Mihshuv Yashir 2025: ONE Is Creating More Value, but the Holdco Layer Still Decides How Much Reaches Upstream

Getting to Know the Company

At first glance, Mihshuv Yashir looks like a large Israeli IT company with revenue of NIS 4.65 billion and net profit of NIS 274.1 million. That is only a partial read. What public shareholders really own is first a holding layer that exercises de facto control over ONE Technologies with just 34.88% of the equity, plus a much smaller financing activity through Taklis. That is why the consolidated report tells a big operating story, but not necessarily the full story of what actually reaches Mihshuv Yashir shareholders.

This is the core gap. Out of NIS 274.1 million of consolidated net profit in 2025, only NIS 97.4 million was attributable to the parent’s shareholders, while NIS 176.7 million was attributed to non-controlling interests. In other words, anyone reading only the consolidated statements sees a software and services group that is growing nicely. Anyone reading the capital structure correctly sees a listed vehicle sitting above ONE, so every discussion about value, distributions, and cash has to go through the question of how much of the value created below actually makes it upstairs.

What is working now is clear enough. ONE kept growing at a double-digit pace, group revenue rose 16.2%, cash flow from operations increased to NIS 455.0 million, and the group ended the year with NIS 642.8 million of cash against NIS 161.6 million of bank debt. The parent company itself also entered 2026 with no bank debt, a short-term deposit of NIS 70.3 million, and NIS 742 thousand of cash, after receiving dividends from holdings, selling part of the ONE stake, and paying its own dividend.

What is still not clean is exactly what the market needs to resolve. In 2025 Mihshuv Yashir both sold 1.72% of ONE for about NIS 100 million and was diluted to 34.88% after ONE completed a private placement of NIS 175 million. Both moves improved liquidity, but they also made the core point sharper: Mihshuv Yashir shareholders do not have a full direct exposure to ONE’s growth anymore, and value created inside ONE still needs to move through dividends, buybacks, or further stake monetization before it becomes accessible upstairs.

That matters now because of the valuation gap. As of December 31, 2025, the market value of Mihshuv Yashir’s stake in ONE stood at roughly NIS 2.26 billion. In the trading snapshot from early April 2026, Mihshuv Yashir itself was valued at about NIS 1.06 billion. These are not the same dates, so this is not a full NAV bridge, but the gap is large enough to explain why the market is not reading the company purely through ONE’s growth rate. It is reading it through accessible value, thin liquidity, and the holdco layer.

The right lens here is therefore technology with a holdco overlay. ONE is the operating engine, Mihshuv Yashir is the public vehicle through which shareholders are supposed to benefit from that engine, and the active bottleneck is not debt or covenant room. It is the translation of operating growth into upstream shareholder value.

This chart matters because it captures the difference between growth in scale and growth in quality. 2025 was a strong year in turnover, but not a year of better unit economics.

Events And Triggers

The stake sale upstream: On August 27, 2025, Mihshuv Yashir sold 1.72% of ONE at NIS 81.2 per share for total proceeds of about NIS 100 million. In December 2025 it paid about NIS 20.1 million of tax on that sale. This is the classic two-sided holdco move: it monetizes value and strengthens the parent, but it also lowers direct exposure to the main growth engine.

ONE’s private placement: On December 24, 2025, ONE placed 1,933,702 shares for NIS 175 million. The move strengthened ONE’s equity, which rose to NIS 1.028 billion, and further improved its balance-sheet flexibility. But the cost at the Mihshuv Yashir layer is obvious: the direct stake dropped to 34.88%. In other words, the operating layer benefited from fresh capital while parent shareholders got slightly less direct participation in future ONE growth.

The ONE Line acquisition: In April 2025, ONE acquired 100% of ONE Line for NIS 33.7 million. For the thesis, this is one of the key transactions of the year because it materially enlarges the BPO and customer-service arm. That adds scale and backlog, but it also pushes the group deeper into labor-intensive, tender-driven activities. That is exactly why 2025 looks better in revenue than in margins.

After the balance sheet: On March 15, 2026, ONE approved a dividend of NIS 42.3 million, of which Mihshuv Yashir’s share is about NIS 14.8 million. On the same day, ONE also approved a buyback program of up to NIS 50 million that had not yet been executed as of the report date. On March 30, 2026, Mihshuv Yashir itself approved a NIS 15.1 million cash dividend. These are important market signals: anyone looking for proof that value can move upstream should start here.

