Israeli technology company PEAX reports millions in losses due to dollar exchange rate

The PEAX Group is an Israeli technology and IT services company providing advanced computing solutions, cyber defense, and secure infrastructure for security agencies, banks, and organizations. According to the data, revenues totaled approximately 366.6 million NIS compared to approximately 335 million NIS in the corresponding quarter.

The increase in revenues was driven by organic growth in both business segments, despite an appreciation of approximately 17.7% in the shekel exchange rate against the dollar, which moderated growth and reduced the shekel value of dollar-linked sales.

Revenues for the cloud infrastructure, computing, and cyber segment in the quarter totaled approximately 269.5 million NIS compared to approximately 242 million NIS in the corresponding quarter last year. Revenues for the software, cloud applications, and digital segment totaled approximately 99.4 million NIS compared to approximately 97.2 million NIS last year.

Gross profit for the quarter totaled approximately 55.1 million NIS compared to approximately 47.7 million NIS. The increase in gross profit was due to revenue growth in both business segments and improved profitability from a more profitable transaction mix. Operating profit for the quarter totaled approximately 11.8 million NIS compared to approximately 8.1 million NIS in the corresponding quarter last year. According to the company's estimate, the impact of the exchange rate appreciation relative to the corresponding period led to a reduction in operating profit estimated at approximately 4.6 million NIS.

Operating profit in the cloud infrastructure, computing, and cyber segment grew by approximately 85% to approximately 7.8 million NIS compared to approximately 4.2 million NIS in the corresponding quarter last year. The impact of the exchange rate appreciation led to an estimated profit loss of 3.7 million NIS in this segment. Operating profit in the software, cloud applications, and digital segment totaled approximately 4 million NIS compared to approximately 3.9 million NIS last year.

According to the report, EBITDA for the quarter totaled approximately 20.6 million NIS compared to approximately 16.2 million NIS in the corresponding quarter. Net financing expenses totaled approximately 10.1 million NIS, compared to approximately 5.9 million NIS in the corresponding quarter last year. The increase was mainly due to the registration in the corresponding quarter of financing income from revaluation that was 3.4 million NIS higher than in the current quarter, as well as an increase in interest expenses following higher credit usage to finance growth.

Net profit for the quarter totaled approximately 1.2 million NIS compared to approximately 2.4 million NIS in the corresponding quarter last year. The change in profit was influenced by the aforementioned increase in financing expenses, partially offset by the significant increase in operating profit. The effects of the sharp exchange rate appreciation led to an estimated loss of approximately 7.4 million NIS in net profit for this quarter.