Matrix IT Ltd. — Investor Presentation 2025

May 20, 2025

Investor Meeting Financial Statements as at 31.3.25

The information contained in this Investors presentation constitutes a convenience translation. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

Clarifications

• The presentation contains forecasts, estimates and plans of the Company regarding its operations and other information about future events and matters, which constitute forward-looking information, as defined in the Securities Law, 1968, and materialization thereof is uncertain and may be affected by factors that are unforeseeable or beyond the Company's control. Therefore, the Company is uncertain whether its forecasts and/or estimates and/or plans will be realized, in whole or in part, or whether they will be realized differently than expected, inter alia, due to factors beyond its control, changes in market conditions, business and competition environment, as well as materialization of any of the Company's risk factors.
• The presentation includes, inter alia, information from various publications as well as data received from external sources (noted in the presentation), and macroeconomic facts and figures, the contents of which have not been reviewed by the Company independently, including slides relating to analyst ratings, all as known by the Company at the time of preparation of the presentation.
• For the avoidance of doubt, we note that the Company does not undertake to update and/or change the information included in this presentation.
• This presentation was prepared as a summary and for convenience only, and is not intended to be in lieu of a review of the reports publicized by the Company, including its financial statements.
• The information contained in this presentation is subject to that stated in the relevant Company's reports.
• This presentation should not be viewed an offer or invitation to acquire the Company's securities. The information included in the presentation is not a recommendation or opinion to invest in the Company and is not in lieu a potential investor's judgment.

2025 Opens with Record Q1 Results

Q1 2025

Record growth in sales, gross profit, operating profit, EBITDA, net income, net income attributable to shareholders

Sales - 6.4% growth to a record NIS 1.55 billion 11.3% growth after adjusting for sales recognized on a net basis (*)

Gross profit – 9.6% growth to a record NIS 227 million

Operating profit – 13.8% growth to a record NIS 126 million

Net income - 12.8% growth to a record - NIS 80.6 million

Net income attributable to shareholders - 10.1% growth to a record - NIS 75.6 million

EBITDA - 11.5% growth to a record NIS 175.6 million

(*) During the first quarter, the trend from the previous quarters continued, in which there was an increase in revenues from transactions, that, according to IFRS, are recognized on a net basis. This affects the Company's revenue volume, revenue growth rate, and profitability margin. More information later in this presentation. -

• In the Company's assessment, the war has no material impact on its results. Despite the prolongation of the war, the Company's operations were characterized by continued impressive organic growth in sales, profit, and cash flow.
• As of 31.03.25, 120 of the Company's employees have been called up to reserve duty; as of the date of publication of the reports – 215 have been called up.
• Growth in the Company's activity with the defense sector and defense industries in executing projects, provision of services, and selling software infrastructure and products.
• Continued customer investments in cyber-attack defense, as well as the procurement of services and products for recovery from cyber-attacks.
• In most of the market segments in which Matrix operates, we see a clear back to bussiness routine.

Financial Statements 31.03.25

Key data from the statement of profit and loss – Q1/2025, compared to the corresponding quarter Key results (in NIS millions)

	1-3/2025	1-3/2024	%
Sales	1,546,200	1,453,713	6.6%

Key data from the statement of profit and loss – Q1/2025, compared to the corresponding quarter Key corporate results, neutralizing the increase in sales presented on a net basis (in NIS thousands)

	1-3/2025	1-3/2024	%
Sales	1,546,200	1,453,713	6.4%
Adjustments for the increase in sales accounted for on a net basis*	71,067
Adjusted sales	1,617,267	1,453,713	11.3%
Operating profit	125,991	110,678	13.8%
% of sales	7.8%	7.6%

(*) During the first quarter, the trend from the previous quarters continued, in which there was an increase in revenues from transactions, that, according to IFRS, are recognized on a net basis. This affects the Company's revenue volume, revenue growth rate, and profitability margin.