An external confirming signal: On September 18, 2025, ONE’s Aa3 stable rating was reaffirmed. This is not the thesis by itself, but it reinforces an important point: the current friction is not about financial survival. It is about value translation.

Efficiency, Profitability, And Competition

The central story of 2025 is a scale year, not a margin year. Group revenue rose to NIS 4.654 billion, but gross profit rose only 9.0% and gross margin fell from 15.0% to 14.0%. Operating profit rose just 7.5% and operating margin fell from 8.1% to 7.5%. That is not the behavior of a company strengthening pricing power. It is the behavior of a company growing through volume, acquisitions, and mix.

Where The Growth Actually Came From

The solutions and technology-services segment remained the core of ONE, with NIS 2.798 billion of revenue, or about 60.1% of the total, and segment profit of NIS 229.6 million. Infrastructure and computing generated NIS 1.354 billion, about 29.1% of the total, and segment profit of NIS 103.1 million. BPO and support centers are still smaller in revenue terms, at NIS 499.3 million, but that is where the fastest movement happened.

What really matters is that all three major segments grew, but all three also saw weaker margins. In solutions and technology services, the segment margin fell from 8.8% to 8.2%. In infrastructure and computing, it fell from 8.1% to 7.6%. In BPO and support centers, it fell from 10.4% to 8.3%. The implication is clear: 2025 produced more activity, but every new shekel of revenue carried less operating profit than in 2024.

BPO: The Big Number Is Not The Full Story

The most visible jump was in BPO and support centers. Revenue in that segment jumped 59.2% to NIS 499.3 million, but segment profit rose only 27.2% to NIS 41.4 million. That is already a first indication that the growth came with less clean economics than the headline suggests.

The backlog in the segment looks very strong at first sight, NIS 1.392 billion at the end of 2025 versus NIS 443.6 million a year earlier. But that figure should not be read at face value. Only NIS 864.6 million of the backlog is classified as binding, while NIS 527.6 million is classified as non-binding. On top of that, the company explicitly says that a large part of the contractual base includes customer termination rights with notice, and that in some cases it includes revenue for which there is no formal order yet, based on work already started or on prior customer behavior.

That means the backlog is a good indicator of scale and market penetration, but it is not the same thing as hard industrial backlog with limited exit options. That difference matters, especially in a business tied to tenders, public-sector customers, and aggressive competition.

Competition, Customers, And Suppliers

On the customer side there is a real point of strength. In 2023 through 2025, ONE had no customer that accounted for more than 10% of revenue, and no customer balance represented 10% or more of total receivables. That reduces the single-anchor-customer risk.

But instead of customer concentration, the company has sector and tender concentration. The government and public sector represented about 38% of ONE’s sales in 2025, and the company also notes that government IT budgets represent about 31% of revenue. That is both a cushion and a risk. It is a cushion because these customers tend to be relatively stable even in difficult periods. It is a risk because state budgets, tender renewals, and follow-on wins are part of the economics of the business, not background noise.

On the supplier side, dependence is not exclusive, but it is clearly present. In software, the company highlights dependence on Microsoft and IBM. In hardware, it highlights HPE, Lenovo, and HPI, while the agreements are non-exclusive. That means the company is not locked into a single supplier, but it also does not enjoy the kind of exclusivity that would shield it from commercial pressure.

This chart is not meant to be a precise productivity measure, because it compares year-end headcount with full-year revenue, but the direction still matters. Total workforce rose from 7,083 to 9,978, and almost all of that jump came from BPO. That helps explain why 2025 is increasingly looking like a transition year toward a more labor-intensive mix.

Cash Flow, Debt, And Capital Structure

Here it is essential to separate two different cash views. At the consolidated level, the question is balance-sheet strength. At the Mihshuv Yashir shareholder level, the question is how much cash is actually accessible at the parent. Those are not the same thing.

What Really Belongs To Mihshuv Yashir Shareholders

Anyone looking only at consolidated profit misses the core structure. Group net profit in 2025 was NIS 274.1 million, but profit attributable to the controlling shareholders was just NIS 97.4 million. The rest, NIS 176.7 million, belongs to non-controlling interests. This is not an accounting footnote. It is the difference between ONE as an operating engine and Mihshuv Yashir as a listed security.

