One Technologies published its second-quarter report. A day earlier Matrix filed, and comparing the two teaches more than either does on its own.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
The Quarter
| NIS millions | The quarter | Share of revenue |
|---|---|---|
| Revenue | 1,390.7 | |
| Gross profit | 168.3 | 12.1% |
| Operating profit | 91.4 | 6.6% |
| Pre-tax profit | 88.3 | 6.4% |
| Net profit | 68.5 | 4.9% |
| Attributable to shareholders | 64.5 | |
| Non-controlling interests | 4.0 | |
| Basic earnings per share | NIS 0.87 | |
| Balance sheet total | 2,901.8 | |
| Shareholders' equity | 1,078.5 |
Two Companies, the Same Sector
Matrix filed yesterday, and both companies operate in the same field - IT services, outsourcing, development and implementation.
| Q2 2026 | Matrix | One Technologies |
|---|---|---|
| Revenue | 2,119.4m | 1,390.7m |
| Gross margin | 18.3% | 12.1% |
| Operating margin | 9.5% | 6.6% |
| Margin survival | 52% | 54% |
| Net profit | 135.4m | 68.5m |
And the figure that surprises in this table is actually the fourth row.
The margins differ significantly - Matrix is 6.2 percentage points higher at the gross line and 3.0 higher at the operating line.
But margin survival is nearly identical: 52% at Matrix, 54% at One. That is, both lose roughly the same proportion of their gross margin on the way to the operating line.
And that means the difference between them is not in central expenses - but in the gross margin itself.
And in IT services, the gross margin is essentially the gap between what is charged to the client and what is paid to the employee. A six-percentage-point gap there usually points to a different mix: a different balance between hourly work and projects, products or managed services.
The structured filing does not detail the mix, so I will not determine what the explanation is here.
Tax and Allocation
Pre-tax profit of NIS 88.3 million and net profit of NIS 68.5 - that is, tax of NIS 19.8 million, an effective rate of 22.4%.
Very close to the Israeli corporate rate of 23%. A report clean of exceptional items.
And of net profit, NIS 4.0 million was allocated to non-controlling interests, and NIS 64.5 million to One's shareholders.
The Balance Sheet
| Balance sheet total | NIS 2,901.8 million |
| Shareholders' equity | NIS 1,078.5 million |
| Ratio | 2.7 to one |
| Return on equity, annualised | about 23.9% |
And here is a coincidence worth noting: One's return on equity, about 23.9%, is nearly identical to that of Matrix - which also stood at about 23.9% for the quarter.
That is, two companies with significantly different margins produce nearly the same return on equity.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This comparison is exactly why I prefer to read two companies from the same sector together rather than each on its own.
A gross margin of 12.1% looks weak - until you look at what happens after it. One keeps 54% of its gross margin through to the operating line, and that is more than Matrix. So the problem, if there is one, is not in expense management.
And what interests me is that the return on equity is nearly identical in both. A company with a lower margin can produce the same return if it turns over more revenue on the same equity - and that is precisely what is happening here: One generates NIS 1.39 billion of revenue on equity of 1.08 billion, and Matrix 2.12 billion on 2.05 billion.
And that is a useful distinction in any services sector: a low margin is not necessarily a worse business. It is a business that earns through turnover instead of through pricing.
And what I would place alongside both is a number that is not in the structured filing: the headcount. In a business sold in person-hours, revenue per employee and profit per employee separate the two better than any other ratio.
(It is important to stress: this is my personal opinion only, and nothing herein constitutes a recommendation to take any action.)
