Exhibit 99.1

PRESS RELEASE

Formula Systems Reports Third Quarter and Nine Months 2022 Financial Results

Or Yehuda, Israel, November 17, 2022 – Formula Systems (1985) Ltd. (Nasdaq and TASE: FORTY) (“Formula” or the “Company”), a global information technology group engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its results for the third quarter and nine-month period ended September 30, 2022.

Financial Highlights for the Third Quarter Ended September 30, 2022

● Consolidated revenues for the third quarter ended September 30, 2022, increased by 8.5% to $636.3 million, compared to $586.3 million in the same period last year.

● Consolidated operating income for the third quarter ended September 30, 2022, increased by 14% to $57.5 million, compared to $50.5 million in the same period last year.

● Consolidated net income attributable to Formula’s shareholders for the third quarter ended September 30, 2022, increased by 27% to $16.9 million, or $1.09 per fully diluted share, compared to $13.3 million, or $0.85 per fully diluted share, in the same period last year.

Financial Highlights for the Nine-Month Period Ended September 30, 2022

● Consolidated revenues for the nine months ended September 30, 2022, increased by 11% to $1.94 billion, compared to $1.75 billion in the same period last year.

● Consolidated operating income for the nine months ended September 30, 2022, increased by 45.8% to $216.5 million, compared to $148.4 million in the same period last year. Operating income for the nine months ended September 30, 2022, included a capital gain realized from the disposition of a Matrix IT Ltd. subsidiary in an amount of $44.2 million. Excluding such impact, consolidated operating income for the nine months ended September 30, 2022, increased by 16% compared to the same period last year.

● Consolidated net income attributable to Formula’s shareholders for the nine months ended September 30, 2022, increased by 69.2% to $66.1 million, or $4.24 per fully diluted share, compared to $39.0 million, or $2.51 per fully diluted share, in the same period last year. Net income for the nine months ended September 30, 2022, was positively impacted by approximately $17.1 million resulting from the disposition of a subsidiary of Matrix IT Ltd. Excluding such impact, consolidated net income attributable to Formula’s shareholders for the nine months ended September 30, 2022, increased by 25.4% compared to the same period last year.

● As of September 30, 2022, Formula held 48.7%, 44.1%, 46.3%, 100%, 50%, 90.1%, 80% and 100% of the outstanding ordinary shares of Matrix IT Ltd., Sapiens International Corporation N.V., Magic Software Enterprises Ltd., Michpal Micro Computers (1983) Ltd., TSG IT Advanced Systems Ltd., Insync Staffing Solutions, Inc., Ofek Aerial Photography Ltd. And ZAP Group Ltd., respectively.

● Consolidated cash and cash equivalents, short-term bank deposits and investments in marketable securities totaled approximately $508.4 million as of September 30, 2022, compared to $512.5 million as of December 31, 2021.

● Total equity as of September 30, 2022, was $1.15 billion (representing 42.6% of the total consolidated statements of financial position), compared to $1.18 billion (representing 42.9% of the total consolidated statements of financial position) as of December 31, 2021.

Declaration of Dividend

● Based on the Company’s results, the Company’s board of directors approved the distribution of a cash dividend in an amount of NIS 2.16 per share (approximately $0.63 per share) and in an aggregate amount of approximately NIS 33.1 million (approximately $9.7 million). 

● The dividend is payable on December 20, 2022, to all of the Company’s shareholders of record at the close of trading on the Nasdaq Global Select Market (or the Tel-Aviv Stock Exchange, as appropriate) on December 5, 2022. The dividend will be paid in New Israeli Shekels with respect to the Company’s ordinary shares traded on the Tel Aviv Stock Exchange and American Depositary Receipts traded on the Nasdaq Global Select Market.

In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30% (if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company’s share capital) or 25% (for all other dividend recipients) of the dividend amount payable to each shareholder of record, subject to applicable exemptions.

Debentures Covenants

As of September 30, 2022, Formula was in compliance with all of its financial covenants under the debenture series issued by it, based on the following achievements:

Covenant 1

● Target equity attributable to Formula’s shareholders (excluding non-controlling interests): above $215 million.

● Actual equity attributable to Formula’s shareholders as of September 30, 2022, was equal to $548.5 million.

Covenant 2

● Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for Formula’s Series A and C Secured Debentures): below 65%.

● Actual ratio of net financial indebtedness to net capitalization, as of September 30, 2022, was equal to 11.2%.

Covenant 3

● Target ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters): below 5.

● Actual ratio of net financial indebtedness to EBITDA (based on the accumulated calculation for the four most recent quarters and excluding a capital gain of $44.2 million realized from the disposition of a Matrix IT Ltd. subsidiary), as of September 30, 2022, was equal to 0.4.

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Comments of Management

Commenting on the results, Guy Bernstein, CEO of Formula Systems, said: “We are very pleased to continue our strong momentum recorded across our entire investment portfolio, reaching all-time third quarter highs across all of our key indices (revenues, gross profit, operating income, EBITDA and net income). Our strong third quarter financial results recorded across all our key financial indices reflect the strengths of our investment portfolio business models. Our broad investment portfolio allows us to carefully mitigate the current risks in the IT market, which are mainly the challenging macro-economic environment, as well as the fierce competition over talented IT workforce. We continue our efforts across our entire group to adhere to our core values of innovation, professionalism, agility and transparency, which allow us to continue to create significant value for our customers in managing, streamlining, accelerating and contributing to their growth.”

