 211,543 | 211,713 | ||
Accumulated other comprehensive loss | 9,294 | 7,835 | ||
Accumulated earnings | 43,246 | 39,720 | ||
Total equity attributable to company shareholders’ | 265,248 | 260,432 | ||
Non-controlling interests | 10,420 | 8,574 | ||
Total equity | 275,668 | 269,006 | ||
Total liabilities, redeemable non-controlling interest and equity | 492,045 | 447,386 | ||
Other GAAP Adjustments and reclassifications [Member] | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | ||||
Short-term deposits | ||||
Trade receivables, net | ||||
Unbilled receivables and contract assets | ||||
Other accounts receivable and prepaid expenses | (5) | |||
Total current assets | (5) | |||
LONG-TERM ASSETS: | ||||
Severance pay fund | (3,646) | (4,673) | ||
Deferred taxes | (98) | (162) | ||
Right-of-use assets | (1,019) | (1,146) | ||
Other accounts receivable | ||||
Property, plants and equipment, net | ||||
Intangible assets, net | ||||
Goodwill | ||||
Total long-term assets | (4,763) | (5,981) | ||
Total assets | (4,768) | (5,981) | ||
CURRENT LIABILITIES: | ||||
Short term debt | 76 | 69 | ||
Trade payables | ||||
Accrued expenses and other accounts payable | (82) | (69) | ||
Current maturities of operating lease liabilities | (676) | 379 | ||
Liabilities in respect of business combinations | ||||
Redeemable non-controlling interests | 23,197 | 14,611 | ||
Deferred revenue and customer advances | ||||
Total current liabilities | 22,515 | 14,990 | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt | ||||
Long-term operating lease liabilities | 937 | 121 | ||
Liability in respect of business combinations | ||||
Deferred taxes | (167) | (155) | ||
Redeemable non-controlling interests | 6,137 | 9,315 | ||
Accrued severance pay, net | (3,646) | (4,673) | ||
Total long-term liabilities | 3,261 | (4,608) | ||
REDEEMABLE NON-CONTROLLING INTEREST | (30,432) | (24,980) | ||
EQUITY | ||||
Share capital | ||||
Additional paid-in capital | (27,496) | (23,298) | ||
Accumulated other comprehensive loss | (30) | (398) | ||
Accumulated earnings | 27,414 | 22,953 | ||
Total equity attributable to company shareholders’ | (112) | (743) | ||
Non-controlling interests | 143 | |||
Total equity | (112) | (600) | ||
Total liabilities, redeemable non-controlling interest and equity | $ (4,768) | $ (5,981) |
Transition to IFRS (Details) _2
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss [Line Items] | ||
Software services | $ 32,930 | $ 30,934 |
Maintenance and technical support | 34,762 | 36,149 |
Consulting services | 499,100 | 413,242 |
Total revenues | 566,792 | 480,325 |
Software services | 10,701 | 12,182 |
Maintenance and technical support | 3,494 | 4,144 |
Consulting services | 397,242 | 331,005 |
Total cost of revenues | 411,437 | 347,331 |
Gross profit | 155,355 | 132,994 |
Research and development expenses, net | 10,090 | 8,995 |
Selling, marketing expenses | 46,857 | 38,147 |
General and administrative expenses | 37,552 | 31,222 |
Change in valuation of contingent consideration related to acquisitions | (906) | 2,507 |
Operating income | 61,762 | 52,123 |
Financial expenses | (4,993) | (3,802) |
Financial income | 1,392 | 113 |
Increase in valuation of consideration related to acquisitions | (744) | (2,817) |
Income before taxes on income | 57,417 | 45,617 |
Taxes on income | 11,138 | 10,278 |
Net income | 46,279 | 35,339 |
Non-controlling interests | 5,809 | 5,572 |
Equity holders of the Company | $ 40,470 | $ 29,767 |
Basic and diluted earnings per share (in Dollars per share) | $ 0.61 | |
U.S. GAAP [Member] | ||
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss [Line Items] | ||
Software services | $ 30,934 | |
Maintenance and technical support | 36,149 | |
Consulting services | 413,242 | |
Total revenues | 480,325 | |
Software services | 12,182 | |
Maintenance and technical support | 4,144 | |
Consulting services | 331,005 | |
Total cost of revenues | 347,331 | |
Gross profit | 132,994 | |
Research and development expenses, net | 8,995 | |
Selling, marketing expenses | 38,147 | |
General and administrative expenses | 32,110 | |
Change in valuation of contingent consideration related to acquisitions | 2,507 | |
Operating income | 51,235 | |
Financial expenses | (3,268) | |
Financial income | 113 | |
Increase in valuation of consideration related to acquisitions | (2,817) | |
Income before taxes on income | 45,263 | |
Taxes on income | 10,359 | |
Net income | 34,904 | |
Redeemable non-controlling interests | 3,517 | |
Non-controlling interests | 2,055 | |
Equity holders of the Company | $ 29,332 | |
