IBI Follow-Up: Neto Is In, But What Is the Real Earnings Quality of Four Seasons?
Four Seasons more than doubled IBI's pension segment after Neto, but 2025 blends real operating scale with a one-off gain, partial parent ownership, and agent-agreement rewiring that will distort revenue. The real test is whether EBITDA holds up once the transaction noise clears.
The main article argued that IBI's 2026 test is not raw growth anymore, but integration. This follow-up isolates the sharper question: after Neto, does Four Seasons already look like a clean recurring-earnings engine, or is 2025 still a mix of acquisition effect, one-off accounting, and ownership structure that flatters the first read.
The raw numbers are strong. The pension and financial agencies segment rose in 2025 to revenue of NIS 186.1 million, up from NIS 88.7 million in 2024, while segment profit climbed to NIS 40.9 million from NIS 9.7 million. At the same time, Four Seasons now supervises roughly NIS 50.6 billion, provides an operating platform to about 300 financial planners, and works with roughly 97,000 end clients. This is no longer a side activity.
But the jump is not fake, it is just not clean. More than half of segment revenue in 2025, NIS 101.1 million, is attributed to Neto. Segment EBITDA rose to NIS 56.7 million, yet the presentation explicitly says the 2025 figure includes a one-off gain of NIS 13.6 million from the transition to control over Neto. The ownership layer is also incomplete: IBI owns 65% of Four Seasons and only 51% of the wealth-management company. Anyone reading the pension segment as if it fully belongs to IBI shareholders is reading a version of the story that is too convenient.
What really jumped in 2025
The presentation shows a very steep path: revenue of NIS 35 million in 2022, NIS 52 million in 2023, NIS 89 million in 2024, and NIS 186.1 million in 2025. On IBI's own framing, the segment already reached 12% of total company revenue, up from 8% in 2024 and 6% in 2023. In other words, private pension and financial distribution is no longer just a diversification layer. It is turning into a real growth pillar.
Still, the issue here is not whether there is growth, but what kind of growth. When a company acquires control over an activity and reports, in the same year, both a sharp operating jump and a one-off gain, 2025 cannot be taken as a clean earnings base without breaking the number apart. If the NIS 13.6 million one-off gain is technically stripped out, 2025 segment EBITDA would look closer to NIS 43.1 million. That still leaves a much stronger business than in 2024, but it is less clean than the headline figure suggests.
The more important point is that the economic engine did expand. Four Seasons also reported NIS 10 billion of sales in financial and pension products in 2025, while management pointed to continued organic expansion of the planner network and further acquisitions. So this is not just an accounting uplift. The right way to read 2025 is as a transition point between a jump bought through a transaction and an earnings base that still has to prove it is recurring.
Not all of the segment's profit belongs to IBI shareholders
This is one of the gaps most readers will miss on a fast pass. Segment profit in 2025 stood at NIS 40.9 million, yet profit attributable to the company's shareholders from that segment stood at only NIS 26.6 million. The same gap exists in the fourth quarter: segment profit of NIS 8.6 million versus NIS 5.6 million attributable to IBI shareholders.
That is not an accounting footnote. It goes to the core of earnings quality. Four Seasons is the platform driving the segment, but IBI does not own 100% of the layer generating those profits. Segment profit is therefore a useful starting point for understanding direction, but not a number that can be copied straight into the listed company's economics.
Put differently, the segment is much bigger than before, but part of the jump stays outside the public shareholders' pocket. As long as that gap remains, and especially in a year that also includes a one-off gain, it is too early to tell a simple story that the segment doubled and earnings quality doubled with it. Those are not the same thing.
Why 2026 revenue will be a noisy number
This is where the filing gives away the most important clue. Segment revenue comes from two commission types: recurring commissions paid out of the client's accumulated assets each month or quarter, and scope commissions, which are one-off commissions tied to bringing in new clients, based on transferred balances and annual deposits. The filing does not disclose the mix between those two inside the 2025 jump. Without that split, it is impossible to know how much of the increase is recurring base business and how much is more sensitive to new fundraising and transfers.
The more material point comes from the next integration step. Starting in the fourth quarter of 2025, Four Seasons began signing new agreements with all agents transferred in the acquisition so they would be entitled to receive commissions directly from manufacturers. The company states explicitly that this process is expected to reduce revenue, but at the same time also reduce agent-commission expense, with no expected effect on EBITDA.
