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Shares of a Tel Aviv-listed enterprise software company, referred to here under the fictional name Cortex Analytics Ltd., jumped in early trading after the firm reported quarterly revenue and profit ahead of analyst forecasts, driven by stronger-than-expected demand from its cloud subscription segment.
Subscription Growth Drives Beat
The company reported that annual recurring revenue rose at a faster clip than in the prior quarter, with management pointing to expanded contracts among existing enterprise customers as the primary driver rather than a pickup in new client wins. Operating margins also improved modestly, which executives attributed to efficiency gains in the firm’s research and development organization following a restructuring completed earlier in the year.
Sector Sentiment Improves
The results were seen by analysts as a positive read-through for the broader cluster of technology firms listed on the exchange, several of which have faced choppier trading this year amid shifting global appetite for growth-oriented software names. Local fund managers said the earnings beat could help support sentiment toward the sector heading into a busier stretch of quarterly reporting over the coming weeks. Currency effects were a modest tailwind for reported results, with the shekel’s movement against the dollar over the quarter providing a small boost to revenue when translated back into local currency terms, according to the company’s earnings commentary.