Saudi technology revenue nears 13 billion riyals as rising investment in data centres and artificial intelligence reshapes the market

Financial results for companies listed in the software and technology services sector on the Saudi Stock Exchange during the first half of 2026 revealed a broad structural shift, as firms moved beyond traditional digital transformation spending toward a new wave of heavy investment in artificial intelligence infrastructure and data centres. Combined sector revenue reached 12.99 billion Saudi riyals (around 3.46 billion dollars), recording 14.7 percent annual growth, while aggregate net profit rose by 4.73 percent to 2.14 billion Saudi riyals.

This performance reflects clear divergence in growth models among the sector's listed companies, five of which posted net profits in the first half. Solutions led sector revenues with roughly 6.24 billion riyals, up 9 percent, and a net profit of 824 million riyals, supported by a 19.6 percent expansion in core ICT services. Elm ranked second with revenues of 4.99 billion riyals, up 21.1 percent, and profits exceeding 1.17 billion riyals, driven by a 22.31 percent rise in its digital business revenue alongside an expansion strategy that included the full acquisition of Thiqa Business Services for 3.4 billion riyals in April 2025, aiming to generate roughly 20 percent of its income through acquisitions over the next five years.

Expanding into AI infrastructure accelerates revenue growth, but it puts profit margins through a rigorous operational and financial test.This challenge is evident in the results of Al Moammar Information Systems (MIS), which ranked third with a 28.2 percent jump in revenue to 910 million riyals, even as its net profit fell by 15.85 percent to 55.6 million riyals. This divergence, alongside a 4.77 percent decline in the sector's combined second-quarter profit despite 15.98 percent revenue growth, points to cost pressures tied to delivering major contracts, working capital demands, and financing costs. Meanwhile, Perfect Presentation (2P) posted profit growth, and Arab Sea Information Systems returned to profitability in the second quarter despite posting a modest half-year loss.

This growth rests on three primary drivers underpinning the digital economy, where the ICT sector reached roughly 199 billion riyals by the end of 2025 with an 8 percent compound annual growth rate, according to data from the Communications, Space and Technology Commission (CST). The first driver is sustained government and enterprise spending on digital transformation, managed services, cloud computing, and cybersecurity. The second is the wider adoption of digital platforms and recurring revenue models. The third and most influential driver shaping the market is the shift from purchasing software to direct investment in compute capacity, processing, hosting, and dedicated data centres to run artificial intelligence workloads.

The real test for companies is no longer simply winning large contracts, but protecting margins and converting revenue into sustainable cash flow.This shift imposes a new operating reality on technology officers and business leaders across the Gulf and the wider region. Moving toward local computing infrastructure and domestic data centres provides nearby processing and hosting capacity that meets data sovereignty requirements and lowers latency. In turn, it confronts solution providers with the challenges of managing hardware costs, retaining specialised technical talent, and controlling operational expenditure to ensure returns are not eroded by rapid capital expenditure.

These figures point to a maturing regional business environment, where artificial intelligence has moved from exploratory pilots to a core infrastructure driver reshaping partnerships and spurring further mergers and acquisitions. As spending momentum carries into the second half of the year, the divide will widen between companies that merely grow top-line revenue and those that convert that expansion into durable business value.