Elm (7203) Q3 2024 earnings summary

Executive summary

• Revenue for the nine months ended September 30, 2024, reached SAR 5,278 million, up 25.3% year-over-year, with net profit rising to SAR 1,329 million, a 29.2% increase, driven by digital business and business process outsourcing segments.

• Launched Elm 4.0 strategy to expand into new government verticals and adjacent B2B markets, focusing on digitalization and R&D.

• Signed a 10-year agreement with the Saudi Data & AI Authority, ensuring business sustainability and growth in government products.

• Interim dividends totaling SAR 582.7 million were distributed during the period.

• The company showcased AI-driven solutions at major technology conferences and published its first Sustainability Report.

Financial highlights

• Gross profit for the nine months was SAR 2,199 million, up 27.7% year-over-year, with gross margin rising to 41.7%.

• EBIT for 9M 2024 was SAR 1,292 million, a 26.7% increase year-over-year, with operating margin at 24.5%.

• Net profit for 9M 2024 was SAR 1,329 million, up 29.2% year-over-year, with net margin at 25.2%.

• Basic EPS for the nine months was SAR 17.11, compared to SAR 13.25 last year.

• Cash and cash equivalents stood at SAR 603 million as of September 30, 2024.

Outlook and guidance

• Full-year 2024 revenue growth guidance is 22%-24%, with 9M 2024 already achieving 25%.

• EBIT margin guidance for 2024 is 22%-24%, with 9M 2024 at 24%.

• Cash flow from operating activities as a percentage of net income is guided at 80%-90%, but 9M 2024 achieved 50% due to income share settlements.

• Management remains committed to continued growth and excellence, focusing on digital transformation and sustainability.

• No new or amended IFRS standards are expected to materially impact future results.