Key data from the statement of profit and loss – Q1 2025, compared to the corresponding quarter Key results (in NIS millions)

	1-3/2025	1-3/2024	%
Sales*	1,546	1,454	6.4%
Gross profit	227	207	9.6%
SG&A	101	96	4.8%
Operating profit	126	111	13.8%
Financing expenses, net	19	17	16.8%
Taxes on income	26	23	14.8%
Net income	81	71	12.8%
Net earnings attributable to Company shareholders	76	69	10.1%
EBITDA**	176	157	11.5%
Gross profit margin	14.7%	14.2%
SG&A margin	6.5%	6.6%
Operating profit margin	8.1%	7.6%
EBITDA margin**	11.4%	10.8%
Net income margin	5.2%	4.9%

(*) Neutralizing the effect of the increase in sales presented on a net basis – 11.3% growth

(**) Earnings before interest, taxes, depreciation, and amortization

Q1 2025 Summary - Key results (in NIS millions)

6.4% sales growth to a record NIS 1.55 billion 11.3% after adjusting for increased sales recognized on a net basis

9.6% growth in gross profit to a record NIS 227.1 million while improving profit margin

13.8% growth in operating profit to a record NIS 126 million while improving its margin

Q1 2025 Summary – Key results (in NIS millions)

Financing expenses, net (in NIS millions) Q1 2025 Q1 2024 6.4 7.6 Interest, commissions, and other (net) Exchange rate differences 0.3 2.5 Accounting finance expenses 12.6 6.4 Total financing expenses (net) 19.3 16.5

12.8% growth in net income to a record NIS 80.5 million while improving its margin

10.1% growth in net income attributable to shareholders to a record NIS 75.6 million while improving its margin

Q1 2024 Q1 2025

4.7% 4.9%

11.5% growth in adjusted EBITDA a record NIS 175.6 million while improving its margin

(*) Earnings before interest, taxes, depreciation, and amortization

Operations in Israel

Breakdown of sales by customer sector*

• Financial
• Hi-Tech
• Industry, Communications & Retail
• Healthcare & Transportation
• Defense
• Other

(*) According to FY 2024 sales

Operations in Israel* Q1 2025

(in NIS millions)

(*) Including immaterial operations in Europe

Operating segments in Israel - Q1/2025(in NIS thousands)

	Sales			Operating profit
	Q1/2025	Q1/2024	%	Q1/2025	Q1/2024	%
Information Technology Solutions and Services, Consulting, and Management in Israel	929,531	839,729	10.7%	70,139	63,327	10.8%
Profit margin (%)				7.5%	7.5%

• Growth across all areas of operations (other than training), with an emphasis on an increase in data activities, cyber, digital and core systems
• Continued growth in the activity with the defense sector and the financial sector
• Mega projects in the IT and engineering sector providing high growth and high visibility over time
• Segmental results were also positively affected by the first-time consolidation of Gav Systems

Operating segments in Israel - Q1/2025(in NIS thousands)

	Sales			Operating profit
	Q1/2025	Q1/2024	%	Q1/2025	Q1/2024	%
Information Technology Solutions and Services, Consulting, and Management in Israel	929,531	839,729	10.7%	70,139	63,327	10.8%
Profit margin (%)				7.5%	7.5%
Cloud and Computing Infrastructures	460,548	437,782	5.2%	35,812	27,630	29.6%
Profit margin (%)				7.8%	6.3%

• Growth in Volumes, with an emphasis on sales, marketing, and integration of IT systems, marketing, implementation, and support of advanced technologies. Continued increase in the volume of EDP cloud transactions, whose revenues are accounted for on a net basis – multi-year engagements generate high visibility going forward
• In the quarter transaction mix with relatively high profitability
• Growth in cloud transactions in Western Europe

Cloud and Computing Infrastructures –

Results neutralizing the increase in the volume of sales presented on a net basis (in NIS thousands)

	1-3/2025	1-3/2024	%
Sales	460,548	437,782	5.2%
Adjustments for the increase in sales accounted for on a net basis	20,715	-
Adjusted sales	481,263	437,782	9.9%
Operating profit	35,812	27,630	29.6%
% of sales	7.4%	6.3%

