Q2 2026 Rasan Information Technology Co Earnings Call
Speaker #1: 21, if he wants to, he or she wants to go through it, but it's mainly related to the forward-looking statements that are part of this presentation.
Speaker #1: Where the company has no legal liability on that, nothing more beyond that. Thank you. Nicola, I'm handing it over to you.
Speaker #2: Thank you, Zaki, and thanks everybody for joining this second quarter results release. If you go to the next slide, we'll discuss a brief business update, then we'll enter into the financial performance. As the screen was saying, we'll answer the questions at the end.
Speaker #2: Now, if you go to the next slide, let me start saying that I'm proud to steer and to continue steering a team that deliver in a very consistent manner since IPO.
Speaker #2: We IPO the business 2 years ago, since then we continue growing but also we not only continue but we accelerated being wild. We accelerated on growth, we accelerated on profitability, we accelerated on product development and on supporting the transformation of the economy that is happening across the kingdom.
Speaker #2: So over those 2 years, and this journey, we are now focusing on Q2 where the where we deliver the quite outstanding growth, as you have seen, 111% year on year, the profitability remains at the upper side of our guidance at 46%, in the adjusted EBITDA, and as I was mentioning, I'm particularly proud of what the team has been building it is continuing to build from a digital product point of view.
Speaker #2: That means expanding insurance, expanding financial services, and continuing to support insurance companies and banks across the Kingdom to distribute in a more effective manner, with sustained technology innovation.
Speaker #2: Since the IPO, just as a brief note, we did deliver while delivering in consistency, we grew the market cap 252%, that again testament of the quality and consistency of the delivery that we are trying to maintain over the coming period.
Speaker #2: So if you go to the next slide, the interesting part of this, the most interesting part of this growth, is that it does come from not from a single pillar but it does come across all the main pillars that we that constitute our mid and long-term core strategy.
Speaker #2: So we have motor retail, that delivered 79% growth year on year, in Q2, motor leasing 153% growth, health 34%, and other products it is further accelerating with 751% growth year on year.
Speaker #2: So if I just mention a few of the dynamics that we have underlying those pillars, in motor retail there is continued shift to comprehensive, okay, the comprehensive growth continued delivering 48% year on year, but we also saw an acceleration of the TTL growth, both have been supported by, as we all know, by a price rebalancing, the price dynamic across products but particularly in motor over the past few quarters has been highly positive, and we expect that that will also continue for a few more quarters to ensure a proper full rebalancing of the portfolio profitability of the insurers that we are actively supporting.
Speaker #2: In motor leasing, we have seen a continued growth in both GWP and in volume, that came in spite of a few of the concerns that we did have particularly during Q1 with the regional end of Q1 beginning Q2 with the regional complexities that we have been seeing, particularly in terms of stock availability, but in spite of that, we are continuing to observe sustained growth with all our banking partners.
Speaker #2: Health is also continuing to deliver, it is continuing to deliver in healthy manner as we know health is a multifaceted product, we have retail, we have SME, we have the corporate segment, and here we are mostly talking about the health SME segment, within health SME there are there is a portion where we are most penetrated particularly in micro and small, and in the compulsory product most of the growth is continuing to come from that segment where our team is continuing to innovate in an accelerated manner, innovating on the quality of the journey, innovating on the easiness of access, with the objective of making the product more accessible for particularly for small and medium enterprises in the kingdom.
Speaker #2: We are also continuing to build the product for higher classes, we did launch a few sub-verticals during the quarter, so during next during the second half of this year you are already going to see a more results coming from those higher classes particularly, declarative and non-declarative, but I would say that overall the product development is progressing in line with expectations.
Speaker #2: In other products, I mean the numbers speak by itself, 751% growth is phenomenal, and it comes out of the ability to scale an ecosystem of services, so if I might say one element that is continuing to happen is that we are expanding the product portfolio horizontally through insurance and non-insurance products, and also vertically, vertically across the value chain, a few of those products are did start delivering scaling, and delivering material results as we are seeing today, but there is much more potential for behind this multifaceted ecosystem and portfolio that you're going to see in the coming over the coming few quarters and few years.
Speaker #2: So if you go to the next slide, let me just shed a bit more light on each of the pillars. So in motor as we come from a phenomenal two quarters, a phenomenal two quarters, three quarters, where we continue strengthening our retail proposition, people are buying more, from our channel, and we have been growing at the faster pace compared to the market, that is a testament of the quality of the solution, that is a testament of the ecosystem play where mixing and matching and personalizing products in a more precise manner, in a more tailored manner, is indeed attracting demand, attracting both high quality and price sensitive demand.
Speaker #2: So as you can see from the graph, we are continuing to contribute to the innovation of motor retail in the kingdom, we are a fair player, in the market, a fair player with insurers, we protect customers, we want to make sure that the portfolio profitability is fair for all the market participants, and at the same time we want to continue this drive towards innovation to make the product always more available, always more accessible, so that protection of people in the kingdom can continue in line with the government agenda.
Speaker #2: So definitely growth that is very conducive it is also very conducive in light of more competition that we do expect, if you remember back already at the IPO time, but almost every quarter we did mention elements around the competitive environment, I would say that there are no substantial radical changes compared to what was our vision for the past few quarters and what we have been continuing to work towards, we were expecting and we do expect the competitive environment to intensify, but at the same time we also believe that the strength our proposition is very valid, there are limited reasons for active intervention, the market is very competitive in distributed insurance distribution, is very competitive, I used to mention and I repeat it now that the HHI index, the concentration index in insurance distribution is around 700, so it's a very competitive market already, so we are quite well used to playing this in this scenario, we also believe that as the market is shifting more towards digital, which is what is happening, the entrance of more digitally savvy players might help the change of habits, particularly in selected lines, and it would also be something that we would be benefit overall as an industry and ourselves with our digital distribution business, I mean.
