Q2 2026 Arabian Internet and Communication Services Co Earnings Call

[Analyst] (SNB Capital): SNB Capital, I would like to welcome you to a conference call with Solutions Management regarding the financial results of Q2 2026. With us on call today, we have Mr. Abdullah Al-Dayal, GM of Corporate Finance and Investor Relations, Mr. Sulaiman Al Mahmoud, GM of Corporate Strategy Management, and Mr. Mohammed Urooj Khan, Finance Director. We'll first listen to the management's feedback. Following this, we will open the floor to the questions. Solutions Management, please begin with your feedback.

Operator: SNB Capital, I would like to welcome you to a conference call with Solutions Management regarding the financial results of Q2 2026. With us on call today, we have Mr. Abdullah Al-Dayel, GM of Corporate Finance and Investor Relations, Mr. Soliman Almahmoud, GM of Corporate Strategy Management, and Mr. Muhammad Urooj Khan, Finance Director. We'll first listen to the management's feedback. Following this, we will open the floor to the questions. Solutions Management, please begin with your feedback.

Speaker #1: I would like to welcome you to our conference call with Solutions Management regarding the financial results of Q2 2026. With us on the call today, we have Mr. Abdullah Al-Dayal, GM of Corporate Finance and Investor Relations.

Speaker #1: Mr. Suleiman Al-Mahmood, GM of Corporate Strategy Management, and Mr. Mohammad Urus Khan, Finance Director. We'll first listen to management's feedback. Following this, we will open the floor to questions.

Speaker #1: Solutions Management, please begin with your feedback.

Speaker #2: Assalamu alaikum warahmatullahi wabarakatuh. Thank you, Rehan, and thank you, SMB Capital, for hosting our H1 2026 earnings call. Before we get started, I would like to remind everyone that today's presentation and our financial disclosures are currently available in the Investor Relations section of our corporate website.

Abdullah Al-Dayal: Thank you, Johan, and thank you, SNB Capital for hosting our H1 2026 earnings call. Before we get started, I would like to remind everyone that today's presentation and our financial disclosures are currently available in the investor relations section on our corporate website. The agenda of our earnings call today will start with the strategic milestones achieved during H1 2026, and then revisit the core strength behind our investment case. We will follow this with a detailed review of our financial performance and conclude with our outlook and guidance before we move to the Q&A session. During H1 2026, Solutions continued to strengthen its contract pipeline and strategic position in the Saudi ICT market. In February, we signed a SAR 520 million contract with the National Water Company, providing end-to-end ICT managed services across application and infrastructure over a five-year period.

Abdullah Al-Dayel: Thank you, Johan, and thank you, SNB Capital for hosting our H1 2026 earnings call. Before we get started, I would like to remind everyone that today's presentation and our financial disclosures are currently available in the investor relations section on our corporate website. The agenda of our earnings call today will start with the strategic milestones achieved during H1 2026, and then revisit the core strength behind our investment case. We will follow this with a detailed review of our financial performance and conclude with our outlook and guidance before we move to the Q&A session. During H1 2026, Solutions continued to strengthen its contract pipeline and strategic position in the Saudi ICT market. In February, we signed a SAR 520 million contract with the National Water Company, providing end-to-end ICT managed services across application and infrastructure over a five-year period.

Speaker #2: The agenda of our earnings call today will start with the strategic milestones achieved during the first half of 2026, and then we will visit the core strengths behind our investment case.

Speaker #2: We will follow this with a detailed review of our financial performance, and conclude with our outlook and guidance before we move to the Q&A session.

Speaker #2: During the first six months of 2026, Solutions continued to strengthen its contract pipeline and strategic position in the Saudi ICT market. In February, we signed a SAR 520 million contract with the National Water Company, providing end-to-end ICT managed services across application and infrastructure.

Speaker #2: Over a five-year period, the financial impact of this contract is already being recognized, starting from the second quarter of this year. Also, in March, Solutions secured a SAR 1.4 billion contract with Saudi Aramco to deliver upstream supercomputing infrastructure.

Abdullah Al-Dayal: The financial impact of this contract is already being recognized starting from Q2 of this year. Also in March, Solutions secured a SAR 1.4 billion contract with Saudi Aramco to deliver upstream supercomputing infrastructure. The project strengthened our role in supporting advanced digital capabilities within the kingdom's energy sector, with a financial contribution expected to start in Q1 of next year. In April, the board of directors proposed 100% capital increase through one-for-one bonus share issue, doubling the company's capital base from SAR 1.2 billion to SAR 2.4 billion. The increase will be funded from retained earnings and aimed to support the future growth and expansion initiatives and also maximizing value for our shareholders.

Abdullah Al-Dayel: The financial impact of this contract is already being recognized starting from Q2 of this year. Also in March, Solutions secured a SAR 1.4 billion contract with Saudi Aramco to deliver upstream supercomputing infrastructure. The project strengthened our role in supporting advanced digital capabilities within the kingdom's energy sector, with a financial contribution expected to start in Q1 of next year. In April, the board of directors proposed 100% capital increase through one-for-one bonus share issue, doubling the company's capital base from SAR 1.2 billion to SAR 2.4 billion. The increase will be funded from retained earnings and aimed to support the future growth and expansion initiatives and also maximizing value for our shareholders.

Speaker #2: The project strengthened our role in supporting advanced digital capabilities within the Kingdom's energy sector, with a financial contribution expected to start in the first quarter of next year.

Speaker #2: In April, the Board of Directors proposed a 100% capital increase through a one-for-one bonus share issue, doubling the company's capital base from SAR 1.2 billion to SAR 2.4 billion.

Speaker #2: The increase will be funded from retained earnings and is aimed at supporting future growth and expansion initiatives, as well as maximizing value for our shareholders.

Speaker #2: Later in April, we signed 132 million contracts with SCC to design and upgrade digital infrastructure for cloud services data centers over a 3-year period.

Abdullah Al-Dayal: Later in April, we signed a SAR 132 million contract with stc to design and upgrade digital infrastructure for cloud service data centers over a three-year period, and we expect a financial contribution from this project by end of this year. In May, we launched the new brand identity for Giza Systems as pulse by solutions, which reinforces Solutions' integrated digital ecosystem and strengthen its position across system integration and technology services. Also in May, we signed a SAR 484 million contract with stc to develop the internal internet communication networks, including 5G capacity expansion and new data centers infrastructure over a 36-month period, with a financial impact expected from Q3 of this year. In June, we signed a collaboration agreement with the National Water Company to advance smart meter infrastructure to expand network coverage and improve operational efficiency in the utility sectors, supporting the Vision 2030 objectives.

Abdullah Al-Dayel: Later in April, we signed a SAR 132 million contract with stc to design and upgrade digital infrastructure for cloud service data centers over a three-year period, and we expect a financial contribution from this project by end of this year. In May, we launched the new brand identity for Giza Systems as pulse by solutions, which reinforces Solutions' integrated digital ecosystem and strengthen its position across system integration and technology services. Also in May, we signed a SAR 484 million contract with stc to develop the internal internet communication networks, including 5G capacity expansion and new data centers infrastructure over a 36-month period, with a financial impact expected from Q3 of this year. In June, we signed a collaboration agreement with the National Water Company to advance smart meter infrastructure to expand network coverage and improve operational efficiency in the utility sectors, supporting the Vision 2030 objectives.

Speaker #2: And we expect the financial contribution from this project by the end of this year. In May, we launched the new brand identity for JESUS System as Pulse by Solutions, which reinforces Solutions' integrated digital ecosystem and strengthens its position across system integration and technology services.

Speaker #2: Also, in May, we signed a $484 million contract with SCC to develop the internal internet communication networks, including 5G capacity expansion and new data center infrastructure, over a 36-month period, with the financial impact expected from the third quarter of this year.

Speaker #2: In June, we signed a collaboration agreement with the National Water Company to advance smart meter infrastructure, expand network coverage, and improve operational efficiency in the utility sector, supporting the Vision 2030 objectives.

Speaker #2: We believe these developments highlight the company's strong backlog, visibility, and continued demand for advanced ICT solutions in Saudi Arabia. Moving to the investment thesis, our investment thesis remains intact.

Abdullah Al-Dayal: We believe this development highlights the company's strong backlog visibility and continued demand for advanced ICT solutions in Saudi Arabia. Moving to the investment thesis. Our investment thesis remain intact. Solutions continue to take advantage of its market leadership and operate highly efficient business model, which deliver industry-leading return on capital, strong mid-cycle cash flow generation, and high dividend distribution. This shapes Solutions' compelling investment case, which rests on the following pillars. The company maintains a leading position in the Saudi IT service market, supported by long-term relationships with the key public and private sector clients. A sizable and diversified backlog projects reflects unparalleled customer reach and sets a foundation for strong revenue and cash flow generation. It's worth mentioning that our consolidated backlog by end of H1 reached to SAR 14.5 billion.

Abdullah Al-Dayel: We believe this development highlights the company's strong backlog visibility and continued demand for advanced ICT solutions in Saudi Arabia. Moving to the investment thesis. Our investment thesis remain intact. Solutions continue to take advantage of its market leadership and operate highly efficient business model, which deliver industry-leading return on capital, strong mid-cycle cash flow generation, and high dividend distribution. This shapes Solutions' compelling investment case, which rests on the following pillars. The company maintains a leading position in the Saudi IT service market, supported by long-term relationships with the key public and private sector clients. A sizable and diversified backlog projects reflects unparalleled customer reach and sets a foundation for strong revenue and cash flow generation. It's worth mentioning that our consolidated backlog by end of H1 reached to SAR 14.5 billion.

Speaker #2: Solutions continued to take advantage of its market leadership and operate a highly efficient business model, which delivered industry-leading return on capital, strong mid-cycle cash flow generation, and high dividend distribution.

Speaker #2: This shaped Solutions' compelling investment case, which rests on the following pillars: the company maintains a leading position in the Saudi ITM service market and IT service market, supported by long-term relationships with key public and private sector clients.

Speaker #2: A sizable and diversified backlog project reflects unparalleled customer reach and sets a foundation for strong revenue and cash flow generation. It's worth mentioning that our consolidated backlog by the end of H1 leads to $14.5 billion.

Speaker #2: Solution always generates return on invested capital well above our cost of capital, which indicates the efficiency of our business model and superior value creation. Diversified service mix, disciplined cost management, and strong execution ensure resilient profitability, which we maintain on average around 16% over the past five years.

Abdullah Al-Dayal: Solutions always generates return on invested capital well above our cost of capital, which indicate efficiency of our business model and superior value creation. Diversified service mix, disciplined cost management, and strong execution ensure resilient profitability, which we maintain on average around 16% over the past five years. Our asset-light business model assume low CapEx requirement, which historically stood below 2% of revenue, while in H1 2026, CapEx accounted for 1.4% of the revenue, which allow for financial flexibility and excellent free cash. Solutions have a strong track record of sustainable free cash flow generation, supported by a resilient business model and strong execution. Over the past four years, the company always generate annual free cash flow above SAR 1 billion. Also, we maintain a robust balance sheet with net cash position of SAR 693 million as of June.

Abdullah Al-Dayel: Solutions always generates return on invested capital well above our cost of capital, which indicate efficiency of our business model and superior value creation. Diversified service mix, disciplined cost management, and strong execution ensure resilient profitability, which we maintain on average around 16% over the past five years. Our asset-light business model assume low CapEx requirement, which historically stood below 2% of revenue, while in H1 2026, CapEx accounted for 1.4% of the revenue, which allow for financial flexibility and excellent free cash. Solutions have a strong track record of sustainable free cash flow generation, supported by a resilient business model and strong execution. Over the past four years, the company always generate annual free cash flow above SAR 1 billion. Also, we maintain a robust balance sheet with net cash position of SAR 693 million as of June.

Speaker #2: Our asset-light business model assumes a low capex requirement, which has consistently remained below 2% of revenue. In H1 '26, capex accounted for 1.4% of revenue.

Speaker #2: This allows for financial flexibility and excellent returns. Solutions has a strong track record of sustainable free cash flow generation, supported by a resilient business model and strong execution.

Speaker #2: Over the past four years, the company has consistently generated annual free cash flow above SAR 1 billion. Also, we maintain a robust balance sheet with a net cash position of SAR 693 million as of June, which gives us enough flexibility to finance organic growth, potential acquisitions, and deliver sustainable returns to our shareholders.

Abdullah Al-Dayal: That give us enough flexibility to finance organic growth, potential acquisition, and deliver sustainable dividend to the shareholders. The company offers strong dividend profile as shown by sustainable dividend over the last year. For 2025, the company paid dividend SAR per share in June 2026, implying the payout ratio of 60% of net profit. Thank you. Now let me hand it over to my colleague, Mohammed Urooj Khan, the Finance Director, who will take you through the financial results of H1. Mohammed?

Abdullah Al-Dayel: That give us enough flexibility to finance organic growth, potential acquisition, and deliver sustainable dividend to the shareholders. The company offers strong dividend profile as shown by sustainable dividend over the last year. For 2025, the company paid dividend SAR per share in June 2026, implying the payout ratio of 60% of net profit. Thank you. Now let me hand it over to my colleague, Mohammed Urooj Khan, the Finance Director, who will take you through the financial results of H1. Muhammad?

