Executive Summary
Edarat Communication and Information Technology Co (9557.SR) reported a solid first quarter to start 2025, delivering profitability amid a notable sequential revenue drop. Revenue for QQ1 2025 was SAR 37,576,338, down 36.25% QoQ and down 6.91% YoY, reflecting project phasing and seasonality typical of IT services cycles in the region. Despite the revenue headwinds, the company generated EBITDA of SAR 9,516,653 and net income of SAR 7,621,500, yielding an EBITDA margin of 25.3% and a net margin of 20.3%. Gross profit stood at SAR 13,958,620 with a solid gross margin of 37.15%, underscoring ongoing operating leverage within the services mix. EPS was SAR 1.51 for the quarter, supported by disciplined cost management (SG&A SAR 5,360,676 and other operating expenses limited). The quarter’s profitability suggests Edarat’s service portfolio—anchored in advisory, data center engineering, cloud services, and smart infrastructure—can translate volume into margin as project execution cadence normalizes. However, the lack of balance sheet and cash flow data for QQ1 2025 constrains a full assessment of liquidity and leverage. The results should be evaluated in the context of a rapidly evolving GCC IT services market under Vision 2030, where digital transformation initiatives and cloud migration continue to drive long-term demand. The following analysis integrates the disclosed metrics with a qualitative read from the available quarterly data to form a coherent investment view ahead of potential cadence in the pipeline and contract wins.
Key Performance Indicators
QoQ: -36.25% | YoY:-6.91%
QoQ: -42.79% | YoY:-21.91%
QoQ: -42.02% | YoY:-13.98%
QoQ: -41.73% | YoY:-16.27%
QoQ: -70.91% | YoY:-58.17%
Key Insights
Revenue: SAR 37,576,338; YoY -6.91%, QoQ -36.25%; Gross Profit: SAR 13,958,620; Gross Margin: 37.15%; EBITDA: SAR 9,516,653; EBITDA Margin: 25.32%; Operating Income: SAR 8,597,244; Operating Margin: 22.88%; Net Income: SAR 7,621,500; Net Margin: 20.28%; EPS: SAR 1.51; Net Income Margin vs. Revenue: 20.28%; Tax Rate (on pre-tax): approx. 10.3% (872,295 tax on 8,493,795 pre-tax); Balance sheet and cash flow data not provided for QQ1 2025; four-quarter revenue showed notable quarter-to-quarter vola...
Financial Highlights
Revenue: SAR 37,576,338; YoY -6.91%, QoQ -36.25%; Gross Profit: SAR 13,958,620; Gross Margin: 37.15%; EBITDA: SAR 9,516,653; EBITDA Margin: 25.32%; Operating Income: SAR 8,597,244; Operating Margin: 22.88%; Net Income: SAR 7,621,500; Net Margin: 20.28%; EPS: SAR 1.51; Net Income Margin vs. Revenue: 20.28%; Tax Rate (on pre-tax): approx. 10.3% (872,295 tax on 8,493,795 pre-tax); Balance sheet and cash flow data not provided for QQ1 2025; four-quarter revenue showed notable quarter-to-quarter volatility suggesting project timing is a key driver of quarterly results; Overall profitability metrics indicate strong operating discipline relative to revenue base.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
37.58M |
-6.91% |
-36.25% |
| Gross Profit |
13.96M |
-21.91% |
-42.79% |
| Operating Income |
8.60M |
-13.98% |
-42.02% |
| Net Income |
7.62M |
-16.27% |
-41.73% |
| EPS |
1.51 |
-58.17% |
-70.91% |
Management Commentary
Transcript data not provided in the source document. As a result, management commentary and quotes from the earnings call are unavailable for inclusion. The analysis therefore focuses on disclosed quarterly financials and publicly observable quarterly trends to infer strategic posture and operational priorities.
Transcript not provided.
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Forward Guidance
No formal forward guidance was provided in the supplied data. Given Edarat’s exposure to government and enterprise IT services, near-term execution risk likely centers on project ramp-ups, contract wins, and the timing of cloud/data center migrations. Investors should monitor: (1) pipeline progression and deal size, (2) backlog and contract coverage, (3) deliberate cost management and operating leverage, and (4) any progressive disclosures on debt, cash flow, and liquidity once balance sheet data are available. In the medium term, growth potential may arise from expanded cloud migration work, data center optimization, and smart city initiatives consistent with Saudi digital transformation efforts.