Saudi Fintech, Cloud Services Drive Technology Sector Profit Boom

Saudi Arabia’s listed applications and technology services companies reported a 16% year‑on‑year rise in combined net profits in the first quarter of 2026, reaching SAR1.07 billion ($285 million) compared with SAR920 million ($245 million) a year earlier, driven by growth in fintech, cloud services and tighter cost controls. The five‑company sector — Elm Co., Solutions by stc, 2P Perfect Presentation, Al Moammar Information Systems Co. and Bahr Al Arab Systems Information Technology — saw four firms post profits while Bahr Al Arab continued to record losses. Elm alone accounted for roughly 61% of total sector profits, reporting the highest net income at SAR656 million, up 32% from SAR495 million.

"The strong earnings growth reflects the intersection of several operational and strategic factors centered on five main pillars," said financial analyst Nasser Al‑Rashid, summing up the mix of public‑sector contracts, fintech demand, cost discipline, cloud expansion and revenue diversification behind the results.

Context and company results

The sector’s performance underlines a structural shift toward recurring digital revenue. Elm reported a 31% rise in revenue to SAR2.47 billion in Q1, benefiting from a lower research and development expense base. Solutions by stc ranked second with SAR370 million in profits, up 2.5% from SAR361 million, supported by a 6.3% revenue increase to SAR3 billion and lower operating and selling expenses. 2P Perfect Presentation posted SAR33.06 million in net income, a 2.4% increase from SAR32.28 million, with revenue up 14% to SAR330.08 million driven by strong call‑centre services.

• Combined sector net profit: SAR1.07 billion ($285 million) in Q1 2026, up 16% year‑on‑year.
• Elm Co.: net income SAR656 million (up 32%); revenue SAR2.47 billion (up 31%).
• Solutions by stc: profits SAR370 million (up 2.5%); revenue SAR3 billion (up 6.3%).
• 2P Perfect Presentation: net income SAR33.06 million (up 2.4%); revenue SAR330.08 million (up 14%).
• Bahr Al Arab Systems Information Technology: continued quarterly losses.

Analysts attribute the results to five key drivers identified by Al‑Rashid: sustained public and private digital transformation spending; rapid fintech development boosting digital payments and identity tools; improved operational efficiency and lower administrative costs; expansion of cloud computing and data‑centre services; and diversification of revenue streams across managed services, platforms and systems integration. The article also highlights SDAIA’s "Hexagon" data centre as the largest government data centre in the world — a sign of deepening national infrastructure investment.

Outlook

Market analyst Tariq Al‑Ateeq said Elm’s contribution of more than 60% of sector profits underscores "the strength of its innovation‑driven model" and that the Saudi technology sector has entered a phase of "sustainable operational growth." He expects continued solid earnings and revenue growth in coming quarters, though at a more balanced pace than recent years, with long‑term expansion driven by Vision 2030 digital programmes, rising cloud and AI services and increased private‑sector automation spend. Analysts also noted strong corporate demand should help push the Kingdom’s information and communications technology market toward what they expect will exceed $100 billion in spending by 2031.