Speaker #2: So overall, a very positive story on the motor retail. The market share continues to strengthen. Also, the ecosystem sale is continuing to be robust. We continue to cross-sell and upsell customers in a disciplined manner, and the trend, I would say, is in line with what we have been observing in the previous quarter.
Speaker #2: So, quite a good room ahead to continue the growth in motor retail. As I was mentioning, there is still an open point on pricing. The price did increase quite substantially over the past three or four quarters, but we believe that there might still be room for an upward trend, as we have seen from a few of the recent profitability results of the insurance companies. The portfolio still has margin to rebalance. What is the right lending level is something that we cannot guide upon. Is it the 1,300, 1,400, 1,500, for example, for TTL? Probably something in that range, but again, it's too early to guide. What we do see is a scenario and a landscape where the industry will need to continue rebalancing in light of the inflation that did happen in cost, in spare parts, and more—I would say most—of the costs are underlying the claim component of the business. Ourselves, with our distribution, we will continue being as efficient and as proactive as possible with all the insurers to make sure that, as I was saying, the industry evolves with the right profitability, and at the same time, customers benefit as much as possible and continue the adoption.
Speaker #2: If you go to the next slide, the motor leasing also is continuing its growth, we know quite well the dynamic, so it is something that is progressing it is continuing and progressing in a quite conducive manner, by beginning of Q3 this year we will have almost concluded the transition of the last lessors from the software as a service to the brokerage model, there are still two potential upsides, that might come, I will not mention them again, but with two specific lessors with whom we still didn't reach the full potential, but one important element that is quite interesting to observe is the shift that we are seeing to used vehicles, the percentage of used vehicles on the total portfolio almost doubled, year on year, so there is a clear trend and migration towards the used vehicles, and for that we are developing a series of solutions in partnership with our partner banks, to make the leasing of those vehicles as attractive and as sustainable as possible for all the parties involved.
Speaker #2: When it comes to the ecosystem, we are continuing to consolidate the participation with banks, with insurance companies, and we are also expanding the value-added services. We have run several pilots, I would say, over the past couple of quarters, so we are going to continue seeing this ecosystem expansion, also on the leasing side.
Speaker #2: If you go to the next slide, in health also the story is continuing in line with expectation, we are observing a radical growth of the members, insured through Tamini, 44%, here we need to put things in perspective, we know we all know that the market is still has some underinsurance, particularly in the small and micro segment, probably something between 3 and 4 million people that shall be insured and are not completely or properly insured in the kingdom, and we expect that underinsurance with the drive and focus of the regulator will progressively be closed, we are trying to we are making our journeys as easy as possible and as convenient as possible to facilitate that transition and that adoption, so that we do envision a scenario where most of the gap will progressively be closed, and most of that will fall in the areas where our product is has the highest strength, particularly on the compulsory side.
Speaker #2: In terms of increase of premiums, we still believe that there is more room going forward. If you look at the quarter, the Q-on-Q growth, we did observe an upward trend between Q2 and Q1. But we do believe that there is more space, and there is more need also to contribute to the proper rebalancing of the profitability on the insurer side, to see this pricing dynamic shooting even higher, without jeopardizing adoption.
Speaker #2: When it comes to higher classes, as I was mentioning, you’re going to have an update during the second half. The product development is progressing. We did introduce a few of the core product components that are necessary to be able to drive adoption in higher classes in the benefit segment, and we are also cooperating more closely with a few of the insurance partners to make sure that that quality insurance is really perceived as such, and that people select also on benefit, that we bring the best inventory possible, and, in the end, that we help increase the quality of care across all our cert members.
Speaker #2: What is also happening, both in health and in motor, is that we are supporting our customers even more on the post-sale side. This is a trend that you have been seeing over the past year, since the introduction of Tamini Hero, and even before that with many of the software services throughout the value chain. But when we did launch Tamini Hero, we really started supporting customers at the claim time—we started doing it with digital solutions, at scale, and we are going to continue doing that across motor and also across health. The main objective is to contribute to the increase of the quality of service in healthcare, in private healthcare, while at the same time making sure that people can really buy what they want, as they want, with the transparency and with the convenience that will make them better adopters compared to what we are seeing today.
Speaker #2: So, if you go to the next slide, just a few more elements on the broader portfolio. As we're seeing, this portfolio by itself would require much more time to spend on. Seven hundred fifty percent growth, year on year—it's a broad range. It's a combination of strategies that are expanding the portfolio horizontally and vertically in insurance, and bringing the portfolio to add one specific sub-vertical, which is the one of financial services.
Speaker #2: Now, in horizontal expansion, we are continuing to build the build Tamini as the one-stop shop for insurance, we are becoming more sophisticated, we did deliver several products around 10 products over the past 18 months, domestic helpers contract, health, medical malpractice, marine, travel, P&S, so all the life chain, motor SME, home premium residency, civil liability, so each of them is starting to deliver in a quite few of them in a more visible manner, few of them are a bit more ready for one to two years, from now, in terms of expected adoption, but let's say that this portfolio of horizontal growth is starting to deliver as we initially designed, with the long-term strategy, we are also continuing to, as I was mentioning, to expand through the value chain, to support better customers and insurers, reducing cost, making the access to service more convenient, making also the perception of the insurance service better understood and felt as really something that can support, through the daily lives, and we are also continuing with the cross-selling activities, where we reach more than 30 products, and that is about to start to scale, probably, so we are going to, over the next few quarters, we are going to continue seeing this cross-selling activity that is already quite effective, we have been seeing a nearly doubling of the revenues from this segment, quarter over quarter, for the last two, three quarters.
