Systems (SYS) Q2 2026 earnings summary

Executive summary

• H1 2026 consolidated revenue rose 35.3% to Rs 49,715.86m; gross profit increased 36.6%, operating profit 28.6%, and profit after tax 17.4% to Rs 6,050.39m.

• Organic growth excluding FX and Confiz was 20%; reported expansion also included Confiz and BAT Shared Services.

• Export-led business remained central, with 94% of revenue foreign-currency based; enterprise AI implementation and geographic expansion were cited as growth opportunities.

Financial highlights

• H1 gross profit was Rs 12,688.39m, operating profit Rs 6,539.13m, and EBITDA Rs 7,803m; gross margin was 25.5% and EBITDA margin 16%.

• Q2 revenue and EBITDA each grew 39% and 32% YoY, respectively, in USD.

• Consolidated other income included a Rs 158.01m exchange loss versus a Rs 528.42m gain in H1 2025; total other income was Rs 567.05m.

• Standalone revenue grew 19.2% to Rs 25,898.15m; standalone profit after tax fell 13.7% to Rs 3,460.55m, reflecting exchange losses and lower related-party interest income.

• Consolidated operating cash flow was negative Rs 1,137.47m, versus positive Rs 3,074.29m in H1 2025.

Outlook and guidance

• Healthy backlog, targeted acquisitions, and new service lines support growth; Confiz integration is on plan, with synergies expected in H2.

• Confiz cross-selling and upselling are expected to broaden access to North American enterprise clients and diversify revenue.

• UK operations are being built as a European hub; APAC investments are advancing in Vietnam, Malaysia, and Indonesia, with a Malaysia delivery center under evaluation.

• Further M&A exploration focuses mainly on Western markets to expand in the US and Europe and balance geographic exposure.

• Management expects steady growth without a material dip in the monthly run rate; gross margin could reach 28%-29% with 2%-3% PKR devaluation, otherwise remaining near current levels.