Naqawa Information Technology Company, listed on the Nomu Parallel Market, announced an exceptional leap in its financial performance during the first half of the 2025-2026 fiscal year, with net profits surging 102% to reach SAR 4.65 million. This significant growth, compared to a net profit of SAR 2.3 million during the same period of the previous year, reflects the strength of the company's strategy and its ability to capitalize on available market opportunities.
Financial performance details and key growth drivers
According to the official statement published by the company on the Saudi Stock Exchange (Tadawul) website, this strong profit growth is attributed to a range of positive operational and financial factors. The primary driver was a SAR 2 million increase in gross profit, mainly resulting from a nearly 20% rise in revenue to SAR 68.36 million, compared to SAR 56.98 million in the same period last year. This was accompanied by an improvement in the gross profit margin, which rose from 13.04% to 13.80%.
In addition to revenue growth, several other factors contributed to boosting net profit, namely:
- Reduced provision for credit losses: The company succeeded in reducing the provision for expected credit losses by SAR 272,624, which indicates an improvement in the quality of collection and credit risk management.
- Financing costs decreased: Financing costs decreased by SAR 502,526, reflecting an improved company financing structure or a lower cost of borrowing.
- Other revenues: The company recorded other revenues of SAR 43,544 during the period.
Conversely, part of this growth was partially offset by an increase in general and administrative expenses of SAR 160,589, and an increase in the zakat provision of SAR 311,776 compared to the same period of the previous year.
“Naqawa” at the heart of Saudi Arabia’s digital transformation
These results cannot be viewed in isolation from the broader economic context in Saudi Arabia. Naqawa operates in the information technology sector, a pivotal sector driving the economic transformation under Saudi Vision 2030. The Vision aims to build an advanced digital economy and diversify income sources away from oil, resulting in a massive increase in both government and private sector spending on digital transformation projects, technological infrastructure, cybersecurity, and cloud solutions.
This supportive investment climate provides fertile ground for companies like “Naqawa” to expand their operations and win new contracts, as demand for their specialized services increases from various sectors seeking to modernize their systems and improve their operational efficiency.
Importance and future impact
This strong financial performance is particularly significant as it reinforces investor confidence in the company's performance and its stock on the Nomu Parallel Market, which aims to support promising small and medium-sized enterprises (SMEs). This outstanding performance also positions Naqawa more competitively for securing larger projects in the future and supports its expansion plans, whether in developing new services or entering regional markets. The company's success is a positive indicator of the maturity of the Saudi technology sector and its ability to achieve sustainable growth, thus contributing to the realization of comprehensive national development goals.
