Systems (SYS) Q1 2025 earnings summary

Executive summary

• Q1 consolidated revenue rose 19.0% YoY to Rs 18.08bn; operating profit increased 24.3% to Rs 2.47bn, the highest quarterly level in absolute terms.

• Net profit increased 59.2% to Rs 2.50bn, partly reflecting a prior-year exchange loss; excluding currency fluctuations, profit after tax grew 32.5%.

• Services revenue grew YoY and QoQ despite elevated Q4 2024 transactional revenue; results absorbed annual wage inflation without significant currency gains.

Financial highlights

• Consolidated gross profit rose 26.3% YoY to Rs 4.55bn; basic and diluted EPS increased 58.4% to Rs 8.54 and 58.2% to Rs 8.47, respectively.

• Standalone revenue increased 19.0% to Rs 10.90bn; gross profit rose 18.2% to Rs 2.72bn and operating profit increased 13.3% to Rs 1.76bn.

• Standalone profit after tax reached Rs 2.01bn, up 62.4% reported; adjusted for currency fluctuations, profit after tax increased 26.6%.

• Standalone basic and diluted EPS were Rs 6.85 and Rs 6.80, up 61.6% and 61.5%, respectively.

Outlook and guidance

• Pakistan operations are expected to break even by the end of H1/Q2 and become profitable in H2; margins are expected to expand as revenue scales.

• A healthy backlog and Q1 bookings support planned growth; ~90% of revenue, including Pakistan revenue, is foreign-currency denominated, and 85%–90% of business comes from enterprise clients.

• Plans include AI-enabled automation and AI-as-a-Service, with use cases tailored to BFSI, Telco, Retail and CPG; large deals, partnerships and M&A opportunities are also being pursued.

• APAC is showing renewed opportunities, MEA/GCC are on a strong growth path, and US and Europe are expected to sustain growth; unprofitable Pakistan contracts are being phased out.

• Global shared services are expanding into consultancy and solution selling, including finance, HR, legal and digital demand generation.