Formula Systems (1985) (FRA:FSY) Operating Income: €212 Mil (TTM As of Mar. 2026)


FRA:FSY Formula Systems (1985) Ltd FRA:FSY
68 GF Score
Price €89.00
GF Value €100.75
Valuation Modestly Undervalued
! 4 Warning Signs
View Full Analysis

What is Formula Systems (1985) Operating Income?

Formula Systems (1985) FRA:FSY +1.14% 68 Operating Income is €212 Mil as of Mar. 2026. GuruFocus rates FRA:FSY with a GF Score™ of 68/100 and a GF Value™ of €100.75 (Modestly Undervalued). The stock has 4 warning signs investors should review.

Formula Systems (1985)'s Operating Income for the three months ended in Mar. 2026 was €71 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 was €212 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Formula Systems (1985)'s Operating Income for the three months ended in Mar. 2026 was €71 Mil. Formula Systems (1985)'s Revenue for the three months ended in Mar. 2026 was €639 Mil. Therefore, Formula Systems (1985)'s Operating Margin % for the quarter that ended in Mar. 2026 was 11.11%.

Warning Sign:

Formula Systems (1985) Ltd operating margin has been in a 5-year decline. The average rate of decline per year is -3.3%.

Formula Systems (1985)'s 5-Year average Growth Rate for Operating Margin % was -3.30% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Formula Systems (1985)'s annualized ROC % for the quarter that ended in Mar. 2026 was 13.19%. Formula Systems (1985)'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2026 was 168.25%.

Formula Systems (1985)  (FRA:FSY) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Formula Systems (1985)'s annualized ROC % for the quarter that ended in Mar. 2026 is calculated as:

ROC % (Q: Mar. 2026 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2025 ) + Invested Capital (Q: Mar. 2026 ))/ count )
=283.736 * ( 1 - 19.76% )/( (1656.796 + 1795.24)/ 2 )
=227.6697664/1726.018
=13.19 %

where

Invested Capital(Q: Dec. 2025 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=3060.1 - 689.799 - ( 1093.541 - max(0, 1136.103 - 1849.608+1093.541))
=1656.796

Invested Capital(Q: Mar. 2026 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=3146.996 - 588.318 - ( 1023.213 - max(0, 1117.476 - 1880.914+1023.213))
=1795.24

Note: The Operating Income data used here is four times the quarterly (Mar. 2026) data.

2. Joel Greenblatt's definition of Return on Capital:

Formula Systems (1985)'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2026 is calculated as:

ROC (Joel Greenblatt) %(Q: Mar. 2026 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Dec. 2025  Q: Mar. 2026
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=283.736/( ( (164.887 + max(-157.041, 0)) + (172.39 + max(-41.669, 0)) )/ 2 )
=283.736/( ( 164.887 + 172.39 )/ 2 )
=283.736/168.6385
=168.25 %

where Working Capital is:

Working Capital(Q: Dec. 2025 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(661.398 + 25.833 + 37.771) - (689.799 + 134.543 + 57.701)
=-157.041

Working Capital(Q: Mar. 2026 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(730.544 + 31.403 + 0) - (588.318 + 160.515 + 54.783)
=-41.669

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2026) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Formula Systems (1985)'s Operating Margin % for the quarter that ended in Mar. 2026 is calculated as:

Operating Margin %=Operating Income (Q: Mar. 2026 )/Revenue (Q: Mar. 2026 )
=70.934/638.617
=11.11 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Formula Systems (1985) Operating Income Related Terms

Formula Systems (1985) Operating Income Historical Data

* Premium members only.

The historical data trend for Formula Systems (1985)'s Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Formula Systems (1985) Operating Income Chart

Formula Systems (1985) Annual Data
Trend Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24 Dec25
Operating Income
Get a 7-Day Free Trial Premium Member Only Premium Member Only 184.09 219.37 144.93 175.08 167.71

Formula Systems (1985) Quarterly Data
Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24 Dec24 Mar25 Jun25 Sep25 Dec25 Mar26
Operating Income Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 45.81 58.86 46.48 35.52 70.93
FRA:FSY
68GF Score
Formula Systems (1985) Ltd FRA:FSY
Operating Income is just one metric. See GF Score™, valuation, warning signs, and more.
View Full Analysis

Formula Systems (1985) Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 adds up the quarterly data reported by the company within the most recent 12 months, which was €212 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Frequently Asked Questions Learn more about Operating Income →
What does a Operating Income of €212 Mil mean?
Formula Systems (1985) (FRA:FSY) has a Operating Income of €212 Mil as of Mar. 2026. Operating Income equals sales less all operating expenses. It is linked to EBIT. View historical data on Formula Systems (1985) and its competitors.
Is Formula Systems (1985)'s Operating Income too high?
Formula Systems (1985)'s current Operating Income is €212 Mil. Overall, Formula Systems (1985) has a GF Score™ of 68/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Formula Systems (1985)'s Operating Income compare to IBM and ACN?
Formula Systems (1985)'s Operating Income of €212 Mil can be compared against companies in the Software industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Income for a Software company?
A good Operating Income depends on the Software industry context. However, Operating Income should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Income mean?
A high Operating Income can signal that a stock is expensive relative to its fundamentals. Operating Income equals sales less all operating expenses. It is linked to EBIT. View historical data on Formula Systems (1985) and its competitors. Formula Systems (1985)'s current Operating Income is €212 Mil. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Formula Systems (1985) stock overvalued right now?
Based on GuruFocus' analysis, Formula Systems (1985) (FRA:FSY) is currently considered Modestly Undervalued. The stock's GF Value™ is €100.75, compared to a current price of €89.00 — trading 11.7% below its estimated fair value. The current Operating Income is €212 Mil. Formula Systems (1985)'s overall GF Score™ is 68/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Income calculated?
Operating Income is calculated from a company's financial statements. For Formula Systems (1985) (FRA:FSY), the current Operating Income is €212 Mil as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Is Formula Systems (1985) (FRA:FSY) Overvalued in 2026?

Based on GuruFocus' analysis, Formula Systems (1985) stock appears to be undervalued. The current stock price of €89.00 is trading 11.7% below its estimated GF Value™ of €100.75. GuruFocus considers Formula Systems (1985) to be Modestly Undervalued.

Key valuation signals for FRA:FSY:

  • Operating Income: €212 Mil
  • GF Value™: €100.75 vs. price of €89.00 (11.7% below fair value)
  • GF Score™: 68/100 with 4 warning signs

No single metric tells the full story. See the FRA:FSY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.

Formula Systems (1985) Business Description

Other Exchanges FORTY:USAFORTY:Israel
Address Terminal Center, 1 Yahadut Canada Street, Or Yehuda, Tel Aviv, ISR, 6037501
Formula Systems (1985) Ltd is an information technology company that is principally engaged through its directly and indirectly held investees in providing software consulting services, selling and marketing computer-based business solutions and hardware products from a wide range of domestic and international manufacturers, as well as developing proprietary software solutions. It delivers solutions in Israel and in numerous countries to customers with complex IT services needs. It designs and implements IT solutions and software systems that improve the productivity of customers' existing IT assets, enable them to effectively manage their operations and reduce their business risks in the face of changing business environments.
68GF Score

Get the complete analysis for FRA:FSY

Operating Income is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.

€89.00
Price
€100.75
GF Value