Speaker #2: The company offers a strong dividend profile as shown by a sustainable dividend over the past year. For 2025, the company paid a dividend of 8 riyals per share in June 2026, implying a payout ratio of 63% of net profit.

Speaker #2: Thank you. And now let me hand it over to my colleague, Mohammed Khan, the Finance Director, who will take you through the financial results for the first half.

Speaker #2: Mohammed.

Speaker #3: Thank you, Abdullah. Hello everyone, and thank you for joining us. We appreciate you taking the time to be with us on the earnings call today for the second quarter.

Mohammed Urooj Khan: Thank you, Abdullah. Hello, everyone, and thank you for joining us. We appreciate you taking the time to be with us on the earnings call today for Q2. I'll take you through our financial performance for H1 and also share some views on how the business is doing against our full year guidance, Inshallah. Well, I'm glad to say that Solutions delivered yet another solid quarter to conclude H1. Revenue growth, coupled with improving gross margin and operating efficiency, supported EBITDA growth, and improving working capital led to a recovery in free cash flow. We delivered 9% revenue growth year-on-year, reaching approximately SAR 6.25 billion in H1. Now, gross margin stood at 22%, only at 22 basis point below last year level.

Muhammad Urooj Khan: Thank you, Abdullah. Hello, everyone, and thank you for joining us. We appreciate you taking the time to be with us on the earnings call today for Q2. I'll take you through our financial performance for H1 and also share some views on how the business is doing against our full year guidance, Inshallah. Well, I'm glad to say that Solutions delivered yet another solid quarter to conclude H1. Revenue growth, coupled with improving gross margin and operating efficiency, supported EBITDA growth, and improving working capital led to a recovery in free cash flow. We delivered 9% revenue growth year-on-year, reaching approximately SAR 6.25 billion in H1. Now, gross margin stood at 22%, only at 22 basis point below last year level.

Speaker #3: I'll take you through our financial performance for the first half and also share some views on how the business is doing against our full-year guidance, inshallah.

Speaker #3: Well, glad to say that Solutions delivered yet another solid quarter to conclude the first half. Revenue growth, coupled with improving gross margin and operating efficiency, supported better growth, and improving working capital led to recovery and free cash flow.

Speaker #3: We delivered 9% revenue growth year on year, reaching approximately SAR 6.25 billion in the first half. Gross margin stood at 22%, only 22 basis points below last year’s level.

Speaker #3: H1 margin reflects software performance in the first quarter, while the second quarter showed a strong recovery to almost 24.3%. Now, a bit review: 12% year on year to reach approximately $1.1 billion.

Mohammed Urooj Khan: H1 margin reflects softer performance in Q1, while Q2 showed a strong recovery to almost 34.3%. EBITDA grew 12% year-on-year to reach approximately SAR 1.1 billion, with the EBITDA margin expanding by around 51 basis points to 17.4%. Net profit attributable to shareholders reached SAR 825 million, which is up 2% year-on-year with a margin of 13.2%. We'll come back to discuss the drivers behind each of these KPIs a little later in the presentation. Organic CapEx was around SAR 90 million, which is up only 4% year-on-year, with CapEx intensity remaining low at 1.4, which is well within the guided range. Improved working capital management supported the generation of SAR 315 million of free cash flow compared with an outflow last year. Free cash flow conversion stood at around 29%. Finally, returns also remain strong.

Muhammad Urooj Khan: H1 margin reflects softer performance in Q1, while Q2 showed a strong recovery to almost 34.3%. EBITDA grew 12% year-on-year to reach approximately SAR 1.1 billion, with the EBITDA margin expanding by around 51 basis points to 17.4%. Net profit attributable to shareholders reached SAR 825 million, which is up 2% year-on-year with a margin of 13.2%. We'll come back to discuss the drivers behind each of these KPIs a little later in the presentation. Organic CapEx was around SAR 90 million, which is up only 4% year-on-year, with CapEx intensity remaining low at 1.4, which is well within the guided range. Improved working capital management supported the generation of SAR 315 million of free cash flow compared with an outflow last year. Free cash flow conversion stood at around 29%. Finally, returns also remain strong.

Speaker #3: The EBITDA margin expanded by around 51 basis points to 17.4%. Net profit attributable to shareholders reached 825 million Saudi riyals, which is up 2% year on year.

Speaker #3: With a margin of 13.2%. Now, we'll come back to discuss the drivers behind each of these KPIs a little later in the presentation. Organic capex was around SAR 90 million, which is up only 4% year on year.

Speaker #3: With capex intensity remaining low at 1.4, which is well within the guided range. Improved working capital management supported the generation of $315 million of free cash flow.

Speaker #3: Compared with an outflow last year, free cash flow conversion stood at around 29%. And finally, returns also remained strong. Return on invested capital stood at 35.1% in the first half.

Mohammed Urooj Khan: Return on invested capital stood at 35.1% in H1. With that overview, let me walk you through the details, starting with the revenue. Revenue momentum strengthened further in Q2 as projects secured during 2025 and early 2026 contributed more meaningfully. Q2 revenue grew by 12%, taking H1 revenue to SAR 6.25 billion, around 9% growth year-on-year. This reflects continued execution across multiple business lines as previously secured projects moved into more active implementation phases. Looking at the business segments, Core ICT remained the largest contributor and the strongest growth driver. Revenue grew 20% year-on-year and increasing its share of group revenue to 54% from 49% last year. This growth was supported by stronger delivery momentum across projects secured during H2 2025 and during 2026. These projects progressed through key implementation and delivery milestones.

Muhammad Urooj Khan: Return on invested capital stood at 35.1% in H1. With that overview, let me walk you through the details, starting with the revenue. Revenue momentum strengthened further in Q2 as projects secured during 2025 and early 2026 contributed more meaningfully. Q2 revenue grew by 12%, taking H1 revenue to SAR 6.25 billion, around 9% growth year-on-year. This reflects continued execution across multiple business lines as previously secured projects moved into more active implementation phases. Looking at the business segments, Core ICT remained the largest contributor and the strongest growth driver. Revenue grew 20% year-on-year and increasing its share of group revenue to 54% from 49% last year. This growth was supported by stronger delivery momentum across projects secured during H2 2025 and during 2026. These projects progressed through key implementation and delivery milestones.

Speaker #3: Now, with that overview, let me walk you through the details, starting with the revenue. Revenue momentum strengthened further in the second quarter, as projects secured during 2025 and early 2026 contributed more meaningfully.

Speaker #3: Q2 revenue grew by 12%, taking first half revenue to 6.25 billion. That's around 9% growth year on year. This reflects continued execution across multiple business lines as previously secured projects moved into more active implementation phases.

Speaker #3: Now, looking at the business segments, core ICT remained the largest contributor and the strongest growth driver. Revenue grew 20% year-on-year, increasing its share of gross revenue to 54%, from 49% last year.

Speaker #3: This growth was supported by stronger delivery momentum across projects secured during the second half of 2025 and during 2026. These projects progressed through key implementation and delivery milestones.

Speaker #3: IT managed and operational services grew 3% year on year. The moderate growth mainly reflected mobilization and execution timing across customized contracts, while the recurring managed and BPO services contracts continued to provide revenue stability.

Mohammed Urooj Khan: IT Managed and Operational Services grew 3% year-on-year. The moderate growth mainly reflected mobilization and execution timing across customized contracts, while the recurring managed and BPO services contract continued to provide revenue stability. Digital Services declined 11% year-on-year. A good part of this portfolio is project-based, so revenue recognition can be uneven, quarter to quarter, depending on the nature and timing of milestones delivered. Overall, we continue to have a healthy mix of project-based and recurring services revenue. This provides visibility while keeping the business well diversified. Let's look at the revenue breakdown by entity on the next slide. solutions standalone was the largest contributor and grew 7% year-on-year through conversion of backlog and new awards. Upsource by Solutions revenue remained broadly flat year-on-year.

Muhammad Urooj Khan: IT Managed and Operational Services grew 3% year-on-year. The moderate growth mainly reflected mobilization and execution timing across customized contracts, while the recurring managed and BPO services contract continued to provide revenue stability. Digital Services declined 11% year-on-year. A good part of this portfolio is project-based, so revenue recognition can be uneven, quarter to quarter, depending on the nature and timing of milestones delivered. Overall, we continue to have a healthy mix of project-based and recurring services revenue. This provides visibility while keeping the business well diversified. Let's look at the revenue breakdown by entity on the next slide. solutions standalone was the largest contributor and grew 7% year-on-year through conversion of backlog and new awards. Upsource by Solutions revenue remained broadly flat year-on-year.

Speaker #3: Digital services declined 11% year on year now a good part of this portfolio is project based so revenue recognition can be even uneven sorry quarter to quarter depending on the nature and timing of milestones delivered.

Speaker #3: But overall, we continue to have a healthy mix of project-based and recurring services revenue. This provides visibility while keeping the business well-diversified.

Speaker #3: Now, let's look at the revenue breakdown by entity on the next slide. Solutions Stand-Alone was the largest contributor and grew 7% year-on-year through conversion of backlog and new awards.

Speaker #3: Upsource revenue remained broadly flat year on year. The second quarter decline mainly reflected a higher share of projects still in the mobilization stage, with their share expected to increase as delivery advances.

Mohammed Urooj Khan: The Q2 decline mainly reflected a higher share of projects still in the mobilization stage, with their share expected to increase as delivery advances. Our Giza Systems business, now rebranded as pulse, delivered 32% year-on-year growth. This was driven by a strong Q2 as major project milestones were achieved across its operating entities in Saudi Arabia and also in North Africa. What's important here is that the new pulse identity reflects its evolution into a broader regional technology provider with expanded capabilities and reach across MENA. Contribution from solutions remained almost unchanged at 67%, Upsource around 18% compared to 20% last year, and pulse around 15% compared to 12% a year ago. Let's briefly look at revenue by customer type. Our customer base continues to be diversified, with strong composition across government and private sector customers, and also stc as well.

Muhammad Urooj Khan: The Q2 decline mainly reflected a higher share of projects still in the mobilization stage, with their share expected to increase as delivery advances. Our Giza Systems business, now rebranded as pulse, delivered 32% year-on-year growth. This was driven by a strong Q2 as major project milestones were achieved across its operating entities in Saudi Arabia and also in North Africa. What's important here is that the new pulse identity reflects its evolution into a broader regional technology provider with expanded capabilities and reach across MENA. Contribution from solutions remained almost unchanged at 67%, Upsource around 18% compared to 20% last year, and pulse around 15% compared to 12% a year ago. Let's briefly look at revenue by customer type. Our customer base continues to be diversified, with strong composition across government and private sector customers, and also stc as well.

Speaker #3: Our GZAP business, now rebranded as Pulse, delivered 32% year-on-year growth. This was driven by a strong second quarter, as major project milestones were achieved across its operating entities in Saudi Arabia and also in North Africa.

Speaker #3: Now, what's important here is that the new Pulse identity reflects its evolution into a broader regional technology provider, with expanded capabilities and reach across MENA.

Speaker #3: Contribution from Solutions remained almost unchanged at 67%. Upsource was around 18%, compared to 20% last year. Pulse was around 15%, compared to 12% a year ago.

Speaker #3: Now, let's briefly look at revenue by customer type. Our customer base continues to be diversified, with strong composition across government and private sector customers.

Speaker #3: And also STC as well. Government remained our largest customer segment, with revenue growing 6% year-on-year and representing 41% of total group revenue.

Mohammed Urooj Khan: Government remained our largest customer segment, with revenue growing 6% year-on-year and representing 41% of total group revenue, compared with 42% last year. Now the slight movement in share reflects a more moderate Q2 due to normal phasing of the projects. On top of that, we've also seen some caution in the rollout of new government opportunities, which has slightly extended spending cycles. However, our strong backlog and healthy pipeline support a positive outlook of this sector. The private sector was the strongest, with revenue increasing 21% year-on-year. Now this was supported by strong execution across ongoing projects as well as new wins, increasing its share to 26% from 24% a year ago. Revenue from stc grew 4% year-on-year in H1, supported by growth in Q2 as secure projects progressed into more advanced execution stages.

Muhammad Urooj Khan: Government remained our largest customer segment, with revenue growing 6% year-on-year and representing 41% of total group revenue, compared with 42% last year. Now the slight movement in share reflects a more moderate Q2 due to normal phasing of the projects. On top of that, we've also seen some caution in the rollout of new government opportunities, which has slightly extended spending cycles. However, our strong backlog and healthy pipeline support a positive outlook of this sector. The private sector was the strongest, with revenue increasing 21% year-on-year. Now this was supported by strong execution across ongoing projects as well as new wins, increasing its share to 26% from 24% a year ago. Revenue from stc grew 4% year-on-year in H1, supported by growth in Q2 as secure projects progressed into more advanced execution stages.

Speaker #3: Compared with 42% last year. Now, the slight movement in share reflects a more moderate second quarter due to normal phasing of the projects. On top of that, we've also seen some caution in the rollout of new government opportunities, which has slightly extended spending cycles. However, our strong backlog and healthy pipeline support a positive outlook for this sector.

