Systems Limited (SYS) reported Consolidated earnings per share of PKR 7.45 for CY25, compared to PKR 5.08 in CY24. Furthermore, in 4QCY25, the company reported earnings per share of PKR 2.08, compared to earnings per share of PKR 1.37 in the same period last year (SPLY).
Approximately 91% of revenue is denominated in foreign currency (primarily USD, along with Euro and GBP), while 7% remains in PKR. Banking and Financial Services (remains the leading vertical at 30% followed by Telco at 25%. Pakistan continues to be the primary delivery hub, accounting for 82% of resources, followed by the UAE at 12%, with a growing presence in Egypt. Management prioritises free cash flow over absolute profit to ensure the ability to fund dividends and acquisitions organically without reliance on debt. A key strategic objective is to increase the revenue share from North America and Europe to build resilience against geopolitical headwinds in the Middle East.
The company is aggressively pursuing an inorganic growth strategy. Management views the current global crisis situation as an opportune time to acquire distressed yet high quality companies at attractive valuations. Demand remains exceptionally strong, with no RFPs (Requests for Proposals) cancelled or delayed. In fact, management reported an upsurge in demand over the last 45 days.
The UAE business remains at a status quo, with ongoing projects continuing as planned, while Qatar continues to represent a smaller portion of the overall business. The acquisition of Confiz is viewed as a foundational step for expanding into the North American market. While consolidation began in January, it is expected to take two to three quarters to fully align cultures and operational structures. The business with BAT is fixed and stable, providing consistent volumetric growth that remains largely unaffected by regional volatility.
Low end, routine tasks such as basic help desk services or simple application development are likely to be displaced by AI agents. At the same time, AI is driving significant demand for data readiness approximately 57% of companies believe their data is not yet prepared for AI, creating opportunities in data engineering, infrastructure, and security.
Regarding the Saudi Arabian market, management reported very strong demand, noting an upsurge over the last 45 days. Management does not anticipate a slowdown in Vision 2030 related projects and suggested that the current geopolitical environment may act as a pivot, redirecting investments from non-productive initiatives toward more impactful areas such as AI technology stacks and service digitization. In a notable shift, management is now bullish on the domestic market and is planning to double down on Pakistan, with a focus on large enterprise clients while avoiding small scale or public sector engagements.
Important Disclosures
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