The same applies on the equity side. Mihshuv Yashir’s investment in ONE is carried in the parent books at NIS 352 million, including NIS 5.8 million of goodwill, while the market value of that stake at the end of 2025 was about NIS 2.26 billion. That is where both the opportunity and the frustration come from: the value exists, but the path to realization runs through capital allocation, distributions, buybacks, or more stake sales.

The Parent’s All-In Cash Picture

Here I am explicitly using an all-in cash-flexibility frame at the parent-company level, because that is the cash that really matters to Mihshuv Yashir shareholders. In 2025 the parent received NIS 64.4 million of dividends from holdings, sold ONE shares for NIS 100.1 million, generated a solo operating cash outflow of NIS 2.6 million, paid NIS 20.2 million of tax on the sale, repaid about NIS 11 million of debt, and distributed NIS 60.4 million of dividends.

The result matters. At year-end the parent had no bank debt, a short-term deposit of NIS 70.3 million, and NIS 742 thousand of cash. That is a much more comfortable flexibility picture than in 2024, but it rests on three sources that are external to the parent’s own ongoing operating activity: dividends, stake monetization, and capital-allocation discipline.

This chart intentionally ends at the cash balance only, so it does not show the short-term deposit as part of ending liquid assets. To read it correctly, it should be paired with the fact that the parent also held NIS 70.3 million in short-term deposits. The cash did not disappear. It was simply parked in another liquid bucket.

At The Group Level: Good Cash Flow, But Not Only Because Of Better Profitability

The group generated NIS 455.0 million of cash flow from operations in 2025 versus NIS 399.6 million in 2024. That is a good number, but it should not be attributed only to cleaner operations. Receivables rose by NIS 54.9 million, other receivables rose by NIS 26.9 million, and inventory rose by NIS 14.5 million. Those outflows were more than offset by a NIS 98.4 million increase in suppliers and a NIS 46.3 million increase in other payables and accruals. In other words, part of the cash-flow improvement also came from supplier financing, payroll liabilities, and working-capital timing, not only from better margin structure.

Even so, the balance sheet itself is strong today. The group has NIS 642.8 million of cash, NIS 79.3 million of short-term deposits, and NIS 161.6 million of bank debt. In its capital-management note, the company shows net surplus cash of NIS 481.2 million, versus NIS 217.3 million in 2024. Net surplus cash to equity rose to 43.1%. At ONE itself, equity stands at NIS 994 million versus a minimum covenant of NIS 100 million, and the equity-to-assets ratio is 36.7% versus a required 16%. In plain terms, there is no financing bottleneck here today.

Outlook And What Comes Next

Before looking into 2026, it helps to distill the four non-obvious points that this report really surfaces:

• The consolidated layer improved, but Mihshuv Yashir shareholders’ direct exposure to ONE actually became thinner, because better liquidity came together with a lower direct stake.
• 2025 was a scale year. All three major segments grew, but all three also saw weaker margins.
• The BPO engine became much larger, yet its backlog includes a large non-binding component and customer exit rights, so it is less rigid than the headline suggests.
• The market should look more closely at the fourth quarter than at the full year. At ONE, fourth-quarter revenue rose 16.4%, but operating profit fell 8.2% and net profit fell 7.9%.

2026 Looks Like A Two-Layer Proof Year

At the ONE level, 2026 is the year in which the 2025 acquisitions, especially ONE Line, need to convert from scale into profitability. If revenue keeps growing while margins in solutions, infrastructure, and BPO keep drifting lower, the market will start reading 2025 not as the start of a higher-quality phase, but as an expensive way to buy growth.

At the Mihshuv Yashir level, 2026 is the year in which value transfer from ONE needs to keep proving itself. ONE’s March 2026 dividend, Mihshuv Yashir’s share in it, and ONE’s buyback authorization are the first signals. But as long as the holdco layer still relies on dividends, management fees, and occasional stake sales, investors have to assess every such move through both sides of the equation: what it improves and what it dilutes.

What Must Happen Over The Next 2-4 Quarters

First, ONE needs to show that the new BPO scale is not coming at the expense of quality. That means segment margins should stabilize, the non-binding part of backlog should start turning into actual revenue, and cancellation behavior should remain contained.

Second, the core segments, solutions and infrastructure, need to stop losing margin. If 2026 again shows healthy top-line growth with continuing margin pressure, the market will increasingly treat ONE as an execution-heavy services platform rather than a technology group with improving pricing power.

