Systems Limited (SYS) reported earnings per share of PKR 7.53 for CY25, compared to earnings per share of PKR 5.12 in CY24. Furthermore, in 2QCY26, the company reported earnings per share of PKR 2.05, compared to earnings per share of PKR 1.81 in the same period last year (SPLY).
A breakdown of geographical performance shows the Middle East contributing more than 50%, while Asia Pacific benefited from a one off high margin project. In Pakistan, gross profit margins improved to approximately 17%. Confiz contributed approximately 25%–30% of the overall growth, with the remaining growth driven by core Systems operations.
Because Confiz’s clients are large, enterprise scale accounts, they offer substantial and immediate opportunities to cross sell complex data engineering, cloud, and AI transformation services. Strategic alignments, structural integrations, and team synchronization were largely completed during the first half of the year. The second half is focused on execution, and management expects significant growth and revenue uplift in 2027.
UAE government Vision on AI represents a sizeable opportunity, as every public sector entity in the UAE has been mandated to implement agentic workflows and integrate autonomous AI agents across departments. Systems is receiving a significant volume of inbound requests from existing public sector clients to build and deploy specialized agentic use cases. The decline in other income is attributable to two primary factors. First, unlike previous periods in which the company recorded exchange gains, H1 registered an exchange loss due to rupee appreciation.
Second, under standalone accounts, Systems collected outstanding receivables from its subsidiaries. As these intercompany balances declined, the markup income charged on those balances also decreased. In telecom, the current pressure is considered temporary and is expected to normalize in the second half of the year. It was driven by minor project timeline slippages during the first two months, combined with a higher domestic component in the telecom mix. Domestic projects typically carry significantly lower margins than Middle East telecom contracts. Synergies are expected to support margins, although a significant financial contribution is not anticipated immediately in H2. Systems is currently focused on rebranding and restrategizing the portfolio for existing clients, laying the foundation this year for scalable momentum next year.
The US market represents an attractive growth opportunity, where typical enterprise client ticket sizes can exceed USD 100mn. Systems has no intention of setting up or owning physical data centers. However, the company remains highly active in partnering and aligning with existing data center operators to deploy AI and specialized enterprise solutions. Customer contracts are typically structured on a 1–3 year basis, with some extending up to five years. Systems does not conduct quarterly pricing revisions.
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