Arabian Internet and Communication Services (7202) Q1 2026 earnings summary

Executive summary

• Secured major contracts with National Water Company (SAR 520mn), Saudi Aramco (SAR 1.4bn), and stc (SAR 132.4mn), enhancing growth visibility and backlog.

• Board recommended a 100% capital increase via a 1-for-1 bonus share issue, funded from retained earnings, to support expansion and maximize shareholder value; capitalization of 1,200 million from retained earnings proposed.

• Maintained dominant market position in IT services in Saudi Arabia, with a large, diversified backlog and strong free cash flow generation.

• Revenue for the three months ended 31 March 2026 reached 3,002,477,000, up 6.3% year-over-year from 2,823,891,000.

• Net profit increased to 372,454,000, a 3.7% rise compared to 359,095,000 in the same period last year.

Financial highlights

• Revenue rose 6% year-over-year to SAR 3,002mn in 1Q26, driven by growth across all business segments.

• EBITDA increased 10% YoY to SAR 492mn, with EBITDA margin up 52bps to 16.4%.

• Net profit grew 3% YoY to SAR 370mn, with net profit margin at 12.3%.

• Gross margin declined 232bps YoY to 19.5% due to project mix and regulatory pricing changes.

• Capex dropped 69% YoY to SAR 18mn, reflecting normalization after elevated prior-year spending.

• Free cash flow improved to SAR 344mn, supported by stronger operating cash flow and working capital optimization.

• Gross profit was 585,768,000, down from 616,477,000 year-over-year.

• Operating profit rose to 399,038,000 from 371,150,000.

• Basic EPS increased to 3.11 from 3.03; diluted EPS to 3.09 from 3.01.

• Cash and cash equivalents at period end were 2,075,675,000, up from 1,748,973,000 at year-end.

Outlook and guidance

• Reiterated FY 2026 guidance: revenue growth of 6–8%, EBITDA margin of 14–16%, and capex intensity of 2–3%.

• The Board recommended an ordinary cash dividend of 8 per share (totaling 953 million), pending approval.

• On 12 April 2026, the Board proposed a 100% capital increase via bonus shares, subject to regulatory and shareholder approval.