Third, the upstream flow has to stay regular. A one-off dividend is helpful for a few days. A durable thesis needs continuity. That is why distributions and buybacks at ONE matter here more than another acquisition headline.

Fourth, the post-balance-sheet legal items need to stay contained. The class-action request above NIS 2.5 million and especially the foreign indemnity demand tied to a data-leak event are not yet the center of the story, but they are exactly the kind of issues that can move from noise to real risk if they start creating cash or regulatory uncertainty.

What The Market Could Miss On First Read

The first thing the market could miss is that the stronger balance sheet did not come out of nowhere. It was built from a mix of solid cash flow, partial monetization of ONE shares, and ONE’s private placement. In other words, 2025 materially improved flexibility, but it did not yet prove that the company can generate the same level of accessible value every year without leaning on capital moves.

The second thing is that short interest says almost nothing here. On March 27, 2026, the short position stood at just 342 shares, with SIR of 0.36 and short interest of 0.04% of float, versus a sector average of 0.72% and average SIR of 1.339. Anyone looking at the stock through a short-interest lens is probably looking in the wrong place. The practical constraint here is liquidity, not bearish crowding.

The third thing is that the softer operating line is already visible in the fourth quarter. If the next reports do not show some recovery in profitability, it will be hard to dismiss the issue as temporary integration noise.

Risks

The Holdco Layer Is Both The Asset And The Risk

Mihshuv Yashir exercises de facto control over ONE with only 34.88% of the equity. That gives it control without majority ownership, but it also creates a delicate structure: further dilution, different voting behavior at ONE, or changes in distribution policy could all undermine the holdco layer’s ability to realize the value sitting below.

Margin Pressure And Competition

Competition is aggressive in nearly every meaningful area, and especially in BPO. The company itself describes very tough competition in public and financial tenders. At the same time, changes in tech-labor conditions, wage pressure, and weaker IT budgets in both government and business customers can hurt both demand and margins.

FX, Suppliers, And Cyber

The infrastructure segment is exposed to the dollar through imported inventory. The company also highlights reliance on Microsoft and IBM in software, and on HPE, Lenovo, and HPI in hardware. Alongside that, cyber risk gets unusually broad attention in this year’s report, including a detailed description of defensive measures and a clear acknowledgement that no company can guarantee full prevention of cyber incidents.

The Legal Item That Should Not Be Skipped

After the balance-sheet date, a subsidiary received a letter from a foreign supplier after that supplier was asked by a foreign company to pay EUR 45 million in damages linked to a data-leak event. The supplier is demanding full indemnification from the subsidiary, while the subsidiary rejects liability. Two things matter here. First, there is currently no reliable estimate of the probability or actual exposure. Second, according to the reported subcontractor agreement, the subsidiary’s liability is capped at EUR 8 million, and the insurer has been notified. This is not the central thesis item today, but it clearly deserves monitoring.

Conclusions

Mihshuv Yashir is entering 2026 stronger on liquidity, with a better operating engine at ONE and a clean parent balance sheet. That is the positive side. The less comfortable side is that 2025 growth came together with weaker margins, a much heavier BPO footprint, and another reduction in direct exposure to ONE. That is why the market will not judge the company only on revenue growth. It will judge it on whether value created at ONE keeps moving upstream.

Current thesis: Mihshuv Yashir now holds a stronger and more liquid operating asset, but what still separates a good thesis from a cleaner one is the holdco layer and the ability to turn ONE’s growth into accessible value for the parent shareholders.

What changed: 2025 strengthened both balance sheets and distribution capacity, but it also made it much clearer that the company is growing through scale and acquisitions, not through better margins.

Counter-thesis: If ONE keeps compounding at a double-digit pace, maintains regular distributions, and proves that the margin pressure is only temporary, the holdco discount can narrow without another major capital move.

What could change the market’s read: reports that show stable or improving segment margins, continued dividends from ONE, and limited noise around the post-balance-sheet legal item.

Why this matters: because this is no longer only a question of whether ONE is a good business. It is a question of whether Mihshuv Yashir shareholders are getting enough of that business.

The hurdle for the next 2-4 quarters is straightforward. For the thesis to strengthen, ONE needs to show that the 2025 acquisitions generate not only revenue but more stable margins, that BPO backlog converts into revenue without lower quality, and that the dividend and buyback pattern keeps turning upstream value into something accessible. What would weaken this read is another round of revenue growth with further margin erosion, or legal and regulatory noise that starts to eat into the balance-sheet advantage.