Speaker #2: So you're going to continue seeing this drive going forward. And the last element is, as I was mentioning, the financial services access, with NextStream, their, I know that most of you would like to have more information, as we said, we are going to provide a much more detailed view on the financial services marketplace and play upon launch of the product in the market, that will likely happen before the end of the year, as per the expectations, if I were to update, as of now, I have to say that the product MVP is complete, the integration with the financial institutions of the banks, and the balance sheet providers, is progressing in a very accelerated manner, since we got the initial approval in October from the regulator, from some in October last year, this is progressing with a very fast pace, with banks particularly, and we are finalizing the regulatory requirements to transition to a full license that will enable us to properly launch the product, the product at scale.
Speaker #2: So behind this broad portfolio extension and portfolio innovation, that is going to continue, we have few products that are going to come out in the market in the second half of this year, there is a collaboration with the regulator, with the insurance authority, that is driving the market to continue evolving towards better protection, better quality of service, better innovation, and as a leading innovation player, in the market, we are continuing and will continue to support these healthy transformation agenda, that is brought forward by the insurance authority, and is currently, and it will continue being brought forward over the coming few quarters.
Speaker #2: So, if you go to the next slide, I will hand over to Zahir to bring us through the full overview on the finances of the quarters, and then we'll pick up the Q&A.
Speaker #1: Great. Thank you very much, Nicola. Good afternoon, everyone, and thank you for joining us. I'll take you through our financial performance for the first half of 2026, cover two technical refinements we made during the quarter, then close with a few words on how we are making and thinking about the balance of the year.
Speaker #1: On slide 12, let me start with the headline. The first half of 2026 was one of the strongest periods in the company's history. GWP reached 5.4 billion riyal, up 53% year on year.
Speaker #1: Revenue more than doubled, up 111% to 517 million riyal. And critically, we delivered that growth whilst sustaining profitability. Adjusted EBITDA rose 156% to 236 million SAR, a 46% margin.
Speaker #1: And adjusted net profit rose 158% to 216 million SAR. Importantly, this was volume-led growth across the board: motor retail up 12%, motor leasing up 20%, health up 44%.
Speaker #1: If you go to the next slide, before I walk you through the P&L, slide 13 covers two accounting refinements we made during our second-quarter review.
Speaker #1: The first is a change in how we attribute the expense of our share plan under IFRS 2, moving from a straight line to a staged, tranche-by-tranche basis.
Speaker #1: The second is a de-recognition of certain agency-related leasing receivables and payables, reflecting that we act purely as an agent on motor leasing. Two points to take away on this.
Speaker #1: The first one, on a full-year 2025 basis, is that these changes broadly offset in net income, and the impact is nil. Secondly, and more importantly, none of them impact our adjusted EBITDA, our adjusted net profit, or our cash position.
Speaker #1: These are matters of phasing and presentation. Let me address each very briefly. If you go to the next slide, this slide just illustrates the share plan change.
Speaker #1: Under the staged approach, each tranche of the award is expensed over its own shorter vesting period, which front-loads the charge relative to straight-line.
Speaker #1: But the key point is the three "sames," which are: the total cost is identical under both methods, the fair value is identical, and the vesting period is identical.
Speaker #1: Only the phasing between the period changes. And because we add back the non-cash share plan charge in arriving at our adjusted figures, this has no impact on adjusted EBITDA, adjusted net profit, or cash—none.
Speaker #1: On the next page—a lot of you have heard me say this already—the leasing receivables and payables de-recognition is validation of this. What we have done during the quarter is analyze that, because we have no legal recourse on insurance premiums in our motor leasing flow, we are removing these grossed-up agency balances from the balance sheet.
Speaker #1: The effect is equal and offsetting. Receivables and payables each reduce by SAR 372 million at the end of 2025. There is no change to the underlying economics, with one modest positive in an ECL release to equity. Net-net, it's a cleaner balance sheet that better reflects our capital-light agency model.
Speaker #1: With that out of the way, let's get to the real topic of discussion. On slide 16, if you go, revenue for the first half of SAR 517 million was up 111% year-on-year.
Speaker #1: On a quarterly review, reported revenue of 256 million SAR was marginally below 261, but if you recall, Q1 included a one-off from the fourth quarter (Q4) 2025 lease renewal effect of about 16 million SAR.
Speaker #1: Adjusting for that, underlying revenue grew 5% quarter-on-quarter, so the sequential trend is firmly upward in a quarter that is typically slower than our other quarters in the year.
Speaker #1: What I'd really draw your attention to is the breadth. This is not a one-engine story. Motor retail added 213 million SAR, up 79%. Motor leasing added 231 million SAR, up 153%.
Speaker #1: Health was at 42, up 34%. Our newer verticals were at 32 million SAR. Every single vertical contributed to the first half. Going to the next page, let me talk a little bit about gross profit margin.
Speaker #1: I want to be clear—this is a deliberate and healthy dynamic, not pressure on our margin. Our faster-growing lines, particularly the new products, carry structurally different margin profiles, and as they take a larger share of the mix, the blended gross margin normalizes modestly.
Speaker #1: Unit economics within each vertical remain strong. This is simply the arithmetic of successful diversification, and at 69% in the first half, we remain comfortable with the 70% to 72% range on a full-year basis, as mix and seasonality play through the second half.
Speaker #1: If you go to the next page, adjusted EBITDA was sequentially stable on a Q1–Q2 basis: $118 million in Q1 and $117 million in Q2, while the margin expanded from 45% to 46%.
