Edarat boasts SAR 200M backlog, demand likely to keep growing: CEO

Erick Baduy, CEO of Edarat Communication and Information Technology Co.

Edarat Communication and Information Technology Co.’s total backlog stand at nearly SAR 200 million for 2025 and 2026, CEO Erick Baduy told Argaam in a phone call.

He explained that the contract backlog is related to services launched at the end of 2024. However, it reflected a limited impact over the past year for being in the preparation stage.

Baduy expected the relevant impact of these contracts to materialize on revenues this year, especially in the fields of hosting infrastructure and the provision of artificial intelligence (AI) solutions to customers.

Edarat, according to the top executive, is currently focusing on attracting international players seeking to tap the Saudi market, particularly in the data centers sector.

In addition, the Saudi-listed company targets the financial and government sectors that are in need of advanced digital infrastructure.

On Edarat’s H2 2024 financials, he noted that the six-month profit matched forecasts, driven by the expansion plan being undertaken over the past two years. The company focused on adding new services in the cloud computing segment, which contributed to achieving the expected growth.

The CEO explained that business divisions that contributed the most to the company’s recent revenue growth are data centers and cloud computing. Revenues of the cloud computing segment had the largest impact on the overall top line, rising by 61%.

Additionally, the expansion plans and targets of the Saudi Vision 2030 have strengthened the company's market opportunities and helped expand its customer base, he highlighted.

Demand for data centers is projected to remain on the rise in 2025, thanks to the ongoing expansions and increasing demand for these services. This is besides the introduction of new services within these centers, not to mention the direct impact of AI on revenues of the company’s cloud services.

As for the board’s capital hike decision, Baduy said the planned move is part of the company's five-year expansion plan. It is bound to pave the way for the rollout of new services, especially in the cloud computing segment, which will in turn enhance the company's overall growth.

He pointed out that Edarat has launched new services to manage some data centers in Saudi Arabia. Last year, it signed a contract with Al Moammar Information Systems Co. (MIS) to manage data centers at more than SAR 100 million, which is seen to reflect positively on the company's 2025 financial results.

On the plan to transition to the Main Market (TASI), he indicated that the board would submit a recommendation in this regard. A financial advisor was hired to assess the related gaps and handle prerequisites to ensure the readiness of the transition file.

He explained that an official date for the market transition has not been determined yet, noting that the goal is to achieve sustainable growth that enables Edarat to join TASI soon.

Baduy expected the company's financial results to maintain its growth trajectory during the first half of 2025, and to achieve higher growth rates.

However, this depends on the speed of customers' decision-making for investment in their projects. The CEO is bullish on achieving annual growth of up to 40%.

According to data available on Argaam, Edarat’s bottom line climbed to SAR 24.7 million in 2024, from SAR 17.3 million a year earlier. Its H2 2024 earnings grew 44% year-on-year (YoY) to SAR 13.1 million.