• Growth in Volumes, with an emphasis on sales, marketing, and integration of IT systems, marketing, implementation, and support of advanced technologies. Continued increase in the volume of EDP cloud transactions, whose revenues are accounted for on a net basis – multi-year engagements generate high visibility going forward
• In the quarter transaction mix with relatively high profitability
• Growth in cloud transactions in Western Europe

Operating segments – Q1/2025 (in NIS thousands)

	Sales			Operating profit
	Q1/2025	Q1/2024	%	Q1/2025	Q1/2024	%
Information Technology Solutions and Services, Consulting, and Management in Israel	929,531	839,729	10.7%	70,139	63,327	10.8%
Profit margin (%)				7.5%	7.5%
Cloud and Computing Infrastructures	460,548	437,782	5.2%	35,812	27,630	29.6%
Profit margin (%)				7.8%	6.3%
Sales, Marketing and Support of Software Products	88,504	97,351	(9.1%)	8,460	7,359	15%
Profit margin (%)				9.6%	7.6%

• Continued focus on selling products with a high ARR component
• Accelerated purchase by costomers of software products cyber-defense, digital acceleration, cloud solutions, data and AI
• The decrease in sales alongside the increase in operating profit and its margin are due to changes in transaction mix

Operating segments – Q1/2025 (in NIS thousands)

	Sales			Operating profit
	Q1/2025	Q1/2024	%	Q1/2025	Q1/2024	%
Information Technology Solutions and Services, Consulting, and Management in Israel	929,531	839,729	10.7%	70,139	63,327	10.8%
Profit margin (%)				7.5%	7.5%
Cloud and Computing Infrastructures	460,548	437,782	5.2%	35,812	27,630	29.6%
Profit margin (%)				7.8%	6.3%
Sales, Marketing and Support of Software Products	88,504	97,351	(9.1%)	8,460	7,359	15%
Profit margin (%)				9.6%	7.6%
IT Solutions and Services, Consulting, and Management in the US	108,839	118,690	(8.3%)	15,105	16,969	(11%)
Profit margin (%)				13.9%	14.3%

• The moderation in the decline of sales and operating profit stems from new engagements that have begun to compensate for the completion of a number of GRC projects last year.
• These new engagements are expected to fully reflect in sales and profit in the coming quarters

IT Solutions and Services, Consulting, and Management in the US

Trend in change in operating profit in the past year (in USD millions)

-2

0

2

4

6

8

• Q1 2025 marks the beginning of stabilization in the operating profit difference, quarter-over-quarter
• In light of new engagements, the Company assesses that in the coming quarters, the stabilization trend will continue and there will be a return to growth

Breakdown of revenues and profit by operating segments in 2025

Financial indexes

Financial indexes (in NIS millions)

	31.03.2025	31.12.2024
Cash and cash equivalents	600	668
Unused credit facilities*	1,226	1,229
Total liquid assets	1,826	1,897

* Of which NIS 300 million are committed credit facilities

Aa3 credit rating from Midroog (rating confirmation - March 2025)

Cash flows from operating activities:

• Positive cash flow in Q1/2025 - NIS 14.7 million, compared to a negative cash flow of NIS 1.8 in the corresponding quarter
• Positive cash flow LTM – approximately NIS 635.7 million, compared to NIS 543.8 million in the corresponding period

Cash flows from operating activities - LTM

Financial indexes (in NIS millions)

	31.03.2025	31.12.2024
Equity	1,169	1,144
% of total balance sheet	25.3%	25.5%
Gross financial debt	848.6	785.1
Net debt – short-term and long-term credit, net of cash and cash equivalents	248.6	116.6
Current ratio	1.1	1.1
Net debt to balance sheet ratio	5.4%	2.6%
Net debt to EBITDA * ratio LTM (adjusted)	0.48	0.23
(*) Earnings before interest, taxes, depreciation, and amortization, and net of the the effect of IFRS 16 - Leases

Financing expenses, Net (in NIS thousands)

Financing expenses, net (in NIS thousands)

