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FORTYVery BullishEarningsShort Term

High materiality9/10

Formula Systems Reports Second Quarter and First Half 2026 Financial Results

StockNews.AIAug 25, 7:40 AM EDT1 source

Trading thesisImportance 9/10

FORTY should display near-term bullish momentum on strong earnings, dividend support, and robust cash, with potential multi-quarter upside as growth accelerates.

AI summary

What happened and why it matters

Formula Systems posted record Q2 2026 revenue of $782.4 million and first-half revenue of $1.52 billion, with substantial YoY gains in operating and net income. The results include a $16.6 million capital gain from a TSG placement, with stand-alone figures excluding Sapiens, which moved to discontinued operations after Advent’s acquisition. The company also declared a $1.63 per-share dividend and noted strong covenant compliance, signaling solid cash generation and optionality for growth initiatives.

Record quarterly revenue and significant H1 growth provide fundamental upside for FORTY.
Dividend announcement adds yield and may attract value-oriented buyers.
Debt covenants healthy; potential for accretive M&A or share repurchases in 2027.

Sentiment rationale

Exceptional YoY and H1 growth metrics, substantial net income expansion, and a meaningful dividend create immediate upside catalysts. The strong covenant position reduces funding risk and supports potential strategic actions. While one-time capital gains (TSG) inflate operating income, ex-capital gains, underlying profitability still shows solid improvement, which tends to re-rate shares on a multi-quarter horizon.

Key facts

01
Q2 2026 revenue $782.4m, up 29.8% YoY; H1 revenue $1.521b, up 24.4%.
02
Q2 operating income $71.6m, up 41.3% YoY; net income continued ops $23.3m, +163.7%.
03
Dividend of $1.63/share ($25m total) declared; payout Oct 6, 2026; record Sept 22.
04
TSG private placement diluted Formula’s stake; stand-alone results exclude Sapiens (discontinued).

Earnings

Category: Earnings. The release combines IFRS-based consolidated results, stand-alone disclosures, and forward-looking commentary, highlighting durable growth, cash generation, and a high-dividend payout—key fundamentals drivers for FORTY.