Solutions Grows Nine-Month Revenue 9.2% to 9.6B SAR

Riyadh, Saudi Arabia — Arabian Internet and Communications Services Company, known as Solutions, posted net profit of 1.241 billion SAR for the nine months ended September 30, 2026, up just 1.4% from 1.224 billion SAR a year earlier. Revenue rose 9.2% to 9.637 billion SAR, driven by Core ICT Services and IT Managed and Operational Services. Early retirement program charges and lower finance income weighed heavily on the bottom line, masking stronger underlying momentum.

Strip out the 23 million SAR in early retirement costs this year and a 20 million SAR non-recurring fair value gain in the prior period, and adjusted net profit growth runs closer to 5%. That gap between revenue growth and earnings growth tells the real story here.

Quarterly Snapshot: Revenue Climbs, Profit Flat

In the third quarter alone, Solutions generated 3.394 billion SAR in revenue, up 9.6% year-on-year. Net profit attributable to shareholders came in at 417 million SAR — unchanged from the same quarter last year. Sequentially, revenue rose 4.7% from the 3.240 billion SAR posted in Q2 2026, but net profit fell 7.9% from 453 million SAR.

The sequential profit decline reflects a 45.4 million SAR drop in gross profit, as cost of revenues climbed 199.2 million SAR against a 153.8 million SAR revenue gain. An early retirement charge of 20 million SAR and a higher zakat and tax bill compounded the pressure. Operating expense savings — mainly a 50.8 million SAR reduction in selling and distribution costs — only partially offset these drags.

EBITDA for Q3 reached 580 million SAR, up 7.8% year-on-year. For the nine-month period, EBITDA rose 10.7% to 1.669 billion SAR from 1.508 billion SAR — a healthier trend than net profit suggests.

Key Drivers

• Core ICT Services revenue grew 20.0% in Q3 year-on-year and 19.8% for the nine-month period — the primary engine of top-line growth.
• Digital Services rose 4.9% in Q3 year-on-year and surged 32.5% sequentially, signaling accelerating demand.
• IT Managed and Operational Services contributed 11.9% sequential growth in Q3 and 1.5% nine-month growth year-on-year.
• Cost of revenues increased 260.7 million SAR in Q3 year-on-year and 677 million SAR over nine months, narrowing margin gains from higher sales.
• Early retirement program costs of 23 million SAR year-to-date did not appear in the prior-year comparative period.
• Other income swung from a 37 million SAR gain in the prior nine months to a 46 million SAR expense this period, largely due to lower finance income and the prior year’s non-recurring fair value gain.
• Total shareholders’ equity reached 4.491 billion SAR, up 12.5% year-on-year.

Earnings Per Share Adjustment

Following shareholder approval of a bonus share issuance after the period end, Solutions recalculated earnings per share under IAS 33. The weighted average share count used is 238.124 million shares, applied as if the bonus issuance occurred at the start of the earliest comparative period. Reported EPS for the nine months stands at 5.21 SAR, against a restated 5.14 SAR for the same period last year.

What This Means for Investors

• Revenue growth of 9.2% is real and broad-based, but cost pressures are rising faster than the headline suggests — investors should watch margin trends closely.
• The 5% adjusted net profit growth, excluding one-off items on both sides, is a more reliable baseline than the reported 1.4% increase.
• EBITDA growth of 10.7% over nine months outpaces net profit growth, pointing to healthy operating cash generation before non-cash and exceptional items.
• The bonus share issuance and restated EPS figures mean investors comparing per-share metrics should use the adjusted share count of 238.124 million for any historical analysis.

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THE SAUDI STANDARD’S VIEW: SOLUTIONS REVENUE SURGE MASKS A MARGIN STORY INVESTORS CANNOT IGNORE

Solutions has delivered another quarter of double-digit revenue expansion, confirming its position as one of Saudi Arabia’s most consequential technology services businesses. Yet the nine-month results demand a more disciplined reading than the headline figures suggest — because the distance between top-line growth and bottom-line delivery is widening in ways that carry strategic implications for shareholders.

• CORE ICT MOMENTUM IS STRUCTURAL, NOT CYCLICAL

Core ICT Services expanding at approximately 20% year-on-year for both the quarter and the nine-month period reflects sustained enterprise and government demand for digital infrastructure across the Kingdom. This is not project-driven volatility — it represents a durable shift in how Saudi organizations procure and operate technology. Investors should treat this segment’s growth rate as the most reliable indicator of Solutions’ long-term revenue trajectory.

• COST OF REVENUES IS THE CRITICAL VARIABLE TO MONITOR

Cost of revenues rose 677 million SAR over the nine-month period, outpacing the revenue gains that drove gross profit improvement. When input costs scale faster than sales in a services business, it signals either pricing pressure, a deliberate mix shift toward lower-margin contracts, or both. Until Solutions demonstrably arrests this dynamic, the gap between EBITDA growth and net profit growth will continue to frustrate investors seeking earnings leverage from revenue scale.

• EBITDA TELLS A MORE CREDIBLE OPERATIONAL STORY

Nine-month EBITDA growth of 10.7% to 1.669 billion SAR outpaces reported net profit growth by a significant margin, and that divergence is informative rather than alarming. Non-cash charges, the early retirement program, and the swing in other income are distorting the statutory profit line without touching operating cash generation. Investors focused on intrinsic business quality should anchor their analysis to EBITDA and adjusted net profit of approximately 5% growth rather than the reported 1.4%.

• BONUS SHARE ISSUANCE RESETS THE PER-SHARE BASELINE

The retroactive restatement of EPS under IAS 33 following the bonus share issuance is a technical but consequential adjustment for portfolio managers running historical comparisons. With the weighted average share count now fixed at 238.124 million shares across all comparative periods, any valuation model using pre-restatement per-share data will produce distorted multiples. Shareholders who have not yet updated their models risk mispricing both current earnings yield and forward estimates.

Solutions is executing directly within the infrastructure of Saudi Arabia’s digital transformation agenda — the same agenda that Vision 2030 identifies as foundational to diversifying the economy beyond hydrocarbons. The company’s expanding managed services and digital services revenues are, in effect, a revenue stream linked to the Kingdom’s own modernization spend. As government and private sector technology budgets remain elevated and cloud adoption accelerates, Solutions is positioned to compound revenue growth for the foreseeable future. The near-term challenge — converting that growth into proportionate earnings — will determine whether the market awards the company the premium valuation its strategic position merits.