Elm (7203) Q2 2026 earnings summary

Executive summary

• H1 2026 revenue reached SAR 4,997.1 million, up 21.2% year-over-year; net profit was SAR 1,166.2 million, up 7.5%.

• Thiqah integration drove major contract wins and revenue synergies, while project growth moderated with government spending patterns.

• Strategic execution included expanded government partnerships, national projects, digital solutions and AI-enabled applications; priorities include further AI investment and flexible business models.

• Sahel Al Madar Trading Company acquisition increased ownership to 60%, with results consolidated from February 2026.

Financial highlights

• H1 revenue was SAR 4,997.1 million versus SAR 4,122.2 million; gross profit was SAR 2,079.3 million versus SAR 1,688.6 million; operating profit was SAR 1,138.1 million versus SAR 984.5 million.

• Q2 revenue and gross profit each rose 12% year-over-year, EBIT increased 3%, and net profit declined 13% due to zakat expense and absence of a prior-period reversal.

• Operating expenses grew 33.7% to SAR 941 million, reflecting employee costs, depreciation and amortization, and selling and marketing expenses; net profit growth also faced higher finance and zakat costs, partly offset by a SAR 59 million fair-value gain.

• Basic EPS rose to SAR 15.01 from SAR 13.95.

• Thiqah contributed SAR 664 million in revenue and SAR 155 million in gross profit; Madar contributed SAR 14 million in revenue.

Outlook and guidance

• 2026 revenue growth guidance remains 17–19%, versus H1 actual growth of 21%.

• EBIT margin guidance remains 21–23%, versus H1 actual of 23%.

• Cash flow from operating activities as a percentage of net income is guided at 85–95%; H1 actual was 35%, reflecting working capital movements.

• Priorities include further AI investment and more flexible business models to pursue future opportunities and digital transformation.