Saudi Azm Profit Jumps 23% on New Projects

Riyadh, Saudi Arabia — Saudi Azm for Communication and Information Technology posted a net profit of 17.3 million SAR for the quarter ended September 30, 2026. That marks a 23% rise from 14.06 million SAR in the same quarter last year. Revenue drove the gain, surging 49.3% year-on-year as the company secured new contracts and extracted more from existing ones.

Quarter-on-quarter, net profit also climbed — up 6.5% from 16.25 million SAR in Q2 2026. Revenue rose 20.1% from 86.96 million SAR in the prior quarter. Both trends point in the same direction: Saudi Azm is converting a growing project pipeline into real earnings momentum.

Quarterly Breakdown

Revenue reached 104.42 million SAR this quarter, compared with 69.95 million SAR a year ago and 86.96 million SAR last quarter. Gross profit grew to 33.76 million SAR from 24.75 million SAR a year earlier — a 36.4% jump. Operating profit hit 17.3 million SAR, up 42.9% year-on-year. Total shareholders’ equity rose to 211.16 million SAR, a 35.3% increase from 156.1 million SAR a year ago. Earnings per share came in at 0.30 SAR, up from 0.24 SAR in the same period last year.

Key Drivers

• Gross profit rose 9.01 million SAR year-on-year, directly tied to the revenue surge from new and existing projects.
• Zakat and income tax expenses fell 0.44 million SAR year-on-year, providing a modest but real bottom-line lift.
• Operating expenses increased 3.81 million SAR year-on-year, partially offsetting gross profit gains.
• Other income declined 1.08 million SAR year-on-year, a drag on net profit growth.
• Share of results from investments in associates fell 0.46 million SAR year-on-year.
• Finance costs edged up 0.04 million SAR year-on-year.

What This Means for Investors

• Saudi Azm’s revenue growth is accelerating — a 49% year-on-year jump is substantial for a technology services company and suggests a strengthening order book.
• Net profit growth lagged revenue growth, held back by rising operating expenses. Investors should watch whether cost discipline tightens as the revenue base expands.
• Shareholders’ equity has grown 35% year-on-year, signaling a healthier balance sheet and improved capacity to take on larger contracts.
• The external auditor issued an unmodified conclusion — the financials carry no qualifications or red flags.

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THE SAUDI STANDARD’S VIEW: SAUDI AZM’S MOMENTUM SIGNALS DEEPER IT SECTOR MATURITY

Saudi Azm’s third-quarter results are more than a single company’s earnings beat — they reflect the broader acceleration of technology services demand across the Kingdom. With revenue crossing 104 million SAR on the back of new contract wins and deeper engagement with existing clients, Saudi Azm is demonstrating that domestic IT services companies can scale meaningfully within a single fiscal year. Investors should read this as a structural signal, not a seasonal spike.

• REVENUE QUALITY MATTERS MORE THAN HEADLINE GROWTH

A 49% year-on-year revenue surge is exceptional by any measure, but the composition of that growth deserves scrutiny. Growth driven by both new contract acquisition and deeper monetization of existing relationships suggests a diversified and relatively durable revenue base. Companies that grow revenue through multiple channels simultaneously tend to sustain that momentum more reliably than those dependent on single large contracts.

• MARGIN COMPRESSION WARRANTS MONITORING

Gross profit grew 36.4% year-on-year while revenue grew 49.3% — a gap that indicates rising delivery costs are absorbing a portion of top-line gains. Operating expenses also increased materially, partially eroding the gross profit advantage. For investors focused on long-term value creation, the key question is whether Saudi Azm can leverage its expanded revenue base to drive operating efficiency as the project portfolio matures.

• BALANCE SHEET STRENGTH OPENS STRATEGIC OPTIONS

A 35% year-on-year rise in shareholders’ equity to 211 million SAR is a meaningful development for a mid-sized technology services firm. A stronger equity base not only reduces vulnerability to financing pressures but also positions the company to pursue larger government and enterprise contracts that require demonstrated financial capacity. This balance sheet trajectory is a competitive asset in a market where contract awards increasingly favor financially stable vendors.

• COST STRUCTURE DISCIPLINE IS THE NEXT TEST

Declining zakat and tax expenses provided marginal bottom-line relief, but falling associate income and reduced other income reveal that non-core earnings are becoming a less reliable buffer. As the company’s operational scale increases, investors should expect management to demonstrate that core project profitability — not ancillary income — is driving net profit expansion. The coming quarters will test whether earnings growth can keep pace with revenue growth on a sustainable basis.

Saudi Azm’s performance aligns directly with Vision 2030’s ambition to build a knowledge-based economy anchored by homegrown technology and digital infrastructure companies. As government digitization programs deepen and private sector IT adoption accelerates, domestically listed technology services firms with proven contract execution capabilities are positioned to be consistent beneficiaries of this structural shift. Saudi Azm’s expanding order book and strengthening equity position make it a company worth watching closely as the Kingdom’s digital transformation moves from policy into procurement.