Elm (7203) Q2 2025 earnings summary

Executive summary

• Revenue for H1 2025 grew 21% year-over-year to SR 4,122 million, with net profit up 31% to SR 1,085 million and EPS rising to SR 13.95, driven by digital business growth and the Thiqah acquisition.

• Completed the acquisition of Thiqah Business Services Company in April 2025 for SR 3.39 billion, fully consolidated from May 2025.

• Digital business remained the primary revenue driver, contributing 72% of total revenue.

• Launched 14 new digital services and expanded internationally, including in Europe.

• Interim dividend of SR 310.8 million (SR 4/share) paid in March 2025.

Financial highlights

• Gross profit rose 27% year-over-year to SR 1,727 million, with gross margin improving to 41.9%.

• EBIT grew 23% to SR 985 million, maintaining a 24% margin despite higher operating expenses.

• Net profit margin improved to 26.3%, aided by a zakat reversal.

• Basic EPS increased 30.4% to SR 13.95.

• Total assets increased to SR 10,413 million as of June 30, 2025.

Outlook and guidance

• Updated 2025 revenue growth guidance to 33–35% including Thiqah, up from previous 14–16%.

• EBIT margin guidance raised to 22–24% from 21–23%.

• Depreciation and amortization expense expected to decrease by SR 38.9 million for the full year due to revised asset useful lives.

• Management confident in continued opportunities in AI and digital services, emphasizing ongoing investment in technology and talent.

• Cash flow from operating activities as a percentage of net income remains unchanged at 80–90%.