Speaker #3: The private sector was the strongest, with revenue increasing 21% year on year. This was supported by strong execution across ongoing projects, as well as new wins, increasing its share to 26% from 24% a year ago.

Speaker #3: Revenue from STC grew 4% year-on-year in the first half, supported by growth in the second quarter as secured projects progressed into more advanced execution stages.

Speaker #3: This represented a 32% share of revenue compared with 34% last year. The decrease owed more to the strong growth in the private sector than anything structurally within the STC sector.

Mohammed Urooj Khan: This represented a 32% share of revenue, compared with 34% last year. The decrease owing more to the astounding growth in private sector than anything structurally within the stc sector. Overall, the group remains well-diversified across its service offerings, entities, and customer base, providing scale and delivering growth at the same time. Let me now turn to profitability. Gross profit grew 8% year-on-year in H1, broadly in line with revenue growth, while gross margin stood at 22%, which is almost in line with the margin a year ago with only a 22 basis points drop. Importantly, gross margin recovered strongly in Q2, reaching up to 24.3%, compared with 19.5% in Q1. The recovery was supported by project execution, timing, and recognition of high-margin milestones with a stronger contribution from complex consulting, professional services, and managed services.

Muhammad Urooj Khan: This represented a 32% share of revenue, compared with 34% last year. The decrease owing more to the astounding growth in private sector than anything structurally within the stc sector. Overall, the group remains well-diversified across its service offerings, entities, and customer base, providing scale and delivering growth at the same time. Let me now turn to profitability. Gross profit grew 8% year-on-year in H1, broadly in line with revenue growth, while gross margin stood at 22%, which is almost in line with the margin a year ago with only a 22 basis points drop. Importantly, gross margin recovered strongly in Q2, reaching up to 24.3%, compared with 19.5% in Q1. The recovery was supported by project execution, timing, and recognition of high-margin milestones with a stronger contribution from complex consulting, professional services, and managed services.

Speaker #3: So overall, the group remains well-diversified across its service offerings, entities, and customer base, providing scale and delivering growth at the same time. Let me now turn to profitability.

Speaker #3: Gross profit grew 8% year on year in the first half, broadly in line with revenue growth, while gross margin stood at 22%, which is almost in line with the margin a year ago, with only a 22 basis point drop.

Speaker #3: But importantly, gross margin recovered strongly in Q2, reaching up to 24.3% compared with 19.5% in the first quarter. The recovery was supported by project execution timing and recognition of higher-margin milestones, with a stronger contribution from complex consulting, professional services, and managed services.

Speaker #3: As we have highlighted before, quarterly margins can be lumpy because of the project mix, the execution stages, and the nature and timing of the milestones recognized during the period.

Mohammed Urooj Khan: As we have highlighted before, quarterly margins can be lumpy because of the project mix or the execution stages, and the nature and timing of the milestones recognized during the period. Yet the year-to-date June margin of 22% provides a balanced view and remains broadly in line with our historical range. Next slide, please. Thank you. Looking at gross profit by entity now. The performance reflects differences in project mix and the timing and execution across our group companies. Group gross profit increased by approximately SAR 102 million year-on-year, and Pulse and Upsource together accounted for much of this. The gross profit from solutions standalone was broadly flat year-on-year in H1. The margin recovery achieved in Q2 reflected the timing of revenue recognition across the specific project milestones.

Muhammad Urooj Khan: As we have highlighted before, quarterly margins can be lumpy because of the project mix or the execution stages, and the nature and timing of the milestones recognized during the period. Yet the year-to-date June margin of 22% provides a balanced view and remains broadly in line with our historical range. Next slide, please. Thank you. Looking at gross profit by entity now. The performance reflects differences in project mix and the timing and execution across our group companies. Group gross profit increased by approximately SAR 102 million year-on-year, and Pulse and Upsource together accounted for much of this. The gross profit from solutions standalone was broadly flat year-on-year in H1. The margin recovery achieved in Q2 reflected the timing of revenue recognition across the specific project milestones.

Speaker #3: Yet, the year-to-date June margin of 22% provides a balanced view and remains broadly in line with our historical range. Next slide, please.

Speaker #3: Thank you. Looking at gross profit by entity now, the performance reflects differences in project mix and the timing and execution across our group companies.

Speaker #3: Group gross profit increased by approximately $102 million year on year, and Pulse and Upsource together accounted for much of this. The gross profit from Solutions standalone was broadly flat year on year in the first half.

Speaker #3: The margin recovery achieved in the second quarter reflected the timing of revenue recognition across a specific project milestones. But importantly Solutions stand alone Q2 margin were some of the best that we have recorded in the last four or five quarters Pulse delivered a 78% year on year increase supported by strong revenue growth and a stable margin profile.

Mohammed Urooj Khan: Importantly, the solutions standalone Q2 margin were some of the best that we have recorded in the last four or five quarters. Pulse delivered a 78% year-on-year increase, supported by strong revenue growth and a stable margin profile. Upsource delivered 24% year-on-year growth, driven by continued cost discipline and also benefit from higher HRDF rebates, which are part of its operating models. What this shows is that the group's profit contribution is becoming broader across the portfolio. Next slide, please. Thanks. Although gross margin moved slightly, EBITDA increased 12% year-on-year to approximately SAR 1.1 billion, and the EBITDA margin expanded by 51 basis points to 17.4%. Now the key point here is that EBITDA grew faster than revenue because the operating expenses increased by only 3% year-on-year, compared with 9% revenue growth.

Muhammad Urooj Khan: Importantly, the solutions standalone Q2 margin were some of the best that we have recorded in the last four or five quarters. Pulse delivered a 78% year-on-year increase, supported by strong revenue growth and a stable margin profile. Upsource delivered 24% year-on-year growth, driven by continued cost discipline and also benefit from higher HRDF rebates, which are part of its operating models. What this shows is that the group's profit contribution is becoming broader across the portfolio. Next slide, please. Thanks. Although gross margin moved slightly, EBITDA increased 12% year-on-year to approximately SAR 1.1 billion, and the EBITDA margin expanded by 51 basis points to 17.4%. Now the key point here is that EBITDA grew faster than revenue because the operating expenses increased by only 3% year-on-year, compared with 9% revenue growth.

Speaker #3: Upsource delivered 24% year-on-year growth, driven by continued cost discipline and also benefiting from higher HRDF rebates, which are part of its operating models. What this shows is that the group's profit contribution is looking broader across the portfolio.

Speaker #3: Next slide, please. Thanks. Although gross margin moved slightly, it increased 12% year-on-year to approximately SAR 1.1 billion, and the EBITDA margin expanded by 51 basis points to 17.4%.

Speaker #3: Now, the key point here is that EBITDA grew faster than revenue because the operating expenses increased by only 3% year on year, compared with 9% revenue growth.

Speaker #3: So this created positive operating leverage and allowed cost savings to more than offset the slight dip in the gross margin. The OPEX movement was affected by savings from revised royalty terms in the first quarter, which also offset the ECL provisions recorded in the second quarter.

Mohammed Urooj Khan: This created positive operating leverage and allowed cost savings to more than offset the slight dip in the gross margin. The OpEx movement was affected by savings from revised royalty terms in Q1, which also offset the ECL provisions recorded in Q2. If we adjust for these items, operating cost was broadly in line with the overall expansion of the business, while the management continues to pursue further efficiency. Net profit attributable to shareholders increased 2% year-on-year to around SAR 825 million, with a net profit margin of 13.2%. The more moderate net profit growth relative to EBITDA reflects a higher Zakat charge following the increase in the tax base, along with lower non-operating and finance income, and also some FX losses, mainly from Pulse operations in Egypt.

Muhammad Urooj Khan: This created positive operating leverage and allowed cost savings to more than offset the slight dip in the gross margin. The OpEx movement was affected by savings from revised royalty terms in Q1, which also offset the ECL provisions recorded in Q2. If we adjust for these items, operating cost was broadly in line with the overall expansion of the business, while the management continues to pursue further efficiency. Net profit attributable to shareholders increased 2% year-on-year to around SAR 825 million, with a net profit margin of 13.2%. The more moderate net profit growth relative to EBITDA reflects a higher Zakat charge following the increase in the tax base, along with lower non-operating and finance income, and also some FX losses, mainly from Pulse operations in Egypt.

Speaker #3: Now we see, adjusted for these items, operating costs were broadly in line with the overall expansion of the business, while management continues to pursue further efficiency.

Speaker #3: Net profit attributable to shareholders increased 2% year-on-year to around 825 million, with a net profit margin of 13.2%. Now, the more moderate net profit growth relative to EBITDA reflects a higher Zakat charge following the increase in Zakat base.

Speaker #3: And along with lower non-operating and finance income, and also some effect losses, mainly from Pulse operations in Egypt. So, the underlying operating performance remains strong, even though some of that growth did not completely flow through to the bottom line in the first half.

Mohammed Urooj Khan: The underlying operating performance remains strong, even though some of that growth did not completely flow through to the bottom line in H1. Let me now cover the balance sheet and working capital briefly. Working capital continues to move in line with project execution and milestone-based billing cycles, which is normal for a business with a substantial share of project-based revenue. The management remains focused on improving collections and optimizing supplier payments to support stronger cash flow conversion. Working capital decreased 3% year-on-year to around SAR 3.1 billion, supported by lower receivables and higher payables. Account receivables closed at SAR 4 billion, while receivable days improved to 119, reflecting better collection and continued collection cycle optimization. Accounts payable also increased to around SAR 4.6 billion, with payable days at 159, reflecting continued optimization of supplier and partner payment terms.

Muhammad Urooj Khan: The underlying operating performance remains strong, even though some of that growth did not completely flow through to the bottom line in H1. Let me now cover the balance sheet and working capital briefly. Working capital continues to move in line with project execution and milestone-based billing cycles, which is normal for a business with a substantial share of project-based revenue. The management remains focused on improving collections and optimizing supplier payments to support stronger cash flow conversion. Working capital decreased 3% year-on-year to around SAR 3.1 billion, supported by lower receivables and higher payables. Account receivables closed at SAR 4 billion, while receivable days improved to 119, reflecting better collection and continued collection cycle optimization. Accounts payable also increased to around SAR 4.6 billion, with payable days at 159, reflecting continued optimization of supplier and partner payment terms.

Speaker #3: Let me now cover the balance sheet and working capital briefly. Working capital continues to move in line with project execution and milestone-based billing cycles.

Speaker #3: This is normal for a business with a substantial share of project-based revenue. The management remains focused on improving collections and optimizing supplier payments to support stronger cash flow conversion.

Speaker #3: Working capital decreased 3% year-on-year to around SAR 3.1 billion, supported by lower receivables and higher payables. Accounts receivable closed at SAR 4 billion, while receivable days improved to 119, reflecting better collection and continued collection cycle optimization.

Speaker #3: Accounts payable also increased to around $4.6 billion, with payable days at 159, reflecting continued optimization of supplier and partner payment terms. Looking at the receivables mix, I think government clients represented the largest share at approximately 44%, followed by private sector clients at—sorry—29%, and STC at 26%.

Mohammed Urooj Khan: Looking at the receivables mix, I think government clients represented the largest share at approximately 44%, followed by private sector clients at 29% and stc at 26%. Overall, the working capital movement reflects better collection discipline and continued optimization of payable, rather than any change in the underlying business. Let's quickly cover cash flow on the next slide, please. Free cash flow stood at SAR 315 million, compared with -SAR 880 million in H1 of last year. This is a swing of close to SAR 1.2 billion and reflects a genuinely strong operating cash flow position together with continued light capital requirements. Operating cash flow reached approximately SAR 500 million compared with an outflow a year ago. This recovery was mainly driven by lower receivables and optimized payables, reflecting the focused working capital measures I just described a while back.

Muhammad Urooj Khan: Looking at the receivables mix, I think government clients represented the largest share at approximately 44%, followed by private sector clients at 29% and stc at 26%. Overall, the working capital movement reflects better collection discipline and continued optimization of payable, rather than any change in the underlying business. Let's quickly cover cash flow on the next slide, please. Free cash flow stood at SAR 315 million, compared with -SAR 880 million in H1 of last year. This is a swing of close to SAR 1.2 billion and reflects a genuinely strong operating cash flow position together with continued light capital requirements. Operating cash flow reached approximately SAR 500 million compared with an outflow a year ago. This recovery was mainly driven by lower receivables and optimized payables, reflecting the focused working capital measures I just described a while back.

Speaker #3: Overall, the working capital movement reflects better collection discipline and continued optimization of payables, rather than any change in the underlying business. Now, let's quickly cover cash flow on the next slide, please.

Speaker #3: Free cash flow stood at 315 million Saudi riyals, compared with a negative approximately 880 million in the first half of last year. Now, this is a swing of close to 1.2 billion Saudi riyals.

Speaker #3: And reflects a genuinely strong operating cash flow position, together with continued light capital requirements. Now, operating cash flow reached approximately SAR 500 million, compared with an outflow a year ago.

