Contact:
Katharine Hanley
Director, IR/PR
Magic Software Enterprises, Ltd.
(949) 250-1718 ext. 220
khanley@magic-sw.com

Israel Teiblum
President and CFO
Magic Software Enterprises, Ltd.
+972-3-538-9311 or 9489
iteiblum@magic-sw.com


MAGIC SOFTWARE ENTERPRISES
REPORTS THIRD QUARTER 2000 RESULTS

Revenues up More Than 55% Over Last Year 
as Company Continues to Aggressively Invest 
in Worldwide Solutions Business

Conference Call to be Held Tuesday, November 7, 2000

OR YEHUDA, ISRAEL (November 6, 2000) - Magic Software Enterprises,
Ltd. (Nasdaq: MGIC), a leading provider of state-of-the-art technology
and business solutions, reported results today for the third quarter
ended September 30, 2000. Despite declining tools sales, significant
growth in the Company's North American revenues led the Company to
post record sales for the quarter.

Third Quarter Results
Total revenues for the third quarter 2000 were $25.46 million as
compared to $16.41 million for the comparable three-month period in
1999, an increase of 55.2% over last year and a 26.9% increase over
revenues posted in the second quarter of 2000.  Approximately 40% of
total revenues was derived from North America, up from about 12% for
the same quarter of 1999.

Net income for the quarter dropped to $1.16 million ($0.04 earnings
per share) from the $3.41 million ($0.14 earnings per share) posted
for the corresponding period of 1999.  The drop in earnings was the
result of the Company's continued aggressive investment in growing its
worldwide presence in the e-commerce and customer relationship
management (CRM) solutions marketplaces.

"In today's economy, it takes more than a portfolio of award-winning
products to successfully enter a new marketplace. Recognition and
marketshare come at the price of some pretty aggressive investment --
in people, in procedures and in promotion," said Dan Goldstein,
chairman of Magic.  "Through the end of this year, we are committed to
making whatever investment is necessary to ensure Magic's long-term
success as one of the world's leading solutions providers.  In spite
of these investments, however, we will make every effort to ensure
that fourth quarter results are in line with those posted in this
quarter."

Software license sales, which include the Magic core technology and
applications, were $8.77 million for the third quarter, representing
34.4% of total revenues.  Application license sales, at $3.72 million
for the period, accounted for 42.4% of total software sales.  To date,
Magic has closed more than 100 solutions sales around the world.

Maintenance and support revenues, representing 11.0% of total revenues
for the quarter, were up 19.6% when compared to the same period last
year, while consulting and training revenues at  $13.89 million were
up 217.2% compared to the third quarter of 1999 and represented 54.6%
of total revenues.  The increase in consulting and training revenues
is consistent with Magic's entry into the solutions marketplace.

Operating income declined to 1.5% of total revenues, compared to 18.3%
of total revenues in the same period last year, while net income fell
to 4.6% of revenue, compared to 20.8% of revenue in the same period of
1999.   According to Goldstein, these results were due mainly to the
growth in consulting revenues as a percentage of total revenues, and
the decrease in tool sales.

"We expect to see renewed strength in tool sales in early 2001 when we
introduce the next revolutionary version of our core technology,"
added Goldstein.

Entering the fourth quarter, Magic already has announced several
significant e-commerce and CRM solutions sales, which would indicate
that the Company's long-term strategy is beginning to take hold.

Third Quarter Developments
Management Changes
During the third quarter, Magic announced the appointment of Dan
Goldstein, chairman of Formula Systems Ltd. (Nasdaq: FORTY), as its
chairman.  Formula Systems Ltd. is Israel's largest publicly traded
information technology company and a majority owner of Magic.
Goldstein replaced David Assia, who assumed the role of
vice-chairman.

Acquisitions
With respect to acquisitions during the quarter, Magic completed its
purchase of 100% of CoreTech Consulting Group, Inc. (CoreTech), a
leading provider of e-business professional services in North America.
CoreTech adds depth to the Company's consulting and professional
services capabilities, as well as gives Magic access to an impressive
client base that includes several leading FORTUNE 500 and
middle-market companies.