	Q1 2025	Q1 2024	Change
Interest, commissions, and other (net)	6,443	7,640	(1,197)
Exchange rate differences	315	2,522	(2,207)
Accounting finance expenses	12,620	6,424	6,196
Total financing expenses (net)	19,378	16,586	2,792

The increase in financing expenses is due entirely to an increase in accounting financing expenses – Mainly, revaluation of Put options held by non-controlling interests in subsidiaries (as a result of improvement in profitability of the subsidiaries) and a decrease in the fair value in a financial asset presented at fair value

Dividend of NIS 56.6 million (89 ag. per share)

Q1/2025 compared to the corresponding period: Growth to record sales, gross profit, operating profit EBITDA, net income, and net earnings attributable to shareholders

Organic growth and growth due to acquisitions, in sales and profits

The Company continues its growth, attributable mainly to organic growth and acquisitions in Israel. We continue to improve the operational efficiency, maintain stability in general expenses and maintain (and even decrease) SG&A expenses in order to maintain the increase in our operating profit margin and net profit margin.

Maintaining growth rates during and after the war

Matrix has been the market leader for 19 years. The visibility provided by mega projects, technological leadership in all significant categories (A1D2C3), alongside the Company's excellent reputation enable us to maintain our growth rates in the market, despite the prolongation of the war.

A return to growth in the US

2024 was characterized by the volatility of the the US financial sector and market in general. We estimate returning to growth in sales and profit in the coming quarters and we will reach approximately USD 20 million in annual operating profit.

Acquisitions

First-time consolidation of Gav as of q1 2025 (and Alacer and Ortec as of the previous quarter). Together with moving forward with the Matrix-Magic merger, we are continuing to examine additional acquisitions that complement our products and services portfolio in Israel and abroad.

IBM Mainframe, Quantum Computing, AI…

Corporate merger of Magic + Matrix

The Merger

• o On March 10, 2025, Matrix entered into an MOU with Magic to negotiate a definitive agreement regarding a merger transaction, pursuant to which, the Company will acquire the entire issued and outstanding share capital of Magic, on a fully diluted basis, by way of a reverse triangular merger. Upon completion of the merger, Magic will become a private subsidiary fully owned by Matrix.
• o As part of the transaction, Magic's shareholders will receive consideration in the form of ordinary shares of the Company, based on exchange ratio derived from valuations of the companies .
• o The transaction is considered a transaction in which the controlling shareholder (Formula) has a personal interest. Accordingly, the Company's Board of Directors appointed an independent committee that was empowered to examine the engagement in the transaction, to negotiate with Magic regarding the terms of the transaction, to approve the transaction, and to formulate recommendations to the Board with regard thereto.
• o The committee is accompanied by the Jeffries LLC international investment banking group, the Herzog Fox Neeman law firm, and the KPMG accounting firm.

The Combined Company Would Be One Of The Largest Listed IT Services Firms By Market Cap

European Listed IT Services			U.S. Listed IT Services
Rank	Company	Market Cap (\$M)	Rank	Company	Market Cap (\$M)
1		\$28,936	1		\$213,814
2		4,958	2		81,672
3		3,656	3		41,330
			4		34,342
4		2,132	5		23,319
5		2,042	6		11,222
6		1,263	7		8,249
7		1,234	8		6,198
			9		3,250
8		1,157	10		2,132
9		951	11		1,528
10		615	12		1,353

Source: S&P Capital IQ as of 03/06/2025.

Note: Matrix and Magic Market Cap based on share price as of 03/06/2025 with a USD / ILS exchange rate of 0.28. Analysis includes firms where IT Services is greater than 50% of both revenue and profit.