Speaker #3: Now, this recovery was mainly driven by lower receivables and optimized payables, reflecting the focused working capital measures I just described a while back. This was partly offset by higher contract assets, which reflect normal timing differences between project execution, milestone billing, and cash collection.

Mohammed Urooj Khan: This was partly offset by higher contract assets, which reflects normal timing differences between project execution, milestone billing, and cash collection. Capital expenditure increased by only 4% year-on-year to SAR 90 million, with the CapEx intensity at 1.4% of revenue. This remains well within our guidance, and there is no change in the CapEx intensity of our asset-light model. Overall, the H1 cash flow recovery is encouraging. At the same time, cash generation can still fluctuate between periods because of the timing gaps between execution, billing, and collection. Moving on to the next slide, please. solutions continues to generate strong returns well above the cost of capital, while maintaining an asset-light model that supports a healthy balance sheet and consistent shareholder returns.

Muhammad Urooj Khan: This was partly offset by higher contract assets, which reflects normal timing differences between project execution, milestone billing, and cash collection. Capital expenditure increased by only 4% year-on-year to SAR 90 million, with the CapEx intensity at 1.4% of revenue. This remains well within our guidance, and there is no change in the CapEx intensity of our asset-light model. Overall, the H1 cash flow recovery is encouraging. At the same time, cash generation can still fluctuate between periods because of the timing gaps between execution, billing, and collection. Moving on to the next slide, please. solutions continues to generate strong returns well above the cost of capital, while maintaining an asset-light model that supports a healthy balance sheet and consistent shareholder returns.

Speaker #3: Capital expenditure increased by only 4% year-on-year to 90 million Saudi riyals, with the CapEx intensity at 1.4% of revenue. Now, this remains well within our guidance, and there is no change in the capital intensity of our asset-light model.

Speaker #3: Overall, the first-half cash flow recovery is encouraging. At the same time, cash generation can still fluctuate between peers because of timing gaps between execution, billing, and collection.

Speaker #3: Now, moving on to the next slide, please. Solutions continues to generate strong returns, well above the cost of capital, while maintaining an asset-light model that supports a healthy balance sheet and consistent shareholder returns.

Speaker #3: The annualized return on invested capital stood at a little over 39% for the second quarter only, and 35% for the first half. Both levels remain well above our cost of capital, reflecting efficient capital deployment and disciplined investments across the business.

Mohammed Urooj Khan: The annualized return on invested capital stood at a little lower, 39% for Q2 only and 35% for H1. Both levels remain well above our cost of capital, reflecting efficient capital deployment and disciplined investments across the business. Our net cash position stood at SAR 693 million at the end of the period, mainly because of the payment of SAR 953 million in dividends for 2025 financial year. This represents a dividend of SAR 8 per share and 63% payout ratio. Importantly, the group remained adequately capitalized and in a net cash position after the distribution. This demonstrates our ability to combine shareholder returns with continued investments in growth while preserving balance sheet strength and financial flexibility. Let me just recap on our outlook for 2026. Okay.

Muhammad Urooj Khan: The annualized return on invested capital stood at a little lower, 39% for Q2 only and 35% for H1. Both levels remain well above our cost of capital, reflecting efficient capital deployment and disciplined investments across the business. Our net cash position stood at SAR 693 million at the end of the period, mainly because of the payment of SAR 953 million in dividends for 2025 financial year. This represents a dividend of SAR 8 per share and 63% payout ratio. Importantly, the group remained adequately capitalized and in a net cash position after the distribution. This demonstrates our ability to combine shareholder returns with continued investments in growth while preserving balance sheet strength and financial flexibility. Let me just recap on our outlook for 2026. Okay.

Speaker #3: Now our net cash position stood at SAR 693 million at the end of the period, mainly because of the payment of SAR 953 million in dividends for the 2022/25 financial year.

Speaker #3: This represents a dividend of 8 riyals per share and a 63% payout ratio. Now, importantly, the group remained adequately capitalized and in a net cash position after the distribution.

Speaker #3: This demonstrates our ability to combine shareholder returns with continued investments in growth, while preserving balance sheet strength and financial flexibility. With that, let me just recap our outlook for 2026 quickly.

Speaker #3: Now, the strong backlog together with projects secured recently provide a solid foundation for the rest of the year. So, based on our first half performance and the current visibility, we remain confident in achieving our full-year objectives.

Mohammed Urooj Khan: The strong backlog, together with projects secured recently, provide a solid foundation for the rest of the year. Based on our H1 performance and the current visibility, we remain confident in achieving our full year objectives. We therefore reiterate our 2026 guidance of 6% to 8% of revenue growth and an EBITDA margin of 14% to 16%, while keeping the organic CapEx to 2% to 3% of revenue. Thank you very much. That concludes our presentation for today. We are now happy to open the floor for your questions.

Muhammad Urooj Khan: The strong backlog, together with projects secured recently, provide a solid foundation for the rest of the year. Based on our H1 performance and the current visibility, we remain confident in achieving our full year objectives. We therefore reiterate our 2026 guidance of 6% to 8% of revenue growth and an EBITDA margin of 14% to 16%, while keeping the organic CapEx to 2% to 3% of revenue. Thank you very much. That concludes our presentation for today. We are now happy to open the floor for your questions.

Speaker #3: We therefore reiterate our 2026 guidance of 6% to 8% revenue growth and an EBITDA margin of 14% to 16%, while keeping organic CapEx at 2% to 3% of revenue.

Speaker #3: Thank you very much, and that concludes our presentation for today. We are now happy to open the floor for your questions.

Speaker #1: Thank you, management. Ladies and gentlemen, we will now start the Q&A session. If you have any questions, please raise your hand or you can, alternatively, type in the Q&A box.

[Analyst] (SNB Capital): Thank you, management. Ladies and gentlemen, we will now start the Q&A session. If you have any questions, please raise your hand or you can conversely type in the Q&A box. Looks like we have our first question from the line of Cesar Tiron. Cesar, please go ahead.

Operator: Thank you, management. Ladies and gentlemen, we will now start the Q&A session. If you have any questions, please raise your hand or you can conversely type in the Q&A box. Looks like we have our first question from the line of Cesar Tiron. Cesar, please go ahead.

Speaker #1: Looks like we have our first question from the lineup. She's already on. She's up—please, go ahead.

Cesar Tiron: Hi. Good afternoon. Thanks for the call and for the opportunity to ask questions. Congratulations on your Q2 numbers. I have three questions. First one relates to the very strong growth and returns in the.

[Analyst 1]: Hi. Good afternoon. Thanks for the call and for the opportunity to ask questions. Congratulations on your Q2 numbers. I have three questions. First one relates to the very strong growth and returns in the.

Speaker #2: Good afternoon. Thanks for the call and for the opportunity to ask questions. And congratulations on your Q2 numbers. I have three questions. The first one relates to the very strong growth you've experienced in the—

Speaker #3: I'm sorry if it's just me, but Cesar, we cannot hear you clearly.

Mohammed Urooj Khan: I'm sorry if it's just Cesar, we cannot hear you clearly.

Muhammad Urooj Khan: I'm sorry if it's just Cesar, we cannot hear you clearly.

Speaker #2: Yes, hi, good afternoon. Thanks for the call and for the opportunity to ask questions. And congratulations on the strong Q2 numbers. I have three questions.

Cesar Tiron: Yes. Hi. Good afternoon. Thanks for the call and for the opportunity to ask questions, and congratulations on the strong Q2 numbers. I have three questions. The first one relates to the very strong 21%, I think, all senior B2B revenue. Can you please explain what was the key driver? It was growing much faster than the government and stc. Second question, I wanted to understand, in light of the very strong performance in H1, why did you choose not revise support guidance for the full year? Is that because the trends in industry are decelerating? The third question, are you contemplating M&A in the foreseeable?

[Analyst 1]: Yes. Hi. Good afternoon. Thanks for the call and for the opportunity to ask questions, and congratulations on the strong Q2 numbers. I have three questions. The first one relates to the very strong 21%, I think, all senior B2B revenue. Can you please explain what was the key driver? It was growing much faster than the government and stc. Second question, I wanted to understand, in light of the very strong performance in H1, why did you choose not revise support guidance for the full year? Is that because the trends in industry are decelerating? The third question, are you contemplating M&A in the foreseeable?

Speaker #2: The first one relates to the very strong 2021%—I think gross—in your B2B revenue. Can you please explain what was the key driver behind that very strong gross?

Speaker #2: It was growing much faster than the government and STC. Second question, I wanted to understand, in light of the very strong performance in H1, why did you choose not to revise upward your guidance for the full year?

Speaker #2: Is that because the trends in Q3 are decelerating? And then the third question: are you contemplating any M&A in the foreseeable future?

Speaker #1: Right. Thank you, Cesar, for your questions. Let me take them one by one. I'll read the questions again just to make sure that we're on the same page.

Sulaiman Al Mahmoud: Thank you, Cesar, for your questions. Let me take them one by one, and I'll read the questions again just to make sure that we're on the same page. Your first question was around private sector growth and the revenue share of 21%, and why is it faster than other segments. It has been a focus of the company to diversify and to lower the risk of concentration between government sales to stc and to hedge more with the private sector. As you are aware from the composition of our revenue, the private sector used to be the smallest bucket. Over the years, it has been growing, and there is a special focus from management to improve this segment. This is part of the result to our efforts and strategy to improve the revenue mix within the business solutions.

Soliman Almahmoud: Thank you, Cesar, for your questions. Let me take them one by one, and I'll read the questions again just to make sure that we're on the same page. Your first question was around private sector growth and the revenue share of 21%, and why is it faster than other segments. It has been a focus of the company to diversify and to lower the risk of concentration between government sales to stc and to hedge more with the private sector. As you are aware from the composition of our revenue, the private sector used to be the smallest bucket. Over the years, it has been growing, and there is a special focus from management to improve this segment. This is part of the result to our efforts and strategy to improve the revenue mix within the business solutions.

Speaker #1: So your first question was around private sector growth and the revenue share of 21%, and why it is faster than other segments. It has been a focus of the company to diversify and to lower the risk of concentration between government sales to SEC, and to hedge more with the private sector.

Speaker #1: As you're aware from the composition of our revenue, the private sector used to be the smallest bucket. Over the years, it has been growing and there's a special focus from management to improve this segment.

Speaker #1: And this is part of the result of our efforts and strategy to improve the revenue mix within the Solutions business. So this is in line with expectations, and it will hopefully continue to be.

Sulaiman Al Mahmoud: This is in line with the expectation, and it will continue to be, hopefully. Besides the current any delays and challenges we're seeing in government business, which may have helped also to improve the private sector ratio in our revenue. That's for the first question. Your second question was why don't we revise the guidance for full year? If you have looked closely at our numbers, we usually are bulk of the business in H2, and we're trying to accelerate our business in Q1 and Q2 to better leverage our capacity as a company and not concentrate all of our business in one quarter. This has happened historically because of concentrations of projects towards the end of the year as we win in the beginning of the year after the budget cycle of our clients and the project start on mid-year.

Soliman Almahmoud: This is in line with the expectation, and it will continue to be, hopefully. Besides the current any delays and challenges we're seeing in government business, which may have helped also to improve the private sector ratio in our revenue. That's for the first question. Your second question was why don't we revise the guidance for full year? If you have looked closely at our numbers, we usually are bulk of the business in H2, and we're trying to accelerate our business in Q1 and Q2 to better leverage our capacity as a company and not concentrate all of our business in one quarter. This has happened historically because of concentrations of projects towards the end of the year as we win in the beginning of the year after the budget cycle of our clients and the project start on mid-year.

Speaker #1: Besides the current delays and challenges we're seeing in government business, which may have also helped to improve the private sector ratio in our revenue.

Speaker #1: That's for the first question. Your second question was, why don't we revise the guidance for the full year? If you have looked closely at our numbers, usually the bulk of our business is in H2.

Speaker #1: And we were trying to accelerate our business in Q1 and Q2 to better leverage our capacity as a company and not concentrate all of our business in one quarter.

Speaker #1: This has happened historically because of concentrations of projects toward the end of the year, as we win in the beginning of the year after the budget cycle of our clients, and the projects start around mid-year.

Speaker #1: So, we see the bulk of revenue in Q2, Q3, and Q4. We're trying to push delivery to accelerate the projects early in the year and to make it more uniform, which will help us improve utilization across company resources, as well as avoid peak delivery times that may be inefficient for us.

Sulaiman Al Mahmoud: We see bulk of revenue in Q2, Q3, and Q4. We're trying to push delivery to accelerate the project early in the year and to make it more uniform, which will help us to improve utilization across company resources as well as avoid peak delivery times that would be inefficient for us. We're still committed on the same guidance. We just made extra efforts to improve the revenue quantity and volume in Q1 and Q2 to have more uniform revenue profile across quarters. The last question was around M&A. As we have highlighted previously, we're active in terms of M&A. We're looking for live targets. We have different objectives to complement and consolidate our capabilities. We're actively looking for targets, and we will announce in due time whenever there is an update.