Speaker #1: And remember, Q1 2026 carried that one-off lease renewal benefit, so on an underlying basis, the quarterly progression is firmly positive. The bridge on the lower half tells the half-year story.
Speaker #1: $196 million of pure revenue-driven uplift, offset by a little bit of gross margin effect and some increased marketing investment that will continue to do.
Speaker #1: The marketing spend, as you know, is deliberate. We are deploying this behind new product launches and customer acquisition. Even after fully absorbing that investment, operating leverage across the platform drove the margin higher.
Speaker #1: That is the scalability of the model coming through. On the next page, slide 19, which is on net profit, this is where the quality of our earnings really shows.
Speaker #1: Adjusted net profit rose 158% to $216 million. Sequentially, adjusted net profit rose 2%, from $107 million to $109 million in Q2. More than 90% of our adjusted EBITDA converted all the way through to adjusted net profit, and that speaks to the quality of the business that we have, where very little leaks out between EBITDA and the bottom line.
Speaker #1: Before I hand you back for Q&A, let me address the question that I know a lot of you are thinking about and is on your mind.
Speaker #1: A number of you have already raised this with us directly during the course of today, which is whether we intend to revise our full-year guidance given the strength of the first half.
Speaker #1: As you will appreciate, we have recently completed our full board election process and welcomed a newly constituted board. Any formal revision to the guidance is a board-level decision, and we intend to take it through the proper governance channels, rather than preempt the process here.
Speaker #1: However, what I can say is this: our prior full-year revenue guidance for 2026 was SAR 900 million to SAR 975 million. Having delivered SAR 517 million in the first half—up 111%—and with the momentum we're seeing across every vertical, we fully expect to outperform that prior range for the year.
Speaker #1: We are also aware of where the current market consensus sits, and we are comfortable with that consensus and confident the business will deliver against it.
Speaker #1: On profitability, our first-half gross margin of 69% and adjusted net adjusted EBITDA margin of 46% both remain consistent with our prior guidance ranges.
Speaker #1: And you should expect those ranges to continue to hold for the remainder of 2026. We'll formalize any update to guidance through the board in the normal course, and we'll communicate it to the market in the usual way we do.
Speaker #1: With that, let me hand it back to Kareem, who will open it up to Q&A.
Speaker #2: Thank you, Nicola, Zahir, and Zaki. We will now open the floor for Q&A. As a reminder, to ask a question, please use the raise hand function and we'll open your line in turn.
Speaker #2: You may also submit your questions in writing through the Q&A panel at any time, and we'll read them out on your behalf. With that, our first question comes from the line of Trifona Spiro.
Speaker #2: Your line is now open, sir. You may unmute yourself and ask your question.
Speaker #1: Oh, hi. Hi. Can you hear me? Hi. Thank you for the opportunity and for the presentation. Well done on the strong first half. I have three questions, if I may, please.
Speaker #1: I was wondering if you can share a little bit more on what drove the softer gross margin in Q2 versus Q1. I understand this is mix-related, but the mix hasn't materially changed between the quarters.
Speaker #1: And I was relatively stable in the past, so should we expect this to normalize as products scale up, or does this cost grow linearly with revenue?
Speaker #1: So a little bit more color, please, on the gross margin. On the auto finance side, I appreciate your comments. You made good progress. I'm more interested in how quickly can these new lines scale up once the final approvals are received, and how many partners do you expect to have on launch, and should we expect this to follow kind of the same model as the leasing transition to brokerage model similar kind of growth and scale up there?
Speaker #1: The last question—appreciate this—is probably a bit too early, but how should we think about the capital allocation decisions at year-end? You're clearly generating capital faster than you can deploy it; presumably, this will only accelerate going forward.
Speaker #1: So, in light of the management transition, I would like to understand how management's thoughts on capital allocation might have evolved, particularly over the last month or so.
Speaker #1: Thank you.
Speaker #3: Great. Let me take the first and third, and then Nicola, if you can take the one on financial services. On gross margin, it is purely a mix-driven thing.
Speaker #3: What you can see is our faster, newer business lines are growing very fast—over 700% year-on-year growth in that. That is driving some of the dilution in the gross margin.
Speaker #3: Along with that, as I mentioned in my presentation, there was this $15 million rollover into Q1 from the leasing side. Those two are the primary drivers for the margin effect.
Speaker #3: But as we look forward to the second half of the year,
Speaker #1: Of the year, we do expect it to trend back towards the 70% to 72% range that we've guided to. On the question around capital allocation, you're right.
Speaker #1: We are net cash positive as of Q2. Now we have $850 million of cash on the balance sheet. We do hope to deploy that into accretive transactions.
Speaker #1: We want to deploy it organically in some of the newer verticals where we are going into. But we also want to deploy it inorganically. In the past, we've assessed a lot of opportunities for that inorganic growth.
Speaker #1: However , valuation levels in the market were such that it didn't make financial sense for us to pursue at those valuation . Asks However , given what's currently going on in the region , what we are observing and continue to see and expect to see is a reset in those valuation levels as those valuation levels reset .
Speaker #1: We do expect to deploy some of that cash into value-accretive transactions, insofar as we don't see the right way to deploy it.
Speaker #1: We will think of how is it that we can return that to shareholders over time , but it's to be clear , it's not a decision for today .
Speaker #1: I think we're very happy with the growth that we are delivering. We're very happy with the opportunities that we see, both organically and inorganically.
Speaker #1: Nikola, if you want to answer the question on the financial services—yeah.