Statement of profit and loss

(Based on 2024 annual results, in NIS thousands)

	matrıx Ox	magic®			1-3/2025
	Matrix			Sales*	1,546
		Magic	matrix + magic*	Gross profit	227
Sales	5,579,538	2,043,771	7,623,309	SG&A	101
				Operating profit	126
Gross profit	832,994	581,401	1,414,395	Financing expenses, net	19
				Taxes on income	26
% gross profit	14.9%	28.4%	18.6%	Net income	81
				Net earnings attributable to Company shareholders 76
Operating profit	450,074	226,515	676,589	EBITDA**	176
% operating profit	8.1%	11.1%	8.9%
Net income	288,224	160,155	448,379
% net income	5.2%	7.8%	5.9%

(*) On the basis of simple aggregation of results without offsetting intercompany transactions

The opportunity

• o A quantum leap for Matrix to becoming a global company with a broad geographical spread around the world, especially in the strategic target market – the US.
• o The scope of the merged company's operations places it 10th in "US Listed IT Services Companies" and 4th in "European Listed IT Services Companies" (1)
• o Maximizing value as a result of (cross sell) business synergies; technological and operational synergies of two excellent companies.
• o A significant portion of the merged operations involves complementary companies, particularly in the US.
• o In hot fields of activity, the connection with Magic will result in a significant power multiplier.
• o Expanded offerings and strengthening IP-based activity that is characterized by high margins, strong stickiness, and a significant ARR component.
• o A significant improvement in the profit margins Magic has a gross profit margin above 28% and an operating profit margin of over 11% (and its tax rate is about 4% lower than Matrix's).

The opportunity - cont.

• o A merger with a company with an excellent balance sheet net cash balances, improved balance sheet ratios.
• o The potential to join the TA-35 list (according to their current value, they are in 31st place), with a significant increase in investor base and trade volumes.
• o The attractiveness of the merged company from the perspective of international investors.
• o Unique transaction without financing costs and without accounting reductions (as pooling).
• o The addition of an excellent and experienced management team to the Company alongside a strong familiarity between the companies/executives creates a comfortable organizational climate for the merger.

Target date to conclude the transaction: Q4 2025

Matrix will market IBM mainframe computers in Israel (1.5.2025)

Matrix will market IBM mainframe computers in Israel

IBM mainframe computers are the leaders in the enterprise computing market. They provide high performance, high reliability, and the ability to process huge amounts of data simultaneously.

IBM mainframe computers process large data volumes and trillions of transactions in real time.

It is perceived worldwide as the main computer of large institutions such as banks, airlines, the defense establishment, and government organizations.

IBM Mainframe & Quantum Computing The next revolution in the world of computing – 5 years from now (some say, even sooner...)

IBM is investing in quantum computing as the future of computing. While mainframe computers are a great solution for mass data processing, quantum computing offers new possibilities for highly advanced problem processing and optimization solutions that are not available on classic computers. IBM connects the two fields – mainframe and quantum computing – to offer smart and advanced solutions that are leading the way to the future of enterprise computing.

Quantum computing will enhance mainframe systems:

• High-speed data processing: quantum computing can improve the processing capacity of mainframe computers regarding complex problems that are very difficult to solve with existing technologies.
• Improved algorithms: quantum algorithms can enable advanced optimization of business processes, advanced economic and statistical models, algorithmic trading, predicting market behaviors, etc.
• The breakthrough in quantum computing together with the mainframe capabilities will facilitate new solutions in the worlds of AI and machine learning and will lead to the reopening of the MF market

At Matrix, we provide for the entire AI supply chain

At the base are AI infrastructures

Cloud

certifications

What sets Matrix apart Unique

• Winning Nimbus in all categories
• Marketplace
• Cloud pioneers in Israel since 2013
• Leaders in cloud deployment
• IaaS PaaS SaaS
• Experience with hundreds of cloud migration projects
• First in Israel to establish cloud based FinOps services
• High security clearance
• International operations
• Private and public cloud
• Dedicated solutions developed by us - Landing Zone - Orbital

Leading partners of:

>5,000 Subscriptions

FinOps Integrations & Services Enterprise Cloud

Enterprise Public Cloud (IaaS; PaaS, Compute as a Service)

Among our clientele

Data capabilities are a necessity for AI applications

Data & Analytics

Our expertise

• Specialization in research platforms
• The Matrix ecosystem
• Cyber + Digital + Data + Cloud
• International operations
• High security clearance
• Training for the data and analytics professions
• Specialization in privacy enhancing solutions
• Data & Analytics COE

leading the data market in Israel 10consecutive years (based on STKI rating)

Facts in

numbers

BI Implementation / Development Data & Analytics Cloud Migration Advanced Analytics, Data Science and ML projects Data & Analytics Strategy Consulting

Data & Analytics

Integration of national projects, projects in the business sector, and projects in the high-tech sector, such as:

A digital platform for day-to-day personal health management A data project for day-to-day management of personal health, development of intake and processing layers in the AWS environment that includes intake from MySQL and an app, processing to raw levels, and organizing data for business analysis.