Soliman Almahmoud: We see bulk of revenue in Q2, Q3, and Q4. We're trying to push delivery to accelerate the project early in the year and to make it more uniform, which will help us to improve utilization across company resources as well as avoid peak delivery times that would be inefficient for us. We're still committed on the same guidance. We just made extra efforts to improve the revenue quantity and volume in Q1 and Q2 to have more uniform revenue profile across quarters. The last question was around M&A. As we have highlighted previously, we're active in terms of M&A. We're looking for live targets. We have different objectives to complement and consolidate our capabilities. We're actively looking for targets, and we will announce in due time whenever there is an update.

Speaker #1: So, we're still committed to the same guidance. We just made extra efforts to improve the revenue quantity and volume in Q1 and Q2 to have a more uniform revenue profile across quarters.

Speaker #1: The last question was around M&A. As we have highlighted previously, we're active in terms of M&A. We're looking for the right targets, where we have different objectives to complement and consolidate our capabilities.

Speaker #1: And we're actively looking for targets, and we will announce in due time whenever there is an update. Thank you. Management, I'll take a couple of questions from the Q&A box now.

[Analyst] (SNB Capital): Thank you, Management. I'll take a couple of questions from the Q&A box now. There is a question in the Q&A box which reads: how should we think about the pace of the backlog conversion over the next 12 to 18 months, and does this support a step up in revenues growth entering fiscal year 2027?

Operator: Thank you, Management. I'll take a couple of questions from the Q&A box now. There is a question in the Q&A box which reads: how should we think about the pace of the backlog conversion over the next 12 to 18 months, and does this support a step up in revenues growth entering fiscal year 2027?

Speaker #1: There is a question in the Q&A box which reads: How should we think about the pace of the backlog conversion over the next 12 to 18 months, and does this support a step up in revenue growth entering fiscal year 2027?

Speaker #3: Well, our backlog seems to be in a healthy position, similar to prior years, and the sales pipeline is in a good manner as well.

Sulaiman Al Mahmoud: Well, our backlog seems to be in a healthy position similar to prior years as well as the sales pipeline is in a good manner as well. It's dependent a lot on diversity cycles of our clients and whether these contracts are signed with the government in due time. As far as we see and know, we think everything is in the right position to meet our commitment for the year, inshallah.

Soliman Almahmoud: Well, our backlog seems to be in a healthy position similar to prior years as well as the sales pipeline is in a good manner as well. It's dependent a lot on diversity cycles of our clients and whether these contracts are signed with the government in due time. As far as we see and know, we think everything is in the right position to meet our commitment for the year, inshallah.

Speaker #3: It's dependent a lot on the budgetary cycles of our clients and whether these contracts are signed with the government in due time. But as far as we see and know, we think everything is in the right position to meet our commitment for the full year, inshallah.

Speaker #1: Thank you, management. Ladies and gentlemen, if you have any questions, please raise your hand or you can alternatively type them in the Q&A box. We have our next question from the line of Mohammed Faisal.

[Analyst] (SNB Capital): Thank you, Management. Ladies and gentlemen, if you have any questions, please raise your hand or you can conversely type in the Q&A box. We have the next question from the line of Mohammed Faisal. Mohammed Faisal, please go ahead. You're unmuted.

Operator: Thank you, Management. Ladies and gentlemen, if you have any questions, please raise your hand or you can conversely type in the Q&A box. We have the next question from the line of Mohammed Faisal. Mohammed Faisal, please go ahead. You're unmuted.

Speaker #1: Mohammed Faisal, please go ahead. You're unmuted.

Speaker #4: Khair, salam alaykum. Am I audible?

Mohammed Faisal: Am I audible?

[Analyst 2]: Am I audible?

Speaker #1: Yes, you are. Please go ahead.

Speaker #4: Okay. My question on management is on two points, actually. Q2 saw a very strong performance in ICT, growing year over year by 28%, and Q1 by 23%.

[Analyst] (SNB Capital): Yes, you are. Please go ahead.

Operator: Yes, you are. Please go ahead.

Mohammed Faisal: Okay. My question, management, is on two points, actually. Q2 saw a very strong performance in ICT, growing YOY of 28, and Q1 to Q1, 23%. Am I okay to ask you if this would be the sustained performance going forward based on the projects that you would secure? Point number two, question number two rather, would you have a guidance for PAT for us, please?

[Analyst 2]: Okay. My question, management, is on two points, actually. Q2 saw a very strong performance in ICT, growing YOY of 28, and Q1 to Q1, 23%. Am I okay to ask you if this would be the sustained performance going forward based on the projects that you would secure? Point number two, question number two rather, would you have a guidance for PAT for us, please?

Speaker #4: am I am I okay to ask you it it if if this would be the sustained performance going would secure and point number two question number two rather would you have a guidance for PAT for us please?

Speaker #3: So, for the first question, yes, called ICT, this is the segment where the majority of our productized engagements with clients are logged or recorded and recognized.

Sulaiman Al Mahmoud: For the first question, yes, Core ICT is the segment where majority of our productized engagements with clients are logged or recorded and recognized. We explained that we're trying to make our revenue more uniform across the year to accelerate projects in Q1 and Q2 to reduce the intensity of Q3 and Q4. We remain committed to the guidance of the full year for the entire company, and we cannot specifically comment on what would be Core ICT performance in upcoming quarters precisely. That's your first question, Mohammed. Your second question was?

Soliman Almahmoud: For the first question, yes, Core ICT is the segment where majority of our productized engagements with clients are logged or recorded and recognized. We explained that we're trying to make our revenue more uniform across the year to accelerate projects in Q1 and Q2 to reduce the intensity of Q3 and Q4. We remain committed to the guidance of the full year for the entire company, and we cannot specifically comment on what would be Core ICT performance in upcoming quarters precisely. That's your first question, Mohammed. Your second question was?

Speaker #3: As we explained, we're trying to make our revenue more uniform across the year by accelerating projects in Q1 and Q2 to reduce the intensity in Q3 and Q4.

Speaker #3: So, we remain committed to the full-year guidance for the entire company, and you can ask specifically about what would be core ICT performance in upcoming quarters, precisely.

Speaker #3: That's your first question, Mohammed. Your second question was?

Speaker #4: Any guidance on PAT, please?

Mohammed Faisal: Any guidance on PAT, please?

[Analyst 2]: Any guidance on PAT, please?

Speaker #3: Yep. So with Suleiman, if you'll allow me, I believe you're talking about profit after tax, right?

Mohammed Urooj Khan: Yeah. Sulaiman, if you'll allow. I believe you're talking about profit after tax, right?

Muhammad Urooj Khan: Yeah. Sulaiman, if you'll allow. I believe you're talking about profit after tax, right?

Speaker #4: Correct. Yeah.

Speaker #3: Yeah. So see again we've there's a reason why we don't provide profit after tax guidance because you know there are so many factors that that can impact profit after tax that are not related to you know the operations the underlying operations of the company.

Mohammed Faisal: Correct. Yeah.

[Analyst 2]: Correct. Yeah.

Mohammed Urooj Khan: Yeah. See, again, there's a reason why we don't provide profit after tax guidance, because there are so many factors that can impact profit after tax that are not related to the underlying operations of the company. This includes, obviously, non-operating finance income. You're talking about foreign exchange movements. Again, tax and Zakat assessments as well. The revenue growth and EBITDA margin therefore provides a clearer view of the operating performance of the management. That can directly be influenced by the management as well. Therefore, I think it gives investors enough information to form sometimes their own estimate. But again, I think it's not going to be something that we'll be providing in the future as well.

Muhammad Urooj Khan: Yeah. See, again, there's a reason why we don't provide profit after tax guidance, because there are so many factors that can impact profit after tax that are not related to the underlying operations of the company. This includes, obviously, non-operating finance income. You're talking about foreign exchange movements. Again, tax and Zakat assessments as well. The revenue growth and EBITDA margin therefore provides a clearer view of the operating performance of the management. That can directly be influenced by the management as well. Therefore, I think it gives investors enough information to form sometimes their own estimate. But again, I think it's not going to be something that we'll be providing in the future as well.

Speaker #3: This includes, obviously, non-operating finance income. You're talking about foreign exchange movements, again, tax, and the CATH assessments as well. So, you know, this is the revenue growth, and EBITDA margin therefore provides a clearer view of the operating performance of the management, and that can directly, you know, be influenced by the management as well.

Speaker #3: And therefore I think it gives investors enough information to form you know sometimes their own estimate but again I I I think it's it's not gonna be something that that will be will be providing in the future as well.

Speaker #4: John, Seb, if you may allow me to ask a follow-up question. Mohammed and Suleiman, over the past quarters we've seen that the ICT has not been at the levels of what it has been this quarter.

Mohammed Faisal: Johan, sir, if you may allow me to ask a follow-up question. Mohammed and Sulaiman, over the quarters past, we've seen that the ICT has not been at levels of what it has been this quarter. I'm trying to put words in your mouth, forgive me for that, but I'll just take cues. Sulaiman, you just said that we're going to go ahead and uniform all these projects so that there is a uniformity across quarter on quarter basis so that we don't see fluctuating revenues. Am I correct in understanding this?

[Analyst 2]: Johan, sir, if you may allow me to ask a follow-up question. Mohammed and Sulaiman, over the quarters past, we've seen that the ICT has not been at levels of what it has been this quarter. I'm trying to put words in your mouth, forgive me for that, but I'll just take cues. Sulaiman, you just said that we're going to go ahead and uniform all these projects so that there is a uniformity across quarter on quarter basis so that we don't see fluctuating revenues. Am I correct in understanding this?

Speaker #4: I'm trying to put words in your mouth—forgive me for that—but I'll just take cues. Suleiman, you just said that we're going to go ahead and standardize all these projects so that there is uniformity across quarters, on a quarter-on-quarter basis, so that we don't see fluctuating revenues.

Speaker #4: Am I correct in understanding this?

Speaker #3: We are not proactively doing this or in design, but we're trying to improve utilization, and as a result of that, we're trying to accelerate project delivery in times where there is low delivery as much as possible.

Sulaiman Al Mahmoud: We are not proactively doing this in design, we are trying to improve utilization. As a result of that, we're trying to accelerate project delivery in times where there is no delivery, as much as possible. For me, when I win projects and the timeline, for example, extends for the next nine months, I know that part of the project is falling in Q3 and Q4, I'm trying to push the delivery teams to deliver in Q2 because this is a low season for the company, as evidenced by our revenue. Not the objective is to uniform the revenue. That's not the objective. The objective is operationally to manage our utilization and to utilize our resources to the best of ability.

Soliman Almahmoud: We are not proactively doing this in design, we are trying to improve utilization. As a result of that, we're trying to accelerate project delivery in times where there is no delivery, as much as possible. For me, when I win projects and the timeline, for example, extends for the next nine months, I know that part of the project is falling in Q3 and Q4, I'm trying to push the delivery teams to deliver in Q2 because this is a low season for the company, as evidenced by our revenue. Not the objective is to uniform the revenue. That's not the objective. The objective is operationally to manage our utilization and to utilize our resources to the best of ability.

Speaker #3: So, for me, when I win projects and the timeline, for example, extends for the next nine months, and I know that part of the project is falling in Q3 and Q4, I'm trying to push the delivery teams to deliver in Q2 because this is a low season for the company, as evident by our revenue.

Speaker #3: The objective is not to uniform the revenue; that's not the objective. The objective is, operationally, to manage our utilization—to utilize our resources to the best of our ability.

Speaker #3: And the side results or the benefit of this exercise is reflected in the financials, where you see excellent growth year over year in Q2 and Q1.

Sulaiman Al Mahmoud: The side results or the benefit of this exercise is reflected on the financials, where you see excellent growth year over year in Q2 and Q1. It's not necessarily 100% growth. It's rather a revenue we have accelerated to recognizing in Q1 and Q2.

Soliman Almahmoud: The side results or the benefit of this exercise is reflected on the financials, where you see excellent growth year over year in Q2 and Q1. It's not necessarily 100% growth. It's rather a revenue we have accelerated to recognizing in Q1 and Q2.

Speaker #3: It's not necessarily 100% growth. Rather, it's revenue we have accelerated to recognize in Q1 and Q2.

Speaker #1: Thank you. I appreciate your management. Thank you, John Seb. Thank you, management. I'll take another question from the Q&A box. There is a question regarding the contribution of private sector revenue.

Mohammed Faisal: Sulaiman, I take your last year management. Thank you, Johan sir.

[Analyst 2]: Sulaiman, I take your last year management. Thank you, Johan sir.

[Analyst] (SNB Capital): Thank you, management. I'll take another question from the Q&A box. There is a question regarding the contribution of private sector revenue, and it has grown over the past couple of quarters, and it has grown at a faster rate than government and stc. Can you please discuss the contribution from hyperscalers and AI-related demand for the growth? Also, do you expect private sector demand to structurally outgrow government and stc's own demand over the coming quarters?

Operator: Thank you, management. I'll take another question from the Q&A box. There is a question regarding the contribution of private sector revenue, and it has grown over the past couple of quarters, and it has grown at a faster rate than government and stc. Can you please discuss the contribution from hyperscalers and AI-related demand for the growth? Also, do you expect private sector demand to structurally outgrow government and stc's own demand over the coming quarters?