Speaker #2: Maybe it's a little bit early to give to give a proper guidance on those additional components . What I can say is that you shall expect similar brokerage dynamics in terms of commission driven products that are going through the , through the , through the distribution channel .
Speaker #2: And , and you are going to see them growing in an organic manner . There there won't be immediate steps up . Now you're going to to see them growing gradually over the coming over the coming quarters .
Speaker #2: We have a fantastic financial institutions team that is collaborating with with the banks to bring a broader range of products , of products to market .
Speaker #2: All of that with the idea of improving the experience of the customers of of our partners and of , of course , of enlarging , of enlarging the pie .
Speaker #2: So that is going to continue. Probably, we are going to be in a position to give a bit more guidance on the details of this, of those additional lines, towards the end of this year.
Speaker #3: Great. Our second question comes from the line of Mohammad Musa. Your line is open, sir. You may unmute yourself and ask the question.
Speaker #2: Hi . Hello . This is Mohammed from Mirza Investments . Apart from the market's repricing of motor policies , etc. , you have so many initiatives .
Speaker #2: What internal initiatives do you think will materially impact your business over the next one to two years? Okay. Thanks, Mohammad. It's okay.
Speaker #2: It's a it's a bit of a difficult question because as part of our long term strategy , we do have a portfolio approach , meaning that we are placing a set of short and long term bets and prioritizations on a broad range of initiatives that we expect will materialize a different points in time .
Speaker #2: So, there is not a single initiative that I would say will transform from what it is today into something that we're going to see in five years.
Speaker #2: There are going to be a multitude of initiatives that we, each of them will continue delivering in a consistent manner. The continued growth in retail still has a huge, quite important room.
Speaker #2: You know , just think about one single element still under in motor is still very present . So if it is a probably lending between 25 and 30 and 30% of the of the car park .
Speaker #2: So definitely it is something that will further lead additional additional growth beyond what is a natural , a natural volume volume drive Our drive and shift towards comprehensive is delivering in a , in a very consistent manner .
Speaker #2: Health . We believe , will have will have a it is demonstrated . It will have a quite important uptick . Each of the ten products that we have in the portfolio is going to be very , very important for the for the future sustainability .
Speaker #2: And we do have a few initiatives that are . I would say a bit , a little bit higher risk at the action to the to the places where we are , where we are traditionally playing around , around insurance and , but they , they can open a very large additional markets .
Speaker #2: VOS is one of them. The financial services is one of them. So we have a few of them, and you are going to see them coming.
Speaker #2: We have a view as management , of course , but we can guide you up to a certain up to a certain extent , because we cannot be certain on , on , on each of them And so you are going to see the portfolio continually growing and expanding without adding operational complexity .
Speaker #2: Okay. Because one element that is very important for us is making sure that as we grow this portfolio, we continue leveraging the scale effect that we do have across our technology portfolio.
Speaker #4: Thank you very much, Mr. [Name]. If I can ask one more additional question, and then I'll leave it to our colleagues.
Speaker #4: The the comparison of versus the competitors , without saying names How do you compare them ? Is it number of clicks ? Is it time ?
Speaker #4: Is it reliability ? Is it and how do you score against them ? That's , that's my only question . And thank you very much for your time
Speaker #2: Okay . I just mentioned one element because as I was saying , competition is something that we've been has been there for many years , is not it's not something new .
Speaker #2: There are around 15 players that operate in the electronic brokerage in the electronic brokerage space . Few of them were able to get some share .
Speaker #2: A few , very few of them . There are several aspects to that . There is the inventory that there is the . That is that is very relevant .
Speaker #2: There is the integration. There are the integration, the integration capabilities. There is the professionality and the quality of the team.
Speaker #2: Our team is uncomparable with with most . I would say not most . All the rest of the of the distributors in terms of the sophistication , ability to understand the product , ability to support the , the insurance partners ability to support the clients .
Speaker #2: So there is a broad range of , of , of components that do make the digital . Digital is a , is a , is a , is a benefit out of , of scale effect beyond everything else .
Speaker #2: No, it is, it is a, it is a sector and a, and the type of business where, to be able to lead and to remain at the edge.
Speaker #2: You need to have scale , you need to be able to continue investing . If you look at our investment level , just take it from a financial point of view , okay , because we will need to spend hours on it .
Speaker #2: But just from a financial point of view, our total investment in product development and innovation that we've been doing over the past 12 months is unmatched.
Speaker #2: No , I , again , I don't have the exact benchmark , but we would , we would it would probably be higher than all the rest of the , the , all the rest of the , of the competition combined .
Speaker #2: So again .
Speaker #4: No, Mr. Nicholas, you're 100% correct. Most likely, you're investing more than anyone else. My question was more focused on how are you measuring the experience of the customer relative to your peers, including Shori.
Speaker #2: Okay . For us , the fact that we that we are mentioning the player is one player as the others , our we monitor the experience on a daily basis .
Speaker #2: Our experience is at the top range by far . So I cannot . Of course , disclose any other component that is . That is commercial sensitive .
Speaker #2: But what I can say is that again , there is a even the fact the market reaction that there was 20 days ago , 30 days was completely irrational from a from a management point of view .
Speaker #2: And again , it's fine . It gives opportunities for the people that will . In the , in the , among the shareholding pool , that will be that did the dictate the opportunity .
Speaker #2: But it's not something that we do perceive as a differentiated as a differentiated element . Okay . So to be able to to reach the the breadth , the , the breadth of , as I was saying , combination of services we have around , we have more than 880 integrations system to system integrations with a broad range of providers .
Speaker #2: So you're not talking only about insurance. You're talking about a broad range of services that are combined in a different manner.
