Magic Software cuts Q3 revenue view to $129.3M from $142.4M-$143.1M

Non-GAAP operating income is now expected to be approximately $17.1 million in the third quarter of 2023, approximately 13.2% as a percentage of revenue and the same as for the first half of 2023. “During the latter half of the third quarter of 2023, we experienced a substantial and unexpected decline in demand for our software services from several of our important U.S.-based blue-chip customers which, without any advance notification, decided to immediately suspend active time and materials based projects. This reduced demand had a negative impact on our third quarter revenues and will also impact partially our fourth quarter top line”, said Guy Bernstein, Chief Executive Officer of Magic. “As a result, third quarter revenue will be below the low end of the prior guidance range. Despite this unexpected decline in demand, it did not have a material impact on our profitability, and we expect our non-GAAP operating margin for the third quarter to be approximately 13.2%, which mimics such margin for the first half of 2023,” concluded Bernstein.