Speaker #1: And it has grown over the past couple of quarters, and it has grown at a faster rate than government and STC. Can you please discuss the contribution from hyperscalers and AI-related demand for the growth?

Speaker #1: Also, do you expect private sector demand to structurally outgrow government and STC's own demand over the coming quarters?

Speaker #3: We have been continually working on developing more and more services, penetrating private sector accounts. As well as, in alignment with the economy projections, the private sector is contributing more and there's more and more new entrants into the Saudi market.

Sulaiman Al Mahmoud: We have been continually working on developing more services, penetrating private sector accounts, as well as in alignment with the economy projections, the private sector is contributing more, and there's more and more new entrants into the Saudi market. We're all aware of the Arch Cube regulation, for example, and others, and the national champions, et cetera. We see a big opportunity in the private sector. We're actively working to capture this opportunity. Hence, this result of selection of financial with private sector ratio has improved over time. If you have been following our announcements, we have announced lately a big project with Aramco. We have announced a big project with NWC. We're trying closely to work with these large corporates in KSA and other KSA businesses in order to capture more of the business in this domain. I hope this answers.

Soliman Almahmoud: We have been continually working on developing more services, penetrating private sector accounts, as well as in alignment with the economy projections, the private sector is contributing more, and there's more and more new entrants into the Saudi market. We're all aware of the Arch Cube regulation, for example, and others, and the national champions, et cetera. We see a big opportunity in the private sector. We're actively working to capture this opportunity. Hence, this result of selection of financial with private sector ratio has improved over time. If you have been following our announcements, we have announced lately a big project with Aramco. We have announced a big project with NWC. We're trying closely to work with these large corporates in KSA and other KSA businesses in order to capture more of the business in this domain. I hope this answers.

Speaker #3: We're all aware of the Arch Q regulation, for example, and others—and the national champions, et cetera, et cetera. So, we see a big opportunity in the private sector.

Speaker #3: We're actively working to capture this opportunity. Hence, there's this result of reflection on financials where the private sector ratio has improved over time. And if you have been following our announcements, we have announced lately a big project with Aramco.

Speaker #3: We have announced a big project with NWCs. We're working closely with these large corporates in case A and other case A businesses in order to capture more of the business in this domain.

Speaker #3: I hope this answers.

Speaker #1: Yeah, that helps a lot. The next question comes from the line of Evenji. Evenji Nncof, please go ahead, you're unmuted.

[Analyst] (SNB Capital): Yeah. That helps a lot. The next question comes from the line of Evgeny Nankov. Evgeny, please go ahead. You are unmuted.

Operator: Yeah. That helps a lot. The next question comes from the line of Evgenii Annenkov. Evgenii, please go ahead. You are unmuted.

Speaker #4: Hi. can you hear me?

Evgeny Nankov: Hi. Can you hear me?

[Analyst 3]: Hi. Can you hear me?

Speaker #1: Yes. Clear. Please go ahead.

[Analyst] (SNB Capital): Yes. We can hear you. Please go ahead.

Operator: Yes. We can hear you. Please go ahead.

Speaker #4: Great, thank you so much, and congratulations on the strong results. I have two questions, please. First, coming back to revenue growth, if I may, I would like to see the breakdown by subsidiary instead of by segment.

Evgeny Nankov: Great. Thank you so much, congratulations on the strong results. I have two questions, please. First, again, coming back to revenue growth, if I can just look at the breakdown by subsidiary instead of by segment. I can see that Giza, which you now call Pulse, was leading the consolidated growth for the past five quarters. Can you please give more color? Is it still benefiting from some project allocation from solutions that you discussed in the past, or is it predominantly driven by new opportunities, including in North Africa? Also on Pulse, why such a strong revenue growth acceleration not leading to gross margin improvement yet? Do you expect most of the operating leverage to be crystallized rather at the EBITDA level? My second question is on the AI momentum. Can you please give some color as to how it changes your business model?

[Analyst 3]: Great. Thank you so much, congratulations on the strong results. I have two questions, please. First, again, coming back to revenue growth, if I can just look at the breakdown by subsidiary instead of by segment. I can see that Giza, which you now call Pulse, was leading the consolidated growth for the past five quarters. Can you please give more color? Is it still benefiting from some project allocation from solutions that you discussed in the past, or is it predominantly driven by new opportunities, including in North Africa? Also on Pulse, why such a strong revenue growth acceleration not leading to gross margin improvement yet? Do you expect most of the operating leverage to be crystallized rather at the EBITDA level? My second question is on the AI momentum. Can you please give some color as to how it changes your business model?

Speaker #4: I can see that Giza, which you now call Pulse, was leading the consolidated growth for the past five quarters. Can you please give more color?

Speaker #4: Is it still benefiting from some project allocation from solutions that you discussed in the past, or is it predominantly driven by new opportunities, including in North Africa?

Speaker #4: And also on Pulse, why is such strong revenue growth acceleration not leading to gross margin improvement yet? Or do you expect most of the operating leverage to crystallize rather at the EBITDA level?

Speaker #4: And my second question is on the AI momentum. Can you please give some color as to how changes to your business model may be on the risk side in terms of contract structure?

Evgeny Nankov: Maybe on the risk side, in terms of contract structure, are you seeing any changes from billable, any shift from billable hours to outcome-based pricing? As for the opportunities, do you see potential to rely more on coding agents to optimize your cost base? Thank you.

[Analyst 3]: Maybe on the risk side, in terms of contract structure, are you seeing any changes from billable, any shift from billable hours to outcome-based pricing? As for the opportunities, do you see potential to rely more on coding agents to optimize your cost base? Thank you.

Speaker #4: Are you seeing any changes from billable hours—any shift from billable hours to outcome-based pricing? And as for the opportunities, do you see potential to rely more on coding agents to optimize your cost base?

Speaker #4: Thank you.

Speaker #3: Fair. So, for the first question with Pulse, yes, there's a lot of growth with Pulse, and we're investing heavily in the capabilities of Pulse, and leveraging also the offshore center that they offer us from the Egypt region.

Sulaiman Al Mahmoud: For the first question with Pulse, yes, there's a lot of growth with Pulse, investing heavily in the capabilities of Pulse, leveraging also the offshore centers that they offer us from the Egypt region, hence this growth. Part of the growth is driven from projects that are being subcontracted from Solutions to benefit end clients, end businesses with the government or private sector. It's part of our strategy to really double down on the capabilities we have with Pulse and grow them more, as well as to leverage subsidiaries of Pulse, where we have several arms that are providing different services. One of which is labs we have previously acquired, specialized in SAP and others as well, whom we're optimistic about their potential for growth in the upcoming periods. For your second question.

Soliman Almahmoud: For the first question with Pulse, yes, there's a lot of growth with Pulse, investing heavily in the capabilities of Pulse, leveraging also the offshore centers that they offer us from the Egypt region, hence this growth. Part of the growth is driven from projects that are being subcontracted from Solutions to benefit end clients, end businesses with the government or private sector. It's part of our strategy to really double down on the capabilities we have with Pulse and grow them more, as well as to leverage subsidiaries of Pulse, where we have several arms that are providing different services. One of which is labs we have previously acquired, specialized in SAP and others as well, whom we're optimistic about their potential for growth in the upcoming periods. For your second question.

Speaker #3: Hence, this growth—part of the growth is driven from projects that are being subcontracted from solutions to benefit end clients or end businesses, whether with the government or private sector.

Speaker #3: So, it's part of our strategy to double down on the capabilities we have in Pulse and grow them more, as well as to leverage subsidiaries of Pulse, where we have several arms that are providing different services, one of which is labs.

Speaker #3: We have previously acquired specialized expertise on SAP, as well as others, whom we're optimistic about regarding their potential for growth in the upcoming periods. For your second question, regarding leveraging agentic AI and AI overall in our delivery, there are internal initiatives to complement our engineers and our staff members in their work to deliver as much as possible.

Sulaiman Al Mahmoud: For leveraging Agentic AI and AI overall in our delivery, there are internal initiatives to complement our engineers and our staff members in their work to delivery as much as possible. On the client side also, there is a lot of difficulties to use tools as well as the readiness actually, to implement AI, where possible. We are facing a lot of difficulties where the infrastructure is not ready. Looking at AI overall, there are different stacks that need to be ready for the clients to actually leverage and utilize AI. Part of it is the models, the data, the compute layers, all these are not actually ready.

Soliman Almahmoud: For leveraging Agentic AI and AI overall in our delivery, there are internal initiatives to complement our engineers and our staff members in their work to delivery as much as possible. On the client side also, there is a lot of difficulties to use tools as well as the readiness actually, to implement AI, where possible. We are facing a lot of difficulties where the infrastructure is not ready. Looking at AI overall, there are different stacks that need to be ready for the clients to actually leverage and utilize AI. Part of it is the models, the data, the compute layers, all these are not actually ready.

Speaker #3: However, on the client side also, there are a lot of difficulties in using tools, as well as the readiness to actually implement AI where possible.

Speaker #3: We were facing a lot of difficulties where the infrastructure is not ready. So, looking at the AI overall, there are different stacks that need to be ready for the clients to actually leverage and utilize AI.

Speaker #3: Part of it is the models, the data, the compute layers—all of these are not actually ready. So, we have been approached by certain clients for consultancies, for discussions, in order to figure out with them what would be the roadmap for them to be AI-ready before they actually start using use cases and reaping the benefits from that.

Sulaiman Al Mahmoud: We have been a partner for certain clients, for consultancies, for discussions in order to figure out with them what would be the roadmap to be AI-ready before they actually start to actually use cases, and reaping the benefits from that.

Soliman Almahmoud: We have been a partner for certain clients, for consultancies, for discussions in order to figure out with them what would be the roadmap to be AI-ready before they actually start to actually use cases, and reaping the benefits from that.

Speaker #1: Thank you, Suleiman. May I just ask a follow-up on Pulse? What is the current contribution of non-Saudi revenue, maybe either to Pulse or Solutions overall?

Evgeny Nankov: Thank you, Sulaiman. May I just ask a follow-up on Pulse? What is the current contribution of non-Saudi revenue, maybe either to Pulse or Solutions overall?

[Analyst 3]: Thank you, Soliman. May I just ask a follow-up on Pulse? What is the current contribution of non-Saudi revenue, maybe either to Pulse or Solutions overall?

Speaker #3: Roger. You support with that?

Sulaiman Al Mahmoud: Aurore, do you respond to that?

Soliman Almahmoud: Urooj, do you respond to that?

Speaker #2: Yeah. So again, Evgeny, thank you. But I think if you— I can guide you on a range rather than having, you know, a fixed percent.

Mohammed Urooj Khan: Again, Evgeny, thank you. I think I can guide you on a range rather than having a fixed percent. You're talking about somewhere in the range of, what, 20% to 30% revenue now from North Africa. Whereas the focus is now to double down on GCC and in particular Saudi Arabia. Right. I would just want to add one more point. Pulse and also I'd like to add Upsource operate to their own go to market and also joint opportunities with Solutions, as Sulaiman was mentioning a while back. This creates a significant post-acquisition synergies, obviously through cross-selling, broader customer access, and shared delivery capabilities. The consolidated group performance provides, in my opinion, a more complete view rather than assessing each entity in its isolation, given how the group is structured.

Muhammad Urooj Khan: Again, Evgenii, thank you. I think I can guide you on a range rather than having a fixed percent. You're talking about somewhere in the range of, what, 20% to 30% revenue now from North Africa. Whereas the focus is now to double down on GCC and in particular Saudi Arabia. Right. I would just want to add one more point. Pulse and also I'd like to add Upsource operate to their own go to market and also joint opportunities with Solutions, as Sulaiman was mentioning a while back. This creates a significant post-acquisition synergies, obviously through cross-selling, broader customer access, and shared delivery capabilities. The consolidated group performance provides, in my opinion, a more complete view rather than assessing each entity in its isolation, given how the group is structured.

Speaker #2: So, you're talking about somewhere in the range of, what, 20 to 30 percent revenue now from North Africa, whereas the focus is now to double down on GCC, and in particular, Saudi Arabia.

Speaker #2: Right? But I would just want to, you know, add one more point. So Pulse, and also I'd like to add, upsource operates through, you know, their own go-to-market and also joint opportunities with solutions, as Suleiman was mentioning a while back.

Speaker #2: Now this creates a significant you know post-acquisition synergies. Obviously through cross-selling you know broader customer access and shared delivery capabilities. So you know the consolidated group performance you know provides in in my opinion a more complete view rather than assessing each in entity in its isolation given how the group is structured.

Speaker #2: That does not mean that, okay, the individual entities' performance is not entirely relevant. But I think most of the time we need to see the group performance overall in order to judge in which direction it's heading.

Mohammed Urooj Khan: That does not mean that, okay, the individual entities performance are not entirely relevant. I think most of the times, we need to see the group performance overall in order to judge in which direction it's heading. Thank you.

Muhammad Urooj Khan: That does not mean that, okay, the individual entities performance are not entirely relevant. I think most of the times, we need to see the group performance overall in order to judge in which direction it's heading. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you. Thank you Matt. Thank you management. I'll take a question from the Q&A box. the the question in the Q&A box reads what is the what is constraining the momentum in the up upsource segment?