Speaker #2: And where we are continuing to innovate in a consistent manner. If you look at the historical evolution, even the most advanced brokers were able to build a few tenths of those integrations over the years.
Speaker #2: And of course , they are they are continuing to improve , but the the gap is not closing . So the gap is is widening .
Speaker #2: So I would say that as of now , our team is monitoring the . That that competitive landscape and the quality of service for us , they offering the best , the best quality to to the to the end users is an important is an important element of our strategy .
Speaker #2: And it will continue as we progress.
Speaker #4: Thank you so much for answering my questions, and I wish you all the best. Thank you, thank you.
Speaker #3: In the interest of time and given the number of questions in the queue, we would kindly ask each participant to limit themselves to two questions.
Speaker #3: So do we have time remaining ? We would be happy to come back to you for a second round . Our second , our second question comes from Tamer Akhtar .
Speaker #3: Your line is open. Now you can unmute yourself and ask your questions.
Speaker #5: Hello . Thank you very much for the detailed presentation . And again , I congratulations on the year to year performance of the company .
Speaker #5: I have two questions . One question is regarding . It's a follow question from my previous colleague regarding the . Show , because they got the approval to to get this integration with the Tawakalna .
Speaker #5: So does the company has any plan to go and follow the same platform , same strategy , and have you have you seen any impact on the company's business since the showed a has the access to the Tawakalna ?
Speaker #5: And my second question is regarding the one offs that the management has , the company has mentioned about the adjusted EBITDA . I know it's mainly because of fear based payments .
Speaker #5: So do we see such sort of adjustment going forward? Thank you.
Speaker #2: Okay . So yeah . So I'll take the first one then here . So the we are already active with the platform with with this government government platform that that is operating with the lead generation , with lead generation model .
Speaker #2: We onboarded the immediately after the , the platform went live mostly as a , as a , as a reaction to the , to the market , to the market dynamics , particularly on the investor side that we've been seeing our position with those channels is that we do not expect that those channels in general , that that specifically .
Speaker #2: But those channels in general, the generation channels, are able to take a substantial share. This is indeed what we are observing.
Speaker #2: So there are the production that is that is generated is a it is a it is . It is , it is it is very low compared to the to the rest of our of , of our direct directly generation .
Speaker #2: And we did on board only when we received assurance that the that the government platform would have not charged any , any cost for the , for the distribution access .
Speaker #2: So for us, it's if it is something that does support the people fundamentally, people in the Kingdom, to get an additional service through an additional channel.
Speaker #2: It is not impacting our economics . And as we're saying , the volumes are are very , very limited . Again , we decided to , to onboard .
Speaker #2: So, we are already onboarded; I would not see it there. Are there any bigger alternative generators compared to, to, to this one?
Speaker #2: So even the I understand that the focus was , was substantial because of the marketing activity that was realized because of the feeling that the government might potentially enter the enter the the distribution of insurance as of course I cannot .
Speaker #2: You will need to get your independent view in terms of regulatory , regulatory view . Our current view . What we received as , as many of you as investors did receive from from the from the authorities that there is not the willingness to to have the government operate in the in the insurance distribution .
Speaker #2: So based on that , we are building a we are continuing to build a very coherent strategy , which is to support the , the , the convenience to support the , the access , the easiness of access to ensure that this market can grow and grow as much as possible in line with the regulatory , with the regulatory agenda .
Speaker #2: At the same time that the government doesn't introduce unfair distortions in the market , in the market dynamics for which , again , many , many of you .
Speaker #2: That discuss directly and . And our cells we receive assurances that that will not come . So overall , I would say it is one of the the , the lead generation activities that are being that are being brought forward , but I mentioned again , it is receiving way too attention compared to , to the actual impact that we are observing
Speaker #4: Okay .
Speaker #1: And then maybe I can take the question on the adjustment , the impact i.e Esop you've seen in the first half , we have a total Esop cost of about 41 million SA as we go forward under the tranche basis , the cost is much more front end loaded .
Speaker #1: So you should expect lower costs for the second half of the year. As a reminder, the total cost for the year is probably going to be the same, which is what we've said previously.
Speaker #1: We had said about 1,517 million per quarter. If you think about it, 41 million has been put through in the first half. What's left is about 20.
Speaker #1: Maybe something a little bit higher than that over the second half of the year.
Speaker #5: Thank you. Thank you.
Speaker #3: Thank you. Our next question comes from the line of Ankur Agarwal. Ankur, your line is open.
Speaker #4: Yeah. Thank you for the presentation, and congratulations on a strong set of numbers. And congratulations, Nikola, on the formalization of your responsibility.
Speaker #4: Existing responsibility as well. So my first question is actually on Trezor, right? So, obviously, that's been a growth driver for a while.
Speaker #4: And there are some opportunities still that exist , right ? So I mean , Al-rajhi is probably a medium term opportunity , but can you talk a bit about where are we with Abdul Latif Jameel in terms of the fleet that you're managing ?
Speaker #4: What can be managed incrementally? What can come through in Trezor? So, that's my first question. My second question is more regarding the second half of the year.
Speaker #4: Right? So Zahir, you clearly gave us an idea that gross margins would be better. There would be lower employee stock option costs.
Speaker #4: So does it mean that it's greater buffer for you to spend on marketing as you launch more products ? Or does it actually mean that your margin guidance may actually , the upper end may also be exceeded ?
Speaker #4: How should we think about that? So, those are the two questions from my end.
Speaker #2: Okay , thanks . So on the losing side , I just a little bit cautious on on guiding on those lands because as I was saying , they are one offs .