Basic and diluted earnings per share (in Dollars per share) | $ 0.52 | |
GAAP Adjustments and reclassifications [Member] | ||
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss [Line Items] | ||
Software services | ||
Maintenance and technical support | ||
Consulting services | ||
Total revenues | ||
Software services | ||
Maintenance and technical support | ||
Consulting services | ||
Total cost of revenues | ||
Gross profit | ||
Research and development expenses, net | ||
Selling, marketing expenses | ||
General and administrative expenses | (888) | |
Change in valuation of contingent consideration related to acquisitions | ||
Operating income | 888 | |
Financial expenses | (534) | |
Financial income | ||
Increase in valuation of consideration related to acquisitions | ||
Income before taxes on income | 354 | |
Taxes on income | (81) | |
Net income | 435 | |
Redeemable non-controlling interests | (3,517) | |
Non-controlling interests | 3,517 | |
Equity holders of the Company | $ 435 | |
Basic and diluted earnings per share (in Dollars per share) | $ 0.09 |
Transition to IFRS (Details) _3
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss (Parentheticals) | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss (Parentheticals) [Line Items] | |
Diluted earnings per share (in Dollars per share) | $ 0.61 |
U.S. GAAP [Member] | |
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss (Parentheticals) [Line Items] | |
Diluted earnings per share (in Dollars per share) | 0.52 |
GAAP Adjustments and reclassifications [Member] | |
Transition to IFRS (Details) - Schedule of consolidated statement of profit or loss (Parentheticals) [Line Items] | |
Diluted earnings per share (in Dollars per share) | $ 0.09 |
Transition to IFRS (Details) _4
Transition to IFRS (Details) - Schedule of equity attributable to Magic’s shareholders - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2021 | Dec. 31, 2021 | |
Transition to IFRS (Details) - Schedule of equity attributable to Magic’s shareholders [Line Items] | ||
As reported in the Company’s consolidated financial statements as of | $ 260,432 | $ 265,248 |
Measurement adjustments related to leases | (1,654) | (1,210) |
Measurement adjustments related to redeemable non-controlling interests | 911 | 1,098 |
Transition to IFRS | (743) | (112) |
Accordance with IFRS: | 259,689 | 265,136 |
Share Capital [Member] | ||
Transition to IFRS (Details) - Schedule of equity attributable to Magic’s shareholders [Line Items] | ||
As reported in the Company’s consolidated financial statements as of | 1,164 | 1,165 |
Measurement adjustments related to leases | ||
Measurement adjustments related to redeemable non-controlling interests | ||
Transition to IFRS | ||
Accordance with IFRS: | 1,164 | 1,165 |
Additional paid-in capital [Member] | ||
Transition to IFRS (Details) - Schedule of equity attributable to Magic’s shareholders [Line Items] | ||
As reported in the Company’s consolidated financial statements as of | 211,713 | 211,543 |
Measurement adjustments related to leases | ||
Measurement adjustments related to redeemable non-controlling interests | (23,298) | (27,496) |
Transition to IFRS | (23,298) | (27,496) |
Accordance with IFRS: | 188,415 | 184,047 |
Retained earnings [Member] | ||
Transition to IFRS (Details) - Schedule of equity attributable to Magic’s shareholders [Line Items] | ||
As reported in the Company’s consolidated financial statements as of | 39,720 | 43,246 |
Measurement adjustments related to leases | (1,654) | (1,210) |
Measurement adjustments related to redeemable non-controlling interests | 24,607 | 28,624 |
Transition to IFRS | 22,953 | 27,414 |
Accordance with IFRS: | 62,673 | 70,660 |
Accumulated other comprehensive income (loss) [Member] | ||
Transition to IFRS (Details) - Schedule of equity attributable to Magic’s shareholders [Line Items] | ||
As reported in the Company’s consolidated financial statements as of | 7,835 | 9,294 |
Measurement adjustments related to leases | ||
Measurement adjustments related to redeemable non-controlling interests | (398) | (30) |
Transition to IFRS | (398) | (30) |
Accordance with IFRS: | $ 7,437 | $ 9,264 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | ||
Mar. 27, 2023 | Mar. 09, 2023 | Mar. 31, 2022 | |
Disclosure Of Events After Reporting Period Text Block [Abstract] | |||
Cash dividend | $ 14,728 | ||
Shareholder per share (in Dollars per share) | $ 0.3 | ||
Borrowing cost | $ 20,000 | ||
Annual instalments repaid | $ 6,052 | ||
Interest rate | 3.38% | 2.25% |