Alkhaleej Training Swings to Loss in Q3 2026

Riyadh, Saudi Arabia — Alkhaleej Training and Education posted a net loss of 7.8 million SAR attributable to shareholders in the third quarter ending September 30, 2026. That compares to a net profit of 12.7 million SAR in the same quarter a year earlier — a swing of 20.5 million SAR. For the nine-month period, net profit collapsed 88.3% to just 3.7 million SAR, down from 31.3 million SAR a year ago.

Quarter and Period Breakdown

Quarterly revenue fell 11.9% year-on-year to 260.9 million SAR, and slipped 3.0% from the prior quarter’s 269.1 million SAR. Despite lower sales, gross profit rose 7.5% year-on-year to 50.4 million SAR, pushing the gross margin to 19% from 16% a year earlier. However, operating profit dropped 57.7% to 13.8 million SAR against the same quarter last year, and fell 53.3% from the prior quarter’s 29.5 million SAR.

Over the nine-month period, revenue fell 10.2% to 799.5 million SAR. Gross profit held nearly flat at 167.3 million SAR. Operating profit declined 25.8% to 66.8 million SAR. Earnings per share dropped to 0.06 SAR from 0.48 SAR a year ago. Total shareholders’ equity stood at 511.1 million SAR, essentially unchanged from 510.2 million SAR a year earlier. Accumulated losses reached 17.4 million SAR, equal to 3% of capital.

Key Drivers

• Contact Centers and IT: Revenue fell 53.4 million SAR year-on-year due to project award delays and a key contract not renewed. Management says this reflects a deliberate shift toward higher-margin work.
• Training: Revenue dropped 13.6 million SAR on lower activity and postponed contracts with private and public sector clients. The segment also absorbed startup costs from a new training project launched in the quarter.
• Schools: Revenue rose 28.0 million SAR year-on-year on higher student enrollment and better utilization. Sequentially, it fell 12.1 million SAR due to seasonal revenue recognition patterns.
• Universities: Revenue grew 4.0 million SAR year-on-year from stronger project activity, though it declined 1.7 million SAR from the prior quarter as one project concluded.
• Non-recurring items: Other income fell 18.3 million SAR year-on-year. The prior-year quarter included a one-time 16.6 million SAR gain from a school sublease that did not repeat.
• Credit and financing costs: Expected credit loss provisions rose 5.0 million SAR, and finance costs increased 3.2 million SAR, further pressuring the bottom line.

What This Means for Investors

• Thin profit cushion: Nine-month net profit of just 3.7 million SAR leaves almost no buffer. One more weak quarter could push Alkhaleej Training into full-year loss territory.
• Non-recurring distortion: Last year’s results included a 16.6 million SAR sublease gain. Stripping that out makes the year-on-year comparison less alarming — but the underlying profit trend is still weak.
• Margin improvement is real but insufficient: Gross margin expanded to 19% from 16%, yet rising credit provisions and finance costs consumed those gains before reaching net profit.
• Enrollment growth is the bright spot: Schools segment enrollment gains provide a structural tailwind. If the new training project and IT pipeline materialize, results could recover — but investors should wait for evidence, not promises.

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THE SAUDI STANDARD’S VIEW: ALKHALEEJ TRAINING’S LOSS SIGNALS STRUCTURAL STRESS IN EDUCATION AND IT SERVICES

Alkhaleej Training and Education’s swing to a quarterly net loss of 7.8 million SAR is more than a temporary earnings miss — it reflects the compounding pressure of revenue contraction, rising financing costs, and a business mix that has yet to complete its strategic transition. Investors must distinguish between what is cyclical, what is structural, and what management controls before drawing conclusions about long-term positioning.

• GROSS MARGIN GAINS ARE BEING DESTROYED BELOW THE LINE

The expansion of gross margin from 16% to 19% year-on-year demonstrates that Alkhaleej Training is successfully shifting toward higher-value work at the contract level. However, elevated credit loss provisions and rising finance costs are absorbing those efficiency gains entirely before reaching shareholders. Until cost discipline is applied across the full income statement, gross margin improvement alone cannot be treated as a recovery signal.

• REVENUE CONCENTRATION RISK IS A MATERIAL CONCERN

The Contact Centers and IT segment absorbed over 53 million SAR in year-on-year revenue loss driven by project delays and a single non-renewed contract — a concentration of risk that disproportionately destabilized the entire business. Companies competing for government and institutional IT contracts in Saudi Arabia face inherent award timing volatility, and Alkhaleej Training’s results demonstrate the earnings fragility that comes without sufficient contract diversification or pipeline depth.

• SCHOOLS ENROLLMENT GROWTH IS THE COMPANY’S MOST DURABLE ASSET

Rising student numbers in the Schools segment represent a structurally recurring revenue base that is far less susceptible to contract-cycle volatility than IT or training services. As private education demand continues to grow alongside Saudi Arabia’s expanding middle class and urbanization trends, this segment offers the most credible foundation for earnings stabilization. Investors should monitor enrollment trajectory and capacity utilization as leading indicators of medium-term recovery.

• ACCUMULATED LOSSES WARRANT BALANCE SHEET VIGILANCE

Accumulated losses reaching 17.4 million SAR — equivalent to 3% of capital — are not yet at a regulatory threshold that demands immediate action, but the direction of travel matters. With nine-month net profit standing at only 3.7 million SAR, the margin of safety heading into the fourth quarter is extremely narrow. Investors should assess whether operating cash flows are sufficient to service financing obligations without further equity erosion.

Alkhaleej Training operates in sectors — education, vocational training, and digital services — that sit at the core of Vision 2030’s human capital agenda. The Kingdom’s drive to localize its workforce, expand private schooling, and digitize institutional operations should, over time, generate structural demand tailwinds for a business of this profile. However, Vision 2030-aligned sectors are not immune to execution risk, and Alkhaleej Training’s current results are a reminder that strategic positioning must be matched by operational discipline and contract pipeline management. The investment case remains conditional on demonstrated improvement, not anticipated opportunity.