Establishment of a 'data lake'

A first-of-its-kind database that brings together all the data on which the Central Bureau of Statistics studies are conducted

Data infrastructures for Clalit Health Services

A new organizational data lake aimed at improving the use of data in general, and to be the center of the organization's future data infrastructure.

Connecting everyday products and packaging to the world of IoT Planning and support in establishing a data solution that collects information from IoT, with a focus on securing, optimizing, and improving the data management processes within the Databricks environment.

Transforming geographic information into management insights Design and implementation of a scalable and automated data pipeline in the AWS environment to process and consolidate approximately 1.5 million daily JSON files into clean and structured files.

National credit database

Establishment of a national credit database while collecting, intaking, improving, and managing credit data from dozens of financial organizations.

AI capabilities: Developing models, business applications, and connecting with users

About the AI Center of Excellence (CoE)

Sample AI customers

Integration of defense projects, projects in the business sector, and projects in the high-tech sector, such as:

Protecting SaaS applications using NLP and AI

Supporting the protection of SaaS applications through an automated GenAI-based system for analyzing HTML files and converting them into structured and up-to-date knowledge that forms the basis for monitoring and handling information security events.

Open source Arabic/Hebrew translation model

Independent two-way Hebrew and Arabic translation platform in Israeli dialect. Cooperation between DDR&D ("Maf'at") and the Innovation Authority

Applied laboratories for accelerating AI development in the military

Applied laboratory for accelerating development and operational implementation of AI solutions in the field of natural language and in the field of mapping and decoding

Applied laboratories for accelerating AI development at the IAI

Applied laboratory for accelerating development and operational implementation of AI solutions in the field of natural language and in the field of identification and tracking

Cybersecurity to protect small and home networks

An automated AI and ML based solution for classifying connected devices; replaces a manual process that required daily processing of approximately 600 GB of logs. The solution accelerates coverage of device types, improving efficiency.

Identification of anomalies in IoT communications for cellular networks

An AI and ML based solution for identifying anomalies in IoT device transmissions that transmit to a cellular network.

AI capabilities: Developing models, business applications, and connecting with users

A ¹D2C3

Call for the establishment and accessibility of a laboratory for training large models for accelerating artificial intelligence (AI) studies

An Israeli alternative to GPU as a service: more power, less costs

Providing a direct response to the growing needs of the Israeli market in which technology companies, research organizations, financial institutions, defense contractors, health organizations, and government entities face a shortage of and/or very high costs in processing resources for training and operating advanced models.

The shortage of GPU and hardware import restrictions, as well as the high prices of cloud providers (hyperscalers), produce a bottleneck that impedes breakthroughs in the field. The venture will provide a powerful local alternative that will allow Israeli companies to continue developing advanced capabilities without being dependent on overseas resource availability, and at a competitive price.

Call for the establishment and accessibility of a laboratory for training large models for accelerating artificial intelligence (AI) studies

The potentiality is an outcome of the surprising reversal of investments in AI

Breakdown of ordinary IT expenditures according to Gartner

AI such as "Intel Inside" will be part of every software and every service, and this requires the underlying hardware that will make it possible

Call for the establishment and accessibility of a laboratory for training large models for accelerating artificial intelligence (AI) studies

Not just the hardware: value-added services

The ability to run training and operation of AI models securely, quickly, and seamlessly in a flexible business model (demand based)

The ability to accelerate the development process of these models in the transition from an idea to an operational model

The blend of "incubate" and "innovate" is the "friction" between AI application developers and foundational model creators that generates reciprocal value

Thank you for listening! Questions...