Evgeny Nankov: Thank you. Thank you, Amaar.

[Analyst 3]: Thank you. Thank you, management.

[Analyst] (SNB Capital): Thank you to management. I'll take a question from the Q&A box. The question in the Q&A box reads: what is constraining the momentum in the Upsource segment? Is enterprise demand softening, or is it market beginning to shift towards AI-driven automated services? How are you adjusting your offering to remain competitive?

Operator: Thank you to management. I'll take a question from the Q&A box. The question in the Q&A box reads: what is constraining the momentum in the Upsource segment? Is enterprise demand softening, or is it market beginning to shift towards AI-driven automated services? How are you adjusting your offering to remain competitive?

Speaker #1: Is enterprise demand softening, or is the market beginning to shift towards AI-driven automated services? And how are you adjusting your offering to remain competitive?

Speaker #3: We believe there are a lot of challenges in government contracts when it comes to outsourcing and manpower engagement with the government, and a lot of these are being reviewed and delayed, which may have resulted in a bit of a slowdown.

Sulaiman Al Mahmoud: We believe there is a lot of challenges in government contracts when it comes to outsourcing and manpower engagement with the government, and a lot of these are being reviewed and delayed, which may have result in a bit of a slow. However, we're already coming up with alternative offerings to our clients that would be more efficient and rely more on BPO services rather than manpower engagement. However, this is yet to be seen in terms of impact and results until the year end, Inshallah.

Soliman Almahmoud: We believe there is a lot of challenges in government contracts when it comes to outsourcing and manpower engagement with the government, and a lot of these are being reviewed and delayed, which may have result in a bit of a slow. However, we're already coming up with alternative offerings to our clients that would be more efficient and rely more on BPO services rather than manpower engagement. However, this is yet to be seen in terms of impact and results until the year end, Inshallah.

Speaker #3: However, we're already coming up with alternative offerings to our clients that would be more efficient and rely more on BBO services rather than manpower engagements.

Speaker #3: However, this is yet to be seen in terms of impact and results until the year end, inshallah.

Speaker #1: Thank you, management. The next question comes from the line of Ankur Agrawal. Ankur, please go ahead. You're unmuted.

[Analyst] (SNB Capital): Thank you, management. The next question comes from the line of Ankur Agarwal. Ankur, please go ahead. You're unmuted.

Operator: Thank you, management. The next question comes from the line of Ankur Agarwal. Ankur, please go ahead. You're unmuted.

Speaker #4: I think I have a couple of questions from my side. Could you give us a flavor of how your order backlog is split across sectors, and how much of it is private versus government versus STC?

Ankur Agarwal: I think couple of questions from my side. Can you give us a flavor of how is your order backlog split across sectors, and how much of it is private versus government versus stc? That would be very helpful. Secondly, I think there was a question around the revenue trajectory of Pulse, which has been doing very well. I think it seems that you've outlined a revenue target for Pulse by 2028 of, I think SAR 1 billion or so, I think you plan to list this business. Can you elaborate a bit more on the thought process, in terms of the benefits from listing Pulse?

[Analyst 4]: I think couple of questions from my side. Can you give us a flavor of how is your order backlog split across sectors, and how much of it is private versus government versus stc? That would be very helpful. Secondly, I think there was a question around the revenue trajectory of Pulse, which has been doing very well. I think it seems that you've outlined a revenue target for Pulse by 2028 of, I think SAR 1 billion or so, I think you plan to list this business. Can you elaborate a bit more on the thought process, in terms of the benefits from listing Pulse?

Speaker #4: Right? So that would be very helpful. And secondly I think I think there was a question around the revenue trajectory of Pulse which has been very which has been doing very well.

Speaker #4: And I think it seems that you've outlined the revenue target for Pulse by 2028 of, I think, $1 billion or so.

Speaker #4: And I think you plan to list this business. Can you elaborate a bit more on the thought process in terms of the benefits from listing Pulse?

Speaker #3: I'll leave the first question to Roger. But I don't think we can disclose the backlog segments at this moment. Ankur, in terms of Pulse, there have never been any official statements on whether it will be listed or if the target for 2028 is $1 billion.

Sulaiman Al Mahmoud: I'll leave the first question to Aurore, I don't think we can disclose the backlog segments at this moment, Ankur. In terms of Pulse, there have never been an official statement whether it will be listed or if the target by 2028 is SAR 1 billion. The only guidance is provided is an annual basis, is what's provided through solutions by stc, in the format that you're receiving in the Bester reports.

Soliman Almahmoud: I'll leave the first question to Urooj, I don't think we can disclose the backlog segments at this moment, Ankur. In terms of Pulse, there have never been an official statement whether it will be listed or if the target by 2028 is SAR 1 billion. The only guidance is provided is an annual basis, is what's provided through solutions by stc, in the format that you're receiving in the Bester reports.

Speaker #3: The only guidance provided on an annual basis is what's provided through Solutions by STC, in the format that you're receiving in the BEST reports.

Speaker #4: Yeah, and I think the rationale for listing Pulse, for example—what's the thought process? How should we think about it?

Ankur Agarwal: I think the rationale for listing Pulse, for example, what is the thought process? How should we think about.

[Analyst 4]: I think the rationale for listing Pulse, for example, what is the thought process? How should we think about.

Speaker #3: As I said, there is no official communication that Pulse will be listed. I'm not sure where this news came from, but officially we have not announced that Pulse will be listed.

Sulaiman Al Mahmoud: As I said.

Soliman Almahmoud: As I said.

Ankur Agarwal: the medium-term plan?

[Analyst 4]: the medium-term plan?

Sulaiman Al Mahmoud: There is no official communication that Pulse will be listed. I'm not sure where this news came out from, but officially we have not announced that Pulse will be listed.

Soliman Almahmoud: There is no official communication that Pulse will be listed. I'm not sure where this news came out from, but officially we have not announced that Pulse will be listed.

Speaker #2: Yeah, and rightly so, Suleiman. So, we do not provide, you know, a backlog on the segment level. And there is a reason behind it.

Mohammed Urooj Khan: Yeah. Rightly so, Sulaiman. We do not provide a backlog on the segment level. There is a reason behind it. In a lot of opportunities in the kind of business that we are in, we are talking about serving the entire IT value chain, ICT value chain. There could be scope that is of mixed nature, it poses a lot of challenges in terms of clearly defining that how much balance of the deliverable business is finally defined as either Core ICT, IT Managed and Operational or Digital Services. It becomes very tricky when it comes to defining scope in that sense from a backlog perspective, because the revenue itself, it's historical, it's being delivered, it's very easy to report.

Muhammad Urooj Khan: Yeah. Rightly so, Sulaiman. We do not provide a backlog on the segment level. There is a reason behind it. In a lot of opportunities in the kind of business that we are in, we are talking about serving the entire IT value chain, ICT value chain. There could be scope that is of mixed nature, it poses a lot of challenges in terms of clearly defining that how much balance of the deliverable business is finally defined as either Core ICT, IT Managed and Operational or Digital Services. It becomes very tricky when it comes to defining scope in that sense from a backlog perspective, because the revenue itself, it's historical, it's being delivered, it's very easy to report.

Speaker #2: So you know in a lot of opportunities in the kind of business that we are in where you're talking about you know serving the entire IT value chain ICT value chain you know there could be scope that is of mixed nature and you know so it it it poses a lot of you know challenges in terms of clearly defining that how much balance of the deliverable business is you know finally defined as either core ICT IT management operational or digital services.

Speaker #2: So it it gets becomes very tricky when it comes to you know defining scope in in in that sense from a backlog perspective because revenue itself it's historical it's being delivered it's it's very easy to report on.

Speaker #4: Okay. I think one follow up if I may around the recurring revenue percentage in your business. And I think I mean I think you basically had a plan to increase the percentage of re recurring revenue at some point.

Ankur Agarwal: Okay. I think one follow-up, if I may, around the recurring revenue percentage in your business, you basically had a plan to increase the percentage of recurring revenue at some point. Can you outline some major projects that you are doing which you can argue are recurring revenue? There was this parking contract that you alluded to in the past.

[Analyst 4]: Okay. I think one follow-up, if I may, around the recurring revenue percentage in your business, you basically had a plan to increase the percentage of recurring revenue at some point. Can you outline some major projects that you are doing which you can argue are recurring revenue? There was this parking contract that you alluded to in the past.

Speaker #4: So, can you outline some major projects that you are doing, which you can argue are recurring revenue, right? I mean, there was this parking contract that you needed to in the past.

Speaker #3: We continue to work on them and improving our revenue mix, and increasing the weight on recurring as it is more healthy for our revenue going forward.

Sulaiman Al Mahmoud: We continue to work on improving our revenue mix and increasing the weight on recurring as it is more healthy for our revenue going forward. Some of the initiatives including doubling down on PPP projects, private-public, public-private partnerships, where the revenue is more of a recurring nature of these engagements, such as DMAS-Riyadh, as you guys are aware. As well as developing new products, including and not limited to the ones we have discussed here in the earning call in previous quarters, such as GPU as a Service, OneCloud and other products. These would be more of recurring nature. In addition to enhancing and updating and expanding parts of our current products, including iSPAN, cloud products overall, managed services products as well, and so on and so forth. It's a continuous mission for the company and management to improve the share of recurring revenue, given its healthy nature.

Soliman Almahmoud: We continue to work on improving our revenue mix and increasing the weight on recurring as it is more healthy for our revenue going forward. Some of the initiatives including doubling down on PPP projects, private-public, public-private partnerships, where the revenue is more of a recurring nature of these engagements, such as DMAS-Riyadh, as you guys are aware. As well as developing new products, including and not limited to the ones we have discussed here in the earning call in previous quarters, such as GPU as a Service, OneCloud and other products. These would be more of recurring nature. In addition to enhancing and updating and expanding parts of our current products, including iSPAN, cloud products overall, managed services products as well, and so on and so forth. It's a continuous mission for the company and management to improve the share of recurring revenue, given its healthy nature. This is being done through different means, whether venturing into new businesses or creating new products within.

Speaker #3: some of the initiatives including doubling down on PPP projects private private public public private partnerships where the revenue is more of reoccurring nature in these engagements such as REMAS Riyadh as you guys are are aware.

Speaker #3: As well as developing new products, including but not limited to the ones we have discussed here in the earnings call in previous quarters, such as GBO as a Service, OneCloud, and other products.

Speaker #3: These would be more of a recurring nature, in addition to enhancing, upgrading, and expanding our current products, including iSpan Cloud products, overall managed services products as well, and so on and so forth.

Speaker #3: So it's a continuous mission for the company and management to improve the share of recurring revenue given its healthy nature. This is being done through different means, whether by venturing into new businesses or creating new products within.

Sulaiman Al Mahmoud: This is being done through different means, whether venturing into new businesses or creating new products within.

Speaker #4: All right. Very helpful. Thank you.

Ankur Agarwal: All right. Very helpful. Thank you.

[Analyst 4]: All right. Very helpful. Thank you.

Speaker #1: Thank you, management. I'll take another question from the Q&A box. The question reads: Given the ongoing macro headwinds in Egypt and North Africa, is Pulse prioritizing Saudi cross-border delivery, or are you still committed to building out local operations in the region?

[Analyst] (SNB Capital): Thank you, management. I will take another question from the Q&A box. The question reads: Given the ongoing macro headwinds in Egypt and North Africa, is Pulse prioritizing Saudi cross-border delivery, or are you still committed to building out local operations in region?

Operator: Thank you, management. I will take another question from the Q&A box. The question reads: Given the ongoing macro headwinds in Egypt and North Africa, is Pulse prioritizing Saudi cross-border delivery, or are you still committed to building out local operations in region?

Speaker #3: Sorry, can you go again, please?

Sulaiman Al Mahmoud: I am sorry, can you go again, please?

Soliman Almahmoud: I am sorry, can you go again, please?

Speaker #1: Yes, there is a question which reads: Given the ongoing macro headwinds in Egypt and North Africa, is Pulse prioritizing Saudi cross-border delivery, or are you still committed to building out local operations in the region?

[Analyst] (SNB Capital): Yes. There is a question which reads: Given the ongoing macro headwinds in Egypt and North Africa, is Pulse prioritizing Saudi cross-border delivery, or are you still committed to building out local operations in the region?

Operator: Yes. There is a question which reads: Given the ongoing macro headwinds in Egypt and North Africa, is Pulse prioritizing Saudi cross-border delivery, or are you still committed to building out local operations in the region?

Speaker #3: We're both focused on serving the Saudi market from a Pulse point of view, as well as working on their local market, as it's an important part of their business mix—and there is potential within the Egyptian market.

Sulaiman Al Mahmoud: We're both focused on serving the Saudi markets from pulse point of view as well as working on their local market as it's important part of their business mix and there is potential within the Egyptian market. There is concern into the currency fluctuation and the macroeconomic factors. However, the management over the last several years since the acquisition of pulse, we have done a lot of mitigations, and we are optimistic that these mitigations are minimizing the impacts of these macroeconomic factors. To name a few and to provide thoughts, a lot of our contracts in non KSA regions are done in US dollars to hedge the fluctuation of currency. If they're not done in US dollars, they're done in the local currency linked to the conversion rate of US dollar. That's one off.