That is a short sentence with large implications. It means 2026 revenue may look weaker even if the economics of the activity are not deteriorating, simply because part of the clearing model is moving directly between manufacturers and agents. The market could easily misread the next few quarters if it gets stuck on the revenue line instead of watching EBITDA, attributable profit, and the ability to preserve economic mass after the reporting model changes.
| Factor | What is already known | Why it matters for earnings quality |
|---|---|---|
| Neto contribution | NIS 101.1 million of 2025 segment revenue is attributed to Neto | The annual jump is driven mainly by acquisition rather than only by organic growth |
| One-off item | NIS 13.6 million one-off gain from the move to control over Neto | The 2025 EBITDA figure is not a clean base |
| Ownership structure | NIS 40.9 million segment profit versus NIS 26.6 million attributable to shareholders | Not all of the segment's profit is available at the public-company layer |
| Agreement rewiring | Revenue and agent-commission expense are both expected to decline, with no expected EBITDA hit | The 2026 revenue line will be noisy and less reliable as a standalone signal |
| Legal tail | The appeal hearing was pushed to a date to be set during Q2 2026 | The deal closed, but transaction noise did not fully disappear |
The legal tail and the financing tail
Even after completion, the transaction still carries two tails worth watching. The first is legal. The deal was completed in practice on February 2, 2025, after approval by the competition authority and court approval of the debt arrangement. The parties later waived the condition that required a final judgment, but put in place mechanisms for returning funds if the ruling were changed or cancelled. A request to stay execution was rejected in March 2025, yet in December 2025 the Supreme Court postponed the appeal hearing to a date to be set during the second quarter of 2026 in order to allow mediation to be exhausted.
That does not mean the acquisition is hanging in the air. Economically, it is already inside the group. But it does mean there is still open legal noise stretching into 2026. When that sits on top of a transition year in the accounting and a reworking of agent agreements, the result is a business whose economics improved, but whose read is still not quiet.
The second tail is financing. To fund the first Neto deal in 2023, Four Seasons took a NIS 30 million five-year loan at an effective interest rate of 6.67%. That loan was repaid in February 2025, and at the same time Four Seasons took a new Bank Hapoalim loan at 6%, with straight-line annual repayment. Under that facility, Four Seasons committed to a debt-to-EBITDA ratio not above 3 and minimum annual revenue of NIS 30 million. The company says it is in compliance, but does not disclose the headroom. That matters because, on the financing side too, 2026 looks like a proof year rather than an automatic victory lap.
What has to happen for the jump to become a real base
The right read of Four Seasons after Neto is not "the numbers jumped, so the story is settled," but "the numbers jumped, and now we need to see what remains after the cleanup." Three tests will determine whether 2025 was simply a successful deal year or the start of a cleaner earnings base.
The first test is operational: does EBITDA stay strong once the new agent agreements fully flow through. If the company shows lower revenue but broadly stable EBITDA, that would actually be a good sign that 2025 revenue was technically inflated by clearing mechanics rather than by weak quality underneath.
The second test is the shareholder layer: can IBI's share of segment profit remain large enough to turn segment expansion into a cleaner contribution to attributable earnings. If the gap between segment profit and attributable profit stays wide, part of the segment enthusiasm will remain trapped at the 100% view rather than at the public-shareholder view.
The third test is transaction cleanup: resolution of the mediation or clear progress in the appeal, together with proof that the financing constraints remain comfortably distant, would turn 2025 from a transaction year into a base year. Without that, even good results will continue to come with an asterisk.
Bottom line
Four Seasons exited 2025 larger, deeper, and more important. Neto gave it scale, distribution, and a broader commercial leg, and that is visible in revenue, EBITDA, and the segment's weight inside IBI. But anyone looking for a fully clean recurring-earnings engine already today is still getting only part of the picture.
The right thesis for now is this: Neto is already inside the platform, but Four Seasons' earnings quality will only be visible after three deductions, the one-off gain, the minority-interest layer, and the accounting noise created by the agent-agreement rewiring. If EBITDA stays high after those deductions, IBI will have a much stronger pension-distribution engine. If not, 2025 will remain mainly a transaction year with attractive numbers.
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