Stock BuyBack
Also during the quarter, Magic announced plans to continue the stock
buyback program previously announced during the second quarter of
2000.  The Company has now concluded that buyback, resulting in
Magic's repurchase of 672,150 shares of the Company's common stock.

Deals
Magic signed several important deals, and completed several key
implementations, during the third quarter.  Chief among them were
state-of-the-art solutions for Satyam, an international IT solutions
provider;  Sunbooks Ltd., one of the largest book wholesalers in
Hungary; Toyo Information Systems Co., Ltd., a diversified information
services provider that specializes in supporting the IT requirements
of Japanese companies worldwide; PAC 2000A Coop. Associates s.r.l.,
one of Italy's largest food chains; and Proxima Informatica Srl, a
wholly-owned subsidiary of IBM and the largest ERP integrator in
Southern Europe.

Magic is using its Magic eService(tm) Web-based customer service
management system initially to provide internal support for Satyam's
European office.  In addition, however, Satyam plans to promote Magic
eService to its customers as part of its ASP offerings.

For Sunbooks, Ltd., Magic is working with IBM to deliver the largest
Hungarian e-business project to date.  The Sunbooks solution, to be
called Sunbooks Systems, will enable publishers, bookstores, schools
and other institutions to conduct business over the Web.

Using Magic eMerchant(tm), the Company's award-winning e-commerce
template, Magic has built an unique e-tailing solution for Toyo
Information Systems.  Called TISTrade, the solution makes it easier
and more profitable for manufacturers and retailers outside of Japan
to sell to consumers in that country.

For PAC 2000A, Magic eMerchant  has been used to develop Italy's first
Web-based solution for supply chain management.  The solution enables
PAC 2000A to efficiently manage the more than 150 complex promotional
initiatives used to promote sales of the membership's foodstuffs to
more than 1,0000 supermarkets.

Under the terms of a partnership agreement signed with Proxima
Informatica Srl, Magic will use its state-of-the-art technology to
develop and implement a highly targeted salesforce automation
application for the Italian market that integrates with JD Edwards ERP
systems, as well as Magic's own CRM suite of products.

Other solutions sales during the quarter included:
* Magic eMerchant - Betagro Holding Company Ltd., Better Pharma
Company Ltd. and Solution Corner Company Ltd. (Thailand)
* Magic eService - Hospitality I.S. (Australia); Axoxs Co. (USA); and
Dakoda GmbH, Indecom and LCIG GmbH (Germany)
* Magic eContact(tm) - Datamat Public Co., Ltd. (Thailand); and Arval
Service Lease Italia S.p.A. (Italy)

Conference Call
Magic will host a conference call Tuesday, November 7, 2000, at 11:00
a.m. EST (8:00 a.m. PST) to discuss the Company's third quarter
financial results.  To participate, interested parties should call the
appropriate number listed below five to ten minutes prior to the start
of the call:

		North America		(800) 230-1766
		International			(612) 332-0632

Callers should reference "Magic Software Q3 Earnings Conference Call"
with the AT&T Operator.

A replay of the conference call will be available from 2:30 p.m. EST,
November 7, 2000, through 11:50 p.m. EST, November 14, 2000.
Interested parties should call the appropriate number below:

		North America		(800) 475-6701
		International			(320) 365-3844

Callers should reference Access Code No. 545222.

Investors also will have the opportunity to listen to the conference
call over the Internet through Vcall, a service of the Investor
Broadcast Network, at http://www.vcall.com.  To listen to the "live"
call, investors should go to the Website at least fifteen minutes
early to register, and download and install any necessary audio
software.  For those who cannot listen to the live Internet broadcast,
a replay of the conference call will be available for up to 90 days on
the Vcall Website.