Soliman Almahmoud: We're both focused on serving the Saudi markets from pulse point of view as well as working on their local market as it's important part of their business mix and there is potential within the Egyptian market. There is concern into the currency fluctuation and the macroeconomic factors. However, the management over the last several years since the acquisition of pulse, we have done a lot of mitigations, and we are optimistic that these mitigations are minimizing the impacts of these macroeconomic factors. To name a few and to provide thoughts, a lot of our contracts in non KSA regions are done in US dollars to hedge the fluctuation of currency. If they're not done in US dollars, they're done in the local currency linked to the conversion rate of US dollar. That's one off.

Speaker #3: There is concern regarding currency fluctuation and the macroeconomic factors. However, the management, over the last several years since the acquisition of Pulse, has implemented a lot of mitigations, and we are optimistic that these mitigations are minimizing the impacts of these macroeconomic factors.

Speaker #3: to name a few and and to provide trust a lot of our contracts and and non case A regions are done in US dollars to hedge the fluctuation of currency and if they're not done in US dollars they're done in in the local currency.

Speaker #3: Linked to the conversion rate of the US dollar—that’s one off—and others, we’re focusing on clients within these countries, international clients who would pay from outside of the country, as well as other mitigations.

Sulaiman Al Mahmoud: Others with focusing on clients within these countries and international clients who would pay from outside of the country as well as other mitigations. We have done a lot in order to make sure that we are mitigated or shielded as much as possible from these macroeconomic factors. We remain committed to operating pulse in KSA as well as in their native region to extract as much value as possible.

Soliman Almahmoud: Others with focusing on clients within these countries and international clients who would pay from outside of the country as well as other mitigations. We have done a lot in order to make sure that we are mitigated or shielded as much as possible from these macroeconomic factors. We remain committed to operating pulse in KSA as well as in their native region to extract as much value as possible.

Speaker #3: So, we have done a lot in order to make sure that we are mitigated or shielded as much as possible from these macroeconomic factors.

Speaker #3: But we remain committed to operating Pulse in case A, as well as in their native region, to extract as much value as possible.

Speaker #1: Thank you, management. The next question comes from the line of Abdulaziz Alawad. Abdulaziz, please go ahead.

[Analyst] (SNB Capital): Thank you, management. The next question comes from the line of Abdulaziz Alward. Abdulaziz, please go ahead.

Operator: Thank you, management. The next question comes from the line of Abdulaziz Alward. Abdulaziz, please go ahead.

Speaker #5: Hi. Am I audible?

Speaker #3: Yes please go ahead.

Abdulaziz Alward: Am I audible?

[Analyst 5]: Am I audible?

Speaker #5: Yes, thank you, management, for your time. I just have one question regarding data centers. You've mentioned in previous calls that integration into data centers is part of the solutions business.

[Analyst] (SNB Capital): Yes, please go ahead.

Operator: Yes, please go ahead.

Abdulaziz Alward: Yes. Thank you, management, for the time. I just have one question regarding data centers. You've mentioned in previous calls that integration into data centers is part of solutions business. From what I know from center3, they're planning to reach big capacities even in 2027. I just want to understand from solutions side, how can we look at it? What's your expectation from that? I know you won't give us numbers, but how can we factor it in terms of considering the huge capacity that's coming and assuming that they will be utilized?

[Analyst 5]: Yes. Thank you, management, for the time. I just have one question regarding data centers. You've mentioned in previous calls that integration into data centers is part of solutions business. From what I know from center3, they're planning to reach big capacities even in 2027. I just want to understand from solutions side, how can we look at it? What's your expectation from that? I know you won't give us numbers, but how can we factor it in terms of considering the huge capacity that's coming and assuming that they will be utilized?

Speaker #5: And from from what I know and from center three they have like a big targets and they're planning to reach a big capacities even in twenty twenty seven.

Speaker #5: So I just want to understand from solutions side how how how can we look at it? What what's your expectation from that? I know you you won't give us numbers or but how how how can we factor this in in terms of considering the huge capacity that's coming and so assuming that they will be utilized.

Speaker #3: Fair. But just to clarify we don't own the center. Center three owns the center build them out. We usually are subcontracted or contracted from center three or any other entity in the market whenever they have a data center.

Sulaiman Al Mahmoud: Fair. Just to clarify, we don't own data centers. center3 own data centers. We build them out. We usually are subcontracted or contracted from center3 or any other entity in the market whenever they have a data center, either to support them in building these data centers or to design and activate the components within, depending on this client. Specifically, we have done several data centers, whether for stc, for Alibaba and other clients in the market. We remain optimistic about our own potential in the market for building and activating and operating data centers in KSA. This is something that we're actively working on, bidding and engaging with prospect clients where possible.

Soliman Almahmoud: Fair. Just to clarify, we don't own data centers. center3 own data centers. We build them out. We usually are subcontracted or contracted from center3 or any other entity in the market whenever they have a data center, either to support them in building these data centers or to design and activate the components within, depending on this client. Specifically, we have done several data centers, whether for stc, for Alibaba and other clients in the market. We remain optimistic about our own potential in the market for building and activating and operating data centers in KSA. This is something that we're actively working on, bidding and engaging with prospect clients where possible.

Speaker #3: Either to support them in building these data centers or to design and activate the active components within. Depending on on this client and Mr. P who have done several data centers whether for SOC for Alibaba and other clients in the market.

Speaker #3: We remain optimistic about our own potential in the market for building, activating, and operating data centers in case A. This is something that we're actively working on.

Speaker #3: bidding and engaging with prospect clients where possible.

Speaker #5: So, just a follow-up: in terms of O&M for these data centers, would you be the one doing it?

Abdulaziz Alward: Just to follow up, in terms of O&M for these data centers, would you be the one doing it?

[Analyst 5]: Just to follow up, in terms of O&M for these data centers, would you be the one doing it?

Speaker #3: Yes we we we do both. We our range of services includes the full cycle from support and designing building and operating and maintenance afterwards.

Sulaiman Al Mahmoud: Yes, we do both. Our range of services includes the full cycle from support and designing, building, and operating and maintenance afterwards for the project. We have done several, which we can reference to, part of like one of Aramco data centers, the MAM7 and Alibaba data center with stc, and stc data centers previously. This is part of our offering since a long time.

Soliman Almahmoud: Yes, we do both. Our range of services includes the full cycle from support and designing, building, and operating and maintenance afterwards for the project. We have done several, which we can reference to, part of like one of Aramco data centers, the MAM7 and Alibaba data center with stc, and stc data centers previously. This is part of our offering since a long time.

Speaker #3: For the product, we have done several which we can reference to, like one of them is the Aramco data centers, the MAM 7, and Alibaba data center with SEC, and SEC data centers previously.

Speaker #3: So this has been part of our offering for a long time.

Speaker #5: Okay. And the O&M part would be Solutions' core business, right?

Abdulaziz Alward: The O&M part would be Solution contracted with, right?

[Analyst 5]: The O&M part would be Solution contracted with, right?

Speaker #3: Yes, we're contracted as a service provider for operational maintenance of data centers from whomever owns the data center.

Sulaiman Al Mahmoud: Yes. We are contracted as a service provider for operational maintenance of data centers from whomever owns the data centers.

Soliman Almahmoud: Yes. We are contracted as a service provider for operational maintenance of data centers from whomever owns the data centers.

Speaker #5: Yeah. Me meaning it wouldn't be Pulse or Upsource. It wouldn't be Solution.

Abdulaziz Alward: Yeah. Meaning it wouldn't be pulse or outsourced. It would be Solution.

[Analyst 5]: Yeah. Meaning it wouldn't be pulse or outsourced. It would be Solution.

Speaker #3: Upsource? No, this is by Solutions, yes.

Sulaiman Al Mahmoud: Outsourced? No, this is by Solutions. Yes.

Soliman Almahmoud: Outsourced? No, this is by Solutions. Yes.

Speaker #5: Yeah. Okay. And and okay so what what what is like can you give us in terms of like contribution just from this data center segment or how how big it is?

Abdulaziz Alward: Okay. Can you give us in terms of contribution just from this data centers segment of how big it is?

[Analyst 5]: Okay. Can you give us in terms of contribution just from this data centers segment of how big it is?

Speaker #3: This goes to the subsegment precisely where we only disclose the three announced segments, called SD, ATM services, as well as services. Data centers would be almost split between these three depending on the type of services within.

Sulaiman Al Mahmoud: Disclose sub-segment precisely. We have only disclosed the three announced segments called ICT, ITMOS, and corporate services, as well as other services. Data centers would be almost split between these three, depending on the type of services within for each product.

Soliman Almahmoud: Disclose sub-segment precisely. We have only disclosed the three announced segments called ICT, ITMOS, and corporate services, as well as other services. Data centers would be almost split between these three, depending on the type of services within for each product.

Speaker #3: For each project.

Speaker #5: And the O&M part will support the recurring revenue since they're longer term, right?

Abdulaziz Alward: The O&M part will support the recurring revenue since they are longer term?

[Analyst 5]: The O&M part will support the recurring revenue since they are longer term?

Speaker #3: Yes data centers usually a big bulk would be around the build out if it were a contract for that. But O and M is usually long term usually five years or more.

Sulaiman Al Mahmoud: Yes. Data centers usually, a big part would be around the build-out if it were a contract for that. O&M is usually long term, usually five years or more.

Soliman Almahmoud: Yes. Data centers usually, a big part would be around the build-out if it were a contract for that. O&M is usually long term, usually five years or more.

Speaker #5: Okay. Very good. Thank you.

Abdulaziz Alward: Okay. Very clear. Thank you.

[Analyst 5]: Okay. Very clear. Thank you.

Speaker #1: Thank you management. I'll take just one last question in from the Q and A box because we are running out of time. the question reads I can you please give a a heads up on the PPP projects and if you can provide any guidance on the timeline and we should be expecting.

[Analyst] (SNB Capital): Thank you, management. I'll take just one last question in from the Q&A box, because we are running out of time. The question reads, can you please give a heads up on the PPP projects, and if you can provide any guidance on the timeline we should be expecting?

Operator: Thank you, management. I'll take just one last question in from the Q&A box, because we are running out of time. The question reads, can you please give a heads up on the PPP projects, and if you can provide any guidance on the timeline we should be expecting?

Speaker #3: Is that specific to PPP projects, or...

Sulaiman Al Mahmoud: Is it specific PPP projects or-

Soliman Almahmoud: Is it specific PPP projects or-

Speaker #1: General rollout of PPP projects.

[Analyst] (SNB Capital): General rollout of PPP projects.

Operator: General rollout of PPP projects.

Speaker #3: We're optimistic in terms of PPP. We have won several projects that have previously been announced, whether REMAT, SPF, and others. We're still active; we have an active pipeline.

Sulaiman Al Mahmoud: We're optimistic in terms of PPP. We have won several projects that have previously announced, whether REMA, SPF, AfroSEA, and others. We have an active pipeline. We're bidding. Whenever an opportunity comes up, we will announce that in due time, inshallah.

Soliman Almahmoud: We're optimistic in terms of PPP. We have won several projects that have previously announced, whether REMA, SPF, AfroSEA, and others. We have an active pipeline. We're bidding. Whenever an opportunity comes up, we will announce that in due time, inshallah.

Speaker #3: We're bidding whenever our opportunity comes up. We will announce that in due time, inshallah.

Speaker #1: Thank you, management. As we are reaching the end of our designated time, I'll hand over the mic to management for the concluding remarks.

[Analyst] (SNB Capital): Thank you, Management. As we are reaching the end of our designated time, I'll hand over the mic to the Management for the concluding remarks. Management, please go ahead. Management, please go ahead.

Operator: Thank you, Management. As we are reaching the end of our designated time, I'll hand over the mic to the Management for the concluding remarks. Management, please go ahead. Management, please go ahead.

Speaker #1: Management, please go ahead. Management, please go ahead.

Speaker #3: Okay, thank you everyone for joining us today, and thank you for your trust in our solutions. We look forward to speaking to you again next quarter.

Abdullah Al-Dayal: Thank you everyone for joining us today, and thank you for your trust in Solutions. We look forward to speaking to you again next quarter. Have a good day.

Abdullah Al-Dayel: Thank you everyone for joining us today, and thank you for your trust in Solutions. We look forward to speaking to you again next quarter. Have a good day.

Speaker #3: Have a good day.

Speaker #1: NB Capital would like to thank Solutions Management for taking the time to conduct this call. We would also like to thank all the participants for attending.

[Analyst] (SNB Capital): SNB Capital would like to thank Solutions management for taking time out to conduct this call. We would also like to thank all the participants for attending. We wish you a pleasant day. Thank you very much. You may now disconnect.

Operator: SNB Capital would like to thank Solutions management for taking time out to conduct this call. We would also like to thank all the participants for attending. We wish you a pleasant day. Thank you very much. You may now disconnect.

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