A Magic Rebound for Software Maker?
August 9, 2010 Alex Woodie
Magic Software has had a tough go of it the last few years. But with its second quarter results, in which it boosted total revenues by a whopping 58 percent, the company could be in the midst of a rebound.
Magic reported total revenues of $21.5 million for the quarter, a $7.9 million boost over the $13.6 million it reported for the second quarter of fiscal 2009. It was the strongest second quarter Magic has had in some time, including the boom years of 2007 and 2008, when the company reported revenues $14.3 million and $16.0 million, respectively.
Profitability also improved two-fold for the Or-Yehuda, Israel, company, as GAAP net income increased from about $1 million to $1.9 million for the most recent quarter. The bigger profits came despite a 9 percent increase in spending. General expenses (including marketing and sales) rose to $6.7 million for the quarter, while R&D spending rose by more than 50 percent to about $400,000 (which is still small for a technology company of this size).
Guy Bernstein, Magic’s chairman who is still acting as chief executive officer since he took the job more than two years ago, says the increased revenue was due to stronger demand for Magic software and services in all regions.
Magic’s primary products today are iBOLT, an application integration platform with strong hooks into IBM‘s i platform, and uniPaaS, a rich Internet application (RIA) framework that can be used for developing on-premise and cloud-based applications. Both products have origins in eDeveloper, Magic’s 4GL development environment.
While Magic reports that demand rose across all regions, it said that sales of uniPaaS and iBOLT did better in the Japanese, French, and German markets, compared to North America, which accounts for half of its revenues. The company also signed five new partnership deals with resellers in Greece, the Netherlands, France, Romania, and Poland.
Wall Street liked the Magic results, and pushed the company’s stock, which is traded on the NASDAQ National Market, up almost 10 percent, to around $2.65. The stock’s 52-week high of $3.11 was reached in March.