About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Group (Nasdaq:
FORTY), develops, markets and supports software development and
deployment technology that enables enterprises to accelerate the
process of building and deploying applications that can be rapidly
customized and integrated with existing systems.  Magic technology,
applications and professional services are available through a global
network of subsidiaries, distributors and Magic solutions partners in
approximately 50 countries.  The Company's North American subsidiary
is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone
(949) 250-1718, fax (949) 250-7404, http://www.magicsoftware.com.

The Formula Group is an international information technology company
principally engaged, through its subsidiaries and affiliates, in
providing software consulting services, developing proprietary
software products and producing computer-based solutions.

Except for the historical information contained herein, the matters
discussed in this news release include forward-looking statements that
may involve a number of risks and uncertainties.  Actual results may
vary significantly based upon a number of factors including, but not
limited to, risks in product and technology development, market
acceptance of new products and continuing product conditions, both
here and abroad, release and sales of new products by strategic
resellers and customers, and other risk factors detailed in the
Company's most recent annual report and other filings with the
Securities and Exchange Commission.


Unaudited Consolidated Statement of Operations
(US Dollars in Thousands) 

Three Months ended
September 30,


Nine Months ended 
September 30,


2000
1999
2000
1999
Revenues




  Software sales
$5,050 
$8,751 
$21,322 
$25,170 
  Applications
3,718
934
10,252
934
  Maintenance
2,804
2,345
8,392
6,870
  Consultancy & other services
13,890
4,379
27,205
12,389
Total Revenues
25,462
16,409
67,171
45,363





Cost of Revenues




  Software sales
836
784
2,761
2,601
  Applications
556
282
1,460
282
  Maintenance
1,047
911
3,206
2,570
  Consultancy & other services
8,743
2,705
17,096
8,082
Total Cost of Revenues
11,182
4,682
24,523
13,535





Gross Profit
14,280
11,727
42,648
31,828





Research & development, net
1,569
837
4,160
2,131
Sales, marketing, and general 
  & administrative expenses 
10,846
7,371
29,484
20,834
Depreciation
384
303
1,054
829
Amortization
1,090
214
2,172
502
Operating Income
391
3,002
5,778
7,532





Financial (income) expenses, net
(698)
(524)
(2,105)
7
Income before taxes
1,089
3,526
7,883
7,525
Taxes on income
25
69
275
131
Income before minority
  interest
1,064
3,457
7,608
7,394
Minority interest in losses
  (income) of subsidiaries
100
(128)
(470)
(417)
Equity in earnings (losses) of 
  affiliate
-
81
(57)
126
Net Income 
$1,164 
$3,410 
$7,081 
$7,103 





Basic Earnings per Share
$0.04 
$0.14 
$0.24 
$0.30 
Diluted Earnings per Share
$0.04 
$0.13 
$0.23 
$0.28 





Weighted Average Number of Shares
    Outstanding (000)
29,996
24,159
29,055
23,841
Diluted Weighted Average Number of
    Shares Outstanding (000)
31,127 
25,755 
30,441
25,224 


Unaudited Balance Sheets (US Dollars in Thousands)



September 30
2000
December 31
1999
Assets


Current Assets


Cash and cash equivalents
$54,596
$8,298



Accounts receivable :


  Trade receivables
24,660
16,111
  Related parties
267
45
  Other receivables and prepaid 
      expenses      
8,160
4,958
   Inventory
396
188
Total Current  Assets
$88,079
$29,600



Severance pay fund
$1,975
$1,507
Investments in affiliated companies
60
376
Fixed assets, net
10,443
8,649
Other assets, net
52,592
16,762
Total Assets
$153,149
$56,894



Liabilities


Current Liabilities


Short-term bank debt
$2,824 
$628 
Trade payables
8,161
4,518
Accrued expenses and other 
  liabilities
17,278 
14,787 
Total Current Liabilities
$28,263 
$19,933 



Long-term loans
$927 
$295 
Accrued severance pay
3,432 
1,899 
Minority interests
134
973



Shareholders' Equity


Share capital
800
712
Capital surplus
116,987
34,413
Treasury stock
(3,144)
-
Retained earnings
5,750
(1,331)
Total Shareholders' Equity
$120,393
$33,794

$153,149 
$56,894