Double-digit revenue growth in 3Q25
Solutions by STC’s revenue climbed by 13% YoY in 3Q25. The IT Managed & Operational Services segment recorded the highest growth (+35.4% YoY), followed by the Core ICT Services (+7.4% YoY), which offset a 12.9% YoY decline in Digital Services segment.
Net profit declines as costs outweigh revenue growth in 3Q25
The COGS increased by SAR 367mn, overshadowing the SAR 345mn increase in revenue. Furthermore, the operating expenses rose by SAR 0.5mn and zakat & tax charge increased by SAR 70mn due to the reversal of zakat provision related to prior periods. Collectively, this led to a 10% YoY decrease in net profit during 3Q25.
U Capital View
We maintain our SAR 281.5/share price target and an Accumulate rating on Solutions, awaiting the availability of detailed financials. Currently, the stock is trading at 15.9x on our FY26e EPS, below its 3-year daily average 12m forward P/E of 23.1x.