Executive Summary
Naseej for Technology Co reported QQ2 2024 revenue of SAR 51.78 million, a 43% year-over-year decline and flat QoQ relative to QQ1 2024. The quarter delivered a positive EBITDA of SAR 1.52 million and operating income of SAR 1.14 million, but the company posted a net loss of SAR 0.48 million, yielding a negative net margin of -0.93% and an EPS of -0.10. The revenue mix and margins imply ongoing challenges in translate top-line activity into sustained profitability, even as the business maintains a solid liquidity position. The standout features in QQ2 2024 include a meaningful gross profit of SAR 10.94 million (gross margin 21.1%) and a high working-capital footprint that generated limited free cash flow, with negative free cash flow of SAR -3.64 million and net cash provided by operating activities of SAR 0.36 million after a sizable working-capital adjustment. The balance sheet remains cash-generative at a headline level (SAR 13.77 million cash and equivalents) but relies on deferred revenue (~SAR 37.65 million) and customer receivables to sustain activity, underscoring a conservative near-term liquidity profile despite a healthy current ratio (~2.24x). The QQ2 performance trails several technology services peers on profitability, though the company exhibits resilience in liquidity and a modest EBITDA buffer that could serve as a foundation for a turnaround if top-line growth resumes and working-capital efficiency improves.
Key Performance Indicators
QoQ: 0.00% | YoY:-123.11%
QoQ: 0.00% | YoY:-122.98%
Key Insights
Revenue: SAR 51.78 million in QQ2 2024, YoY -43.02%, QoQ 0.00%. Gross Profit: SAR 10.94 million, Gross Margin 21.14%, YoY -52.22%, QoQ 0.00%. EBITDA: SAR 1.52 million, EBITDA Margin 2.93%. Operating Income: SAR 1.14 million, Operating Margin 2.20%, YoY -57.12%, QoQ 0.00%. Net Income: SAR -0.48 million, Net Margin -0.93%, YoY -123.11%, EPS -0.10, YoY -122.98%. Liquidity/Cash Flow: Cash and cash equivalents SAR 13.77 million; Net cash provided by operating activities SAR 0.36 million; Operating ca...
Financial Highlights
Revenue: SAR 51.78 million in QQ2 2024, YoY -43.02%, QoQ 0.00%. Gross Profit: SAR 10.94 million, Gross Margin 21.14%, YoY -52.22%, QoQ 0.00%. EBITDA: SAR 1.52 million, EBITDA Margin 2.93%. Operating Income: SAR 1.14 million, Operating Margin 2.20%, YoY -57.12%, QoQ 0.00%. Net Income: SAR -0.48 million, Net Margin -0.93%, YoY -123.11%, EPS -0.10, YoY -122.98%. Liquidity/Cash Flow: Cash and cash equivalents SAR 13.77 million; Net cash provided by operating activities SAR 0.36 million; Operating cash flow SAR -3.55 million; Free cash flow SAR -3.64 million. Balance Sheet: Total assets SAR 257.98 million; Total liabilities SAR 130.67 million; Total equity SAR 126.64 million; Cash cycle metrics show DSO ~294 days, CCC ~336 days; Current ratio 2.24x, Quick ratio 1.84x. Leverage: Total debt SAR 23.43 million; Debt/Equity ~0.19x; Cash flow/debt ratio negative given FCF context.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
51.78M |
-43.02% |
0.00% |
| Gross Profit |
10.94M |
-52.22% |
0.00% |
| Operating Income |
1.14M |
-57.12% |
0.00% |
| Net Income |
-482.47K |
-123.11% |
0.00% |
| EPS |
-0.10 |
-122.98% |
0.00% |
Key Financial Ratios
operatingProfitMargin
2.2%
operatingCashFlowPerShare
$-0.71
freeCashFlowPerShare
$-0.73
priceEarningsRatio
-142.5
Management Commentary
Transcript not available for QQ2 2024. Management commentary and quotes could not be extracted from the provided data set. If a transcript becomes available, a themes-based synthesis (strategy, operations, market conditions) with direct quotes will be added.
Transcript not available for QQ2 2024.
— N/A
No management quotes were disclosed in the provided document.
— N/A
Forward Guidance
Management did not publish explicit QQ3/Full-Year 2024 targets within the provided data. Given the revenue decline versus prior year and the constrained net income, the forward path hinges on (1) revenue diversification and growth, (2) improved working-capital efficiency to convert EBITDA into free cash flow, and (3) sustained cost discipline to protect margins. In a qualitative scenario, the company could target modest top-line stabilization in H2 2024 with improved collections and controlled operating expenses to move toward breakeven on a net income basis. Key factors to monitor include backlog development, deferred revenue realization, receivables upgrading, and any government or enterprise deals that could unlock higher margin services. Economic and sector tailwinds in Saudi Arabia’s digital transformation agenda may support longer-term upside if Naseej can convert backlog and deferred revenue into recurring revenue streams and monetize its knowledge-management and e-learning platforms more efficiently.