Tadawul Group Net Profit Drops 35% in Nine Months

Riyadh, Saudi Arabia — Saudi Tadawul Group Holding reported a sharp decline in profitability for the first nine months of 2026. Net profit attributable to shareholders fell 34.6% to 195.8 million SAR, down from 299.4 million SAR in the same period of 2025. Lower trading activity across capital markets drove the result, squeezing revenue and compressing margins across most business segments.

Quarter-by-Quarter Breakdown

The third quarter of 2026 told a similar story. Revenue came in at 292.2 million SAR, falling 8.1% from Q3 2025 and 9.4% from Q2 2026. Net profit dropped 41.8% year-over-year to 48.1 million SAR, and 47.8% compared to the prior quarter. Operating profit collapsed 53.2% year-over-year to just 29.5 million SAR. Rising depreciation and amortization costs were a key culprit, increasing operating expenditures by 3.1% even as other costs fell.

Key Drivers

• Capital Markets revenues fell 13.4% year-over-year to 249.7 million SAR, hurt by an 11.1% drop in average daily traded values and a 14.3% decline in listing services revenue.
• Post-Trade Services revenues declined 5.7% to 459.0 million SAR, pressured by the same trading slowdown and a 16.7% drop in treasury income from clearing businesses.
• Data and Technology Services was the lone bright spot, growing 5.8% to 200.6 million SAR, driven by co-location and market information services.
• EBITDA fell 20.0% to 263.2 million SAR, compared to 329.0 million SAR a year earlier.
• Gross profit declined 15.5% to 442.9 million SAR for the nine-month period.
• Earnings per share dropped to 1.63 SAR from 2.50 SAR — a 34.6% decline.

What This Means for Investors

• Trading volumes are the engine of Tadawul Group’s business. An 11.1% drop in average daily traded values this year has cascaded through capital markets and post-trade revenues simultaneously.
• Depreciation and amortization costs are rising, not falling — they increased operating expenditures by 7.5% in the nine-month period even as underlying costs grew only 1.6%. That gap will persist as long as the Group continues investing in infrastructure.
• Data and Technology Services now represents a meaningful hedge. Its 5.8% revenue growth shows the Group’s diversification strategy is producing results, though not yet enough to offset the trading slowdown.
• Shareholders’ equity fell 4.3% to 3,205.0 million SAR. Combined with a declining earnings-per-share figure, the Group faces pressure to demonstrate a path back to revenue growth before market confidence erodes further.

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THE SAUDI STANDARD’S VIEW: TADAWUL GROUP’S PROFIT SLIDE REVEALS THE COST OF MARKET DEPENDENCY

Saudi Tadawul Group’s nine-month results are a reminder that even the infrastructure underpinning a capital market is not immune to the cycles within it. A 34.6% collapse in shareholder net profit is not a rounding error — it is a structural signal that demands careful reading by every investor with exposure to Saudi financial services.

• VOLUME DEPENDENCY REMAINS THE CENTRAL VULNERABILITY

When average daily traded values contract by double digits, the damage radiates simultaneously through Capital Markets and Post-Trade revenues, compressing profitability across the Group’s two largest business pillars at once. This concentration of income around trading activity creates an amplified earnings response to relatively modest shifts in market sentiment. Until that dependency is structurally reduced, the Group’s bottom line will remain hostage to investor participation rates.

• RISING DEPRECIATION IS A HIDDEN MARGIN THREAT

Accelerating depreciation and amortization costs are widening the gap between gross revenue performance and operating profit, with operating income falling more than twice as fast as revenue on a year-over-year basis. This pattern reflects the financial weight of ongoing infrastructure investment, which is necessary but not yet revenue-generative at the pace required to offset its cost. Investors should treat operating profit — not gross profit — as the more reliable indicator of underlying business health going forward.

• DATA AND TECHNOLOGY SERVICES SIGNALS A CREDIBLE DIVERSIFICATION PATH

The 5.8% revenue growth recorded in Data and Technology Services, driven by co-location and market information demand, demonstrates that the Group’s non-transactional income streams are gaining commercial traction. This segment operates independently of daily trading volumes, providing a degree of earnings insulation that the rest of the business currently lacks. Scaling this division faster is not merely a diversification strategy — it is the most viable route to structural margin recovery.

• EQUITY EROSION ADDS PRESSURE TO THE RECOVERY TIMELINE

A 4.3% decline in shareholders’ equity, combined with earnings per share falling from 2.50 SAR to 1.63 SAR, narrows the Group’s buffer against continued underperformance and tightens the timeline for demonstrating a credible growth trajectory. Market confidence in exchange-operator equities tends to deteriorate faster than fundamentals alone would suggest, as investors price in the risk of prolonged low-volume environments. Management must articulate a concrete path to revenue recovery, not simply await a market upturn.

Saudi Tadawul Group sits at the operational heart of Vision 2030’s financial market ambitions — its infrastructure underpins the privatization listings, foreign investor access, and capital market deepening that the transformation agenda depends upon. The current earnings pressure does not undermine that strategic role, but it does underscore that the Group itself must evolve from a transaction-dependent business into a diversified financial infrastructure platform. The Data and Technology Services trajectory points in the right direction; the pace of that evolution will determine whether Tadawul Group grows with Vision 2030 or simply enables it from the sidelines.