Speaker #2: Okay. Both of them are progressing, and they are progressing well. There is a material advantage for the counterparts as well as for us and for the counterparts.
Speaker #2: So we do expect something to , to happen during the second during the second half of the , of the , of , of the year .
Speaker #2: But I cannot still guide you exactly on the , on the volumes just for us to remind us Is , is managing around 350 000 policies .
Speaker #2: If there is a bit from here, from here, but around 350,000 policies. Abdul Latif Jameel is managing around 180,000 policies.
Speaker #2: We are already active with the with the new policies that are around 140 , a bit less than one fourth of the total and the integration .
Speaker #2: The main element that delayed the activation renewals was a system integration with the new bank financing core system. That is, our current visibility is that it's getting solved.
Speaker #2: So I would say that we're quite positive for that . Probably during the during the second half of the of the year , we will be able to guide to guide more on the on the exact numbers
Speaker #4: Thank you . Nikola
Speaker #3: Thank you .
Speaker #1: Sorry . Yes , on the question on the outlook for the year in terms of margin . So look , first half we're at 46% adjusted EBITDA margin .
Speaker #1: We think that's a pretty solid place to be as we look to the second half of the year. Yeah. As everyone knows, the second half for us is a stronger half than the first half.
Speaker #1: It doesn't necessarily mean the margins are going to increase, because there's some marketing activity that is centered around the second half.
Speaker #1: If you are going into the details, the marketing costs in the second quarter were about 15% of revenue. That is lower than where we were for Q1 and where we are typically.
Speaker #1: So , and that is purely driven by certain marketing activities that we chose not to do in Q2 , but we will do an execute in Q3 and Q4 .
Speaker #1: So, you should expect marketing costs to go higher. But at the same time, we will be able to deliver attractive margins.
Speaker #1: It's not that we will now pull back on marketing to accrete the margin, right? Don't expect that.
Speaker #3: Thank you , Uncle . All . Second question comes from the line of Waruna Kumaran . Karuna . Sorry , are your line is open .
Speaker #3: You may unmute yourself and ask a question.
Speaker #6: Hello. Hi. Good afternoon. Am I audible?
Speaker #3: Yes .
Speaker #6: Hi . Thank you . Thank you very much . And and congratulations to Nikola on the the official appointment and my , my , I have two questions .
Speaker #6: The first one . Is related to the , the leasing business . Now that you know , the In terms of the base effect of the the volume growth of business , we come to like , like for like kind of a comparison in second half because of S and business came in , I think in third quarter last year .
Speaker #6: I want to know that given the the pricing increase more comprehensive motor pricing increase that we have witnessed , can we is it reasonable to expect like a kind of a similar growth trajectory in terms of total revenue generated from three leasing in the second half year over year ?
Speaker #6: That's my first question . Secondly , on on the SMB health side , you mentioned that there is like this gap of 3 to 4 million people , which you expect to be filled in the future with the mandatory insurance enforcement here .
Speaker #6: I want to know what kind of, you know, pricing policy you are seeing in terms of the mandatory policy that we use?
Speaker #6: You're saying you are very strong and you have very strong proposition there . What I mean , if you can give me a give a ballpark figure , what kind of premium premium per member that you're looking at ?
Speaker #6: Thank you .
Speaker #2: Okay . Thanks Just two points on price when it comes to delivering price , you should probably expect something stronger than the previous year in terms of overall GWP , because prices did increase already , there is the possibility of seeing a further further further reason as not all the lines follow the the same hardening cycle .
Speaker #2: Few of them did . Hardened more compared to others . So in we see further , further hardening in the second and the second half of the year .
Speaker #2: When it comes to the SME health , the price increase , the . Around 10% quarter of quarter on quarter after a Q1 where a price was quite , quite low and quite weak , we have seen a revert of the dynamic in Q2 , and we shall probably expect also , given the recent the recent results that were released by by a few of the insurers , that this hardening cycle will probably will probably amplify .
Speaker #2: So if we were to model , probably I would I would continue modeling the hardening price in our baseline models . We do not embed a additional pricing changes to those to those lines , but again , it would be your judgment , of course , in in a in the modeling .
Speaker #6: Okay . Thank you , Nicola and in terms of the dollar value of this mandatory compulsory product , how , how , how what , what kind of , you know , range are we talking about ?
Speaker #6: Ball park per year .
Speaker #2: I'm not sure if we discussed this closet. There, the pricing.
Speaker #1: I mean , if your question is what kind of policy price it really depends on where these uninsured people land , what we can tell you for a lower class basic product , the price is typically , I don't know , 3 to 500 rial something in that territory .
Speaker #6: Okay, perfect. Thank you very much, gentlemen, and I wish you all the best.
Speaker #2: Thank you .
Speaker #3: Thank you. Our second question comes from the line of Raja Ahadi. Raja, you may unmute yourself and ask the question. Please.
Speaker #7: Hello . Good afternoon gentlemen . Thank you very much for this very insightful presentation . And congratulations , Nikola , for new new role .
Speaker #7: Wishing you all the best. My first question is on Amini Motor and the comprehensive GWP mix. Could you give us a sense of the percentage of GWP so far, or either one H versus one, or year to date?
Speaker #7: The improvement you've seen, if any? My sense is probably as the TPL pricing has gone up substantially, and so did comprehensive.
Speaker #7: Actually , the conversion could be a little bit discouraged , given where the rates are in the market . And my second question is on is a follow up to the marketing spending question .
Speaker #7: I want to get a sense if you're planning a sizable institutional branding campaign towards the end of the year, similar to what you've done in Q4 of 2025.
Speaker #7: And perhaps if you could just give us a sense of why the discussions with the bank are taking so long, and maybe just a hint of the direction of the conversation there.