“Matrix reported its best third quarter in history with record-breaking results recorded across all its key financial indices with 85% of the growth deriving from organic growth. We are pleased with Matrix’s continued recognition as a market leader in Israel in the implementation of fastest-growing technologies, such as cloud, cyber, digital, data, DevOps and AI, which enable the company to create significant value for its customers in managing, streamlining, accelerating and making their businesses thrive. There is a strong demand in Israel for software services in digital, cloud, cyber, data, and core operating systems—areas in which Matrix is a market leader, and which are at the center of the IT market demand.”

“Sapiens’ revenues reached $119 million, and on a constant currency basis, grew by 8%. Non-GAAP operating income this quarter reached $20.9 million, representing an operating margin of 17.6%, which on a constant currency basis, would have reached 18.9%. Sapiens is still in the early days of an incredible industry transformation as insurance carriers continue to transform their core systems to remain relevant, competitive, and compliant. As a global player with multiple product lines and cloud capabilities and a cost-efficient operating model which combines off-and on-shore delivery capabilities, Sapiens is positioned in a sweet spot to reap the gains of this opportunity.”

“Magic Software reported another record quarter which further adds to its strong 2022 momentum. During the first nine months of 2022, Magic Software reported double digit growth and all-time highs across all of its key indices (revenues, gross profit, operating income, EBITDA and net income), which demonstrates the important role that Magic Software plays in its customers’ lifecycles and transformative journeys, as well as the success of its strategy to build a broad business portfolio that creates value for its customers in managing, streamlining, accelerating and maximizing their businesses. Magic increased its 2022 revenue guidance for the full year of 2022 for the third time this year to a range of $555 to $565 million from its prior range of $550 to $560 million.”

“Michpal Group continues to realize synergies and monetize on its business model with its revenues for the first nine months of 2022 growing by 24% on a constant currency basis compared to the same period last year, to NIS 90 million (approximately $27.8 million) with 38% accounted to organic growth.”

“TSG materialized its strategy of expanding its presence in the Israeli municipal institutions sector by acquiring 51% of the outstanding share capital of E.P.R. Systems Ltd. Headquartered in Israel, E.P.R has over 20 years of experience and serve more than 100 local authorities in Israel. The company offers comprehensive software solutions for municipal institutions primarily to manage all their billing and collection operations for all types of revenues, including taxes, fees and levies and several innovative extension modules. Additionally, E.P.R offers a full scope of expert implementation, application management and hosting services, enabling municipal institutions to execute their digital and business strategies.”

Stand-Alone Financial Measures

This press release presents, further below, certain stand-alone financial measures to reflect Formula’s stand-alone financial position in reference to its assets and liabilities as the parent company of the group. These financial measures are prepared consistent with the accounting principles applied in the consolidated financial statements of the group. Such measures include investments in subsidiaries and a jointly controlled entity measured at cost adjusted by Formula’s share in the investees’ accumulated undistributed earnings and other comprehensive income or loss.

Formula believes that these financial measures provide useful information to management and investors regarding Formula’s stand-alone financial position. Formula’s management uses these measures to compare the Company’s performance to that of prior periods for trend analyses. These measures are also used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these stand-alone financial measures provides an additional tool for investors to use in evaluating Formula’s financial position.

Management of the Company does not consider these stand-alone measures in isolation or as an alternative to financial measures determined in accordance with GAAP. Formula urges investors to review the consolidated financial statements which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business or financial position.

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About Formula

Formula Systems, whose ordinary shares are traded on the Tel-Aviv Stock Exchange and ADSs are traded on the Nasdaq Global Select Market, is a global information technology holding company engaged, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products.

For more information, visit www.formulasystems.com.

Press Contact:

Formula Systems (1985) Ltd.

+972-3-5389487

ir@formula.co.il

Forward Looking Statements

Certain matters discussed in this press release that are incorporated herein and therein by reference are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: adverse macro-economic trends, including inflation, rising interest rates and supply chain delays, triggered in part by the COVID-19 (coronavirus) pandemic, which trends may last for a significant period and materially adversely affect our results of operations; the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems; risks related to the insurance industry in which our clients operate; risks associated with our global sales and operations, such as changes in regulatory requirements, adverse consequences of international conflicts such as Russia’s invasion of the Ukraine, or fluctuations in currency exchange rates; and risks related to our principal location in Israel.

While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Item 3.D Risk Factors” in our most recent Annual Report on Form 20-F, filed with the U.S. Securities and Exchange Commission on May 16, 2022, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, or to conform those statements to actual results or to changes in our expectations.

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FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED CONDENSED STATEMENTS OF PROFIT OR LOSS

U.S. dollars in thousands (except per share data)

	Three months ended						Nine months ended
	September 30,						September 30,
	2022			2021			2022		2021
	Unaudited						Unaudited
Revenues		636,311			586,257			1,938,473		1,746,775
Cost of revenues		482,875			444,617			1,481,200		1,338,636
Gross profit		153,436			141,640			457,273		408,139
Research and development costs, net		18,064			16,796			53,262		49,121
Selling, marketing and general and administrative expenses		77,843			74,390			231,756		210,576
Capital gain from realization of a Matrix IT’s subsidiary		-			-			44,208		-
Operating income		57,529			50,454			216,463		148,442
Financial expenses, net		4,629			5,580			13,028		16,623
Income before taxes on income		52,900			44,874			203,435		131,819
Taxes on income		11,405			9,821			44,328		30,014
Income after taxes		41,495			35,053			159,107		101,805
Share of profit of companies accounted for at equity, net		(38	)		(308	)		575		353
Net income		41,457			34,745			159,682		102,158
Net income attributable to non-controlling interests		24,580			21,452			93,628		63,111
Net income attributable to Formula Systems’ shareholders		16,877			13,293			66,054		39,047
Earnings per share (basic)		1.11			0.87			4.32		2.55
Earnings per share (diluted)		1.09			0.85			4.24		2.51
Number of shares used in computing earnings per share (basic)		15,296,267			15,289,267			15,294,725		15,289,267
Number of shares used in computing earnings per share (diluted)		15,531,828			15,396,849			15,507,992		15,366,211

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FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

U.S. dollars in thousands

	September 30,		December 31,
	2022		2021
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		470,459		485,391
Short-term deposits		36,934		25,924
Marketable securities		993		1,142
Trade receivables, net		668,389		696,321
Other accounts receivable and prepaid expenses		71,240		72,118
Inventories		36,067		21,221
Total current assets		1,284,082		1,302,117
LONG-TERM ASSETS:
Deferred taxes		40,098		46,364
Other investments, long-term accounts receivable and prepaid expenses		42,017		23,676
Investments in companies accounted for at equity method		26,269		28,900
Property, plants and equipment, net		53,469		56,886
Right-of-use assets		109,838		115,833
Net intangible assets and goodwill		1,134,890		1,174,790
Total long-term assets		1,406,581		1,446,449
TOTAL ASSETS		2,690,663		2,748,566
CURRENT LIABILITIES:
Loans and credit from banks and others		174,309		175,696
Debentures		60,310		48,455
Current maturities of lease liabilities		41,295		41,655
Trade payables		187,308		205,835
Deferred revenues		123,569		140,660
Employees and payroll accrual		191,278		207,553
Other accounts payable		68,029		80,411
Liabilities in respect of business combinations		17,363		7,773
Put options of non-controlling interests		53,251		39,558
Total current liabilities		916,712		947,596
LONG-TERM LIABILITIES:
Loans from banks and others		135,064		157,229
Debentures		283,391		205,035
Lease liabilities		77,088		84,839
Other long-term liabilities		12,000		12,183
Deferred taxes		68,375		78,135
Deferred revenues		11,444		17,757
Liabilities in respect of business combinations		20,955		21,644
Put options of non-controlling interests		11,429		31,720
Employees benefit liabilities, net		9,191		12,641
Total long-term liabilities		628,937		621,183
EQUITY
Equity attributable to Formula Systems’ shareholders		548,493		540,960
Non-controlling interests		596,521		638,827
Total equity		1,145,014		1,179,787
TOTAL LIABILITIES AND EQUITY		2,690,663		2,748,566

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FORMULA SYSTEMS (1985) LTD.

STAND-ALONE STATEMENTS OF FINANCIAL POSITION

U.S. dollars in thousands

	September 30,		December 31,
	2022		2021
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		72,718		14,163
Short-term deposits		12,701		-
Other accounts receivable and prepaid expenses		6,544		4,513
Total current assets		91,963		18,676
LONG-TERM ASSETS:
Investment in subsidiaries and a jointly controlled entity (*)
Matrix IT Ltd.		146,583		154,391
Sapiens International Corporation N.V.		217,303		231,130
Magic Software Enterprises Ltd.		119,726		122,358
Other		155,492		174,481
Total investment in subsidiaries and a jointly controlled entity		639,104		682,360
Long term receivables and other investments		14,416		2,547
Property, plants and equipment, net		8		10
Total long-term assets		653,528		684,917
TOTAL ASSETS		745,491		703,593
CURRENT LIABILITIES:
Loans from banks and others		6,164		-
Debentures		33,872		28,654
Trade payables		259		192
Other accounts payable		8,257		5,339
Put options of non-controlling interests		1,082		-
Total current liabilities		49,634		34,185
LONG-TERM LIABILITIES:
Debentures		147,364		126,049
Put options of non-controlling interests		-		1,249
Liability in respect of a business combination		-		1,150
Total long-term liabilities		147,364		128,448
EQUITY		548,493		540,960
TOTAL LIABILITIES AND EQUITY		745,491		703,593

(*) The investments’ carrying amounts are measured consistent with the accounting principles applied in the consolidated financial statements of the group and representing the investments’ cost adjusted by Formula’s share in the investees’ accumulated undistributed earnings and other comprehensive income or loss.

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