Speaker #7: Thank you
Speaker #2: So just let me pick up, pick up a few, and then jump in when needed. So let's first talk about the dynamic on the motor.
Speaker #2: On the comprehensive motor . GW is is indeed a related to what you were mentioning , prices . We are still observing and we have been observing a very healthy growth of comprehensive .
Speaker #2: Almost 50% growth in the WP in the comprehensive GWP over the over the over Q2 , if prices will continue to harden , it is realistic to expect a slowdown in conversion .
Speaker #2: So, elasticity in the insurance market in general is quite high in terms of resilience and elasticity. However, the elasticity in the motor insurance market in the Kingdom has demonstrated to be lower compared to what we were expecting.
Speaker #2: That means that with the price increase still , the conversion held . Okay . So it didn't . It didn't drop as much as we as we initially modeled , but of course , there is a dynamic in line with what you are , what you are describing .
Speaker #2: So you will need we will need to observe . And if prices do remain at the level where we are , we are seeing now or slightly higher , probably you should expect the same conversion ratio if prices were to materially increase , we would expect decline in the in the conversion , in the conversion to .
Speaker #2: In terms of marketing spend , the marketing has a multiple campaigns that are coming through the year . Last year we had a bit of a discontinuity at the end .
Speaker #2: The end . This year we've been a little bit more progressive . We did it in . At the beginning . We are doing it as we as we speak .
Speaker #2: I cannot exactly comment because it's commercially sensitive on what we are going to do in the in the second half , in the second half of the year .
Speaker #2: But I would expect the usual expect not to a substantial discontinuities , but it is a bit fluctuating Based on the commercial opportunities that we see based on the need of strengthening the brand , we can envelope that will continue evolving .
Speaker #2: If you . If you take the envelope in percentage of revenues , it will continue evolving in a consistent manner . After what you've been will be observing in the in the past
Speaker #7: Very helpful, Nikola. And just perhaps on Bank, if you can just give us a sense of why the conversation is taking so long, and any direction there.
Speaker #7: Thank you
Speaker #2: Yeah . On this element , I cannot I cannot guide , as I was saying , there are sensitivities . What I can say is that the discussion is progressing and we will be able to give you an update before the end of the year .
Speaker #2: As we said . So , before the end of the year , we should be able to have a view on whether we will continue with the model that we that we currently have in place , or whether we will transform to something , to something different .
Speaker #2: The teams are collaborating very well across a broad range of a broad range of of dimensions , not only the , the pure , pure distribution of retail , of retail , motor leasing , but it is too early for me to provide guidance
Speaker #7: Super helpful. Thank you, Nikola and Zahir.
Speaker #2: Thank you. Thank you.
Speaker #3: Thank you very much. The second question comes from the Q&A panel. Sameer Aslam is asking, what has been the volume of business generated through the government portal?
Speaker #2: I think we already answer to this one . So it's a okay , so I will jump to the next one and then I think we are quite .
Speaker #2: We are quite late with the closing, so maybe I will take another one.
Speaker #3: Sure. The second question we have comes from the line of Naveed Ahmad. Naveed, your line is open. Please unmute yourself.
Speaker #8: Hello . Good evening , and thank you for taking my question . I just have one question , which is related to the motor retail segment .
Speaker #8: As you have outlined in the past in terms of value added services and cross-selling , and you've echoed that today as well . Can you kindly give us an idea in terms of when how many of in terms of percentages , how much of new clients or clients who are renewing their insurance actually get an additional service or an additional value added service ?
Speaker #8: And what are the top one or two value-added services that you know individual customers get the most?
Speaker #2: We do not provide the breakdown . So we're we're not going to be able to provide the details . The it is a material percentage .
Speaker #2: So it is not a 1% . It is not even 50% somewhere , somewhere in between . It is something that is also has also been growing quarter over quarter .
Speaker #2: The moment it will become material enough and not commercially sensitive enough to disclose , we will probably create a dedicated , dedicated focus , but I don't see that happening during the next couple of quarters .
Speaker #8: Sure. And in terms of, like, what are the top one or two value-added services that are most purchased?
Speaker #2: Among the 30 that we have ? There are more motor related components that deal with services that you have with the mobility , with the mobility ecosystem for your vehicle , for driving .
Speaker #8: Okay. Thank you so much.
Speaker #9: Thank you .
Speaker #3: Thank you
Speaker #2: So I would like to to thank you and maybe before , before closing , I would also like to thank the , the , as there was mentioning , we , we had a recent recently board , a board about change with a fantastic board members that that joined us and that will that will contribute will help .
Speaker #2: We support management in delivering over the coming over the coming term . But I would also I wanted also to take some time to thank the board for the support that was provided in a very consistent manner .
Speaker #2: Since 2016 1721 . So it was a very extended journey through throughout throughout which the board collaborated with management in a in a very positive manner , as you have been observing with this board and the founder and took the the board , the board chairman , the board chairman , position , and a half of the board still confirms the .
Speaker #2: The full continuity with the with the agenda and the support that we've been seeing , that we've been seeing over the previous term at the same time , we do believe that there are very valuable additions in terms of individuals that will help us contributing in making Rosanna an always more successful and growing high growth and , and consistent business over the coming over the coming .
Speaker #2: So I would like to thank , of course , the the entire , the entire outgoing board and welcome the , the new board for , for what will come next .
Speaker #2: So thanks a lot for for the time for the questions . We are always available in case there are other other components . See you also
Speaker #3: Thank you, gentlemen, for your time. Thank you. With that, we conclude the call for today